From the outset of the crisis, Verallia has immediately undertaken all necessary measures to guarantee the safety and health of its employees worldwide and ensure business continuity. Adaptation plans have been implemented at Group and country levels to ensure the following priorities are met:
- Employee safety
Verallia immediately put in place all required health precautionary initiatives to prevent the spread of the virus at its production sites. In addition, remote work has been swiftly rolled out in all possible cases. - Business continuity and production
As a key supplier to the food industry, the Group has managed to maintain all of its production sites running, adapting its production volumes, and thus serve its customers to the fullest extent possible. In Northern Europe, Italy and Iberia, the plants continue to operate at a sustained level. France and Latin America are more impacted due to the workforce available on‐site and the decline in demand from certain customers. - Strong financial structure
Verallia benefits from a very solid balance sheet structure: the leverage ratio at December 31, 2019 was 2.6x the adjusted EBITDA, a level far below the maximum leverage ratio set out in Verallia’s Group financing documentation which is at 5x. The Group has no significant debt maturities before 2024 and enjoys a strong liquidity. The Group has drawn down 200 million EUR of its 500 million EUR Revolving Credit Facility on the 20th of March 2020. As of Friday April 3rd, 2020, Verallia had 535 million EUR in liquidity (calculated as the Cash + Undrawn Revolving Credit Facility ‐ Outstanding Commercial Papers).
Verallia: united and responsible
Given its financial strength and resilience, Verallia does not intend to apply for the financial support offered by the French government (public loans or guarantees, deferrals of tax or social charges payments,…) in order to allow businesses that need them the most to benefit from those financial measures. Only after having used employees’ holidays, banked hours or RTT (reduction of working hours) to the highest extent possible did Verallia apply for partial unemployment, in the most responsible and restricted manner.
The management recognizes the remarkable commitment and responsiveness of all the Group’s employees, as well as the teams’ spontaneous movements of solidarity towards the local communities where the production sites are located, such as donations of hospital equipment, hydroalcoholic gels, protective clothing or masks.
In addition, Michel Giannuzzi, Verallia’s CEO, has decided to contribute to the Group’s collective effort by foregoing his 2020 variable compensation, which represents 50 percent of his total annual compensation. All other Executive Committee members also participate in this joint effort by renouncing 15 percent of their total annual compensation. This amount will be dedicated to additional donations at local level.
Outlook
Given the unprecedented nature of the situation caused by the COVID‐19 pandemic and the corresponding lack of visibility, the Group withdraws its 2020 annual guidance announced on February 20, 2020. Verallia will provide a detailed update at the time of its first quarter results announcement on April 28, 2020.