Global glass bottle packager Verallia has reported a revenue growth of 24% for the first quarter of 2022.
In the first quarter of the year, Verallia recorded revenue of €750 million, compared to €605 million in the first quarter of 2021. This represents a 24.0% increase in reported revenue and 23.9% organic growth.
Adjusted EBITDA* also increased and stood at €183 million. However, the adjusted EBITDA margin decreased slightly (‐72 bps) due to an increase in sales prices. This amounted to 24.4% over the quarter.
Verallia continued to reduce its net debt during the quarter. Net debt stood at €1,222 million at the end of March 2022. This corresponds to a net debt ratio of 1.7x, down from 2.1x in March 2021.
Revenue breakdown by region:
- 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-cost inflation.
- The Northern and Eastern Europe region reported approximately 10% growth in sales volumes.
- The group's exposure to Ukraine remains limited, with one plant located in the West of the country and revenue totalling around €50 million in 2021 (less than 2% of the Group revenue).
Sales prices have also been increased to mitigate the impact of the significant cost inflation.
In Latin America, sales volumes in Brazil and Chile posted strong growth, while in Argentina production was limited due to a furnace repair. Moreover, a highly dynamic approach to managing sales prices has continued in order to offset local inflation.
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.”
- The consequences of the conflict in Ukraine (direct and indirect) are changing rapidly, generating very high volatility which is likely to affect forecasts.
- Verallia anticipates a sharp growth in its annual revenue (>10%) thanks to the substantial rise in volumes in a buoyant market and the significant increase in sales prices.
- Verallia expects to see a significant increase in its production costs in 2022, of which energy is a major factor. The group will continue to adjust its sales prices in order to reflect the pressure from cost inflation.
- Verallia continues to implement its ESG roadmap and reaffirms its ambitious environmental objectives.
*Earnings before interest, taxes, depreciation and amortisation.