Global producer of glass packaging for food and beverages Verallia has reported a 'substantial increase in revenue', to €750 million, in the first quarter of its financial year.
It marks an increase of 23.9% at constant exchange rates and scope compared to the same period in 2021, the company noted.
Verallia Q1 Performance
Michel Giannuzzi, chairman and CEO of Verallia, said, "Verallia posted a very strong sales increase as a result of a highly dynamic glass market and price increases offsetting some of the cost inflation.
"In the current geopolitical context leading to unprecedented energy inflation and a negative inflation spread, the group increased its EBITDA thanks to the operational leverage from the increase in volumes and its Performance Action Plan. Despite the current uncertainty, Verallia can rely on its agility and resilience and therefore reaffirms its 2022 objectives."
Verallia credited its performance to dynamic sales volumes over the quarter, which increased by almost 10%, with selling price increases of over 10%, offsetting some of the significant inflation in production costs.
In addition, the product mix remained positive for the quarter, the company noted.
Adjusted EBITDA increased to €183 million during the quarter, while adjusted EBITDA margin declined marginally to 24.4%.
Regional Breakdown Of Results
In Southern and Western Europe, sales volumes grew by more than 10%, with an increase across all countries.
Sales prices increased significantly over the quarter, offsetting some of the high inflation, Verallia noted.
The Northern and Eastern Europe region reported approximately 10% growth in sales volumes.
When the conflict in Ukraine began at the end of February, the group halted production at its local plant while keeping its two furnaces functional. The company has since resumed production in one of the furnaces at the request of local customers and teams to produce food jars.
The other has been turned off, emptied, and cooled down in order to keep it in good condition, the company added.
In Latin America, sales volumes in Brazil and Chile saw strong growth, while in Argentina, production was limited due to a furnace repair.
2022 Outlook
The packaging giant expects a sharp growth in its annual revenue (>10%) due to the rise in volumes in a buoyant market and increase in sales prices.
However, the group noted that the consequences of the conflict in Ukraine (direct and indirect) are changing rapidly, resulting in volatility, which is likely to affect forecasts.
The group expects to see a significant increase in its production costs in 2022, with energy as a major factor.
Verallia will continue to adjust its sales prices in order to reflect the pressure from cost inflation.
The company has reaffirmed its objective of achieving an adjusted EBITDA greater than €700 million on the back of increased volumes and its PAP programme.
It added that it will continue to implement its ESG roadmap and reaffirmed its environmental objectives.
© 2022 European Supermarket Magazine – your source for the latest packaging news. Article by Conor Farrelly. Click subscribe to sign up to ESM: European Supermarket Magazine.
