Verallia achieved a very good financial performance throughout the year
Verallia achieved a very good financial performance throughout the year; generated a strong operating cash-flow in 2017, will release first-quarter 2018 results on 17 May 2018.
Verallia achieved a very good financial performance throughout the year, with revenue, at EUR 2,473.7 million, up 4.5% year-on-year (reported and at constant foreign exchange rates). Adjusted EBITDA was EUR 504.1 million, up 7.9% year-on-year (+8.2% at constant foreign exchange rates). Adjusted EBITDA margin was 20.4%, up 70 bps compared to 2016. Strong Operating Cash-Flow generation totalled EUR 357.8million, up EUR 115.1 million compared to 2016.
Revenue increased by 4.5%, driven by higher volumes, a slightly better mix as well as prices improvement in South America.
• In Europe, the 3.7% increase was supported by higher volumes in most countries (notably France and Iberia) as well as a slightly better mix. Exchange rates had a positive impact on revenue of 0.4%.
• In South America, reported revenue increased by 11.0%. The negative impact of the weakening of the Argentinean Peso against Euro was partially offset by the appreciation of the Brazilian real. At constant exchange rates, revenue grew by 14.0%, driven by a good level of activity in volumes (mainly beer in Brazil) as well as higher prices in a highly inflationary environment.
Adjusted EBITDA was up 7.9% (8.2% at constant exchange rates), mainly supported by volumes, as well as improved manufacturing performance.
• In Europe, adjusted EBITDA increased by 6.9%. At constant exchange rates, the robust 6.5% increase was driven by higher volumes and an improved manufacturing performance, which partly offset the production costs inflation. Sales prices were overall stable.
• In South America, adjusted EBITDA grew by 12.8%. The negative impact of the Argentinean Peso depreciation was partly compensated by the appreciation of the Brazilian real against Euro. At constant exchange rates, the strong 17.0% adjusted EBITDA increase was attributable to a high level of activity in volumes as well as the pass-through of local inflation into sales prices.
Due to the situation of the Algerian market and the difficulties of Verallia’s subsidiary Alver to reach its objectives, the company has impaired all its non-current assets for an amount of approximately EUR 35 million (with no cash impact).
Verallia generated a strong operating cash-flow in 2017, at EUR 357.8 million, up EUR 115.1 million year-on- year. An improved operational performance as well as a good management of the working capital – inventory and receivables – contributed to this increase.
Verallia has continuously deleveraged throughout the year, with a net debt of EUR 1,848.9 million, representing 3.7x its Adjusted EBITDA of EUR 504.1 million at December 31, 2017, down from 4.2x at December 31, 2016.
After early repayment of EUR 100 million of its Term Loan B Facility on November 3rd, Verallia still has a good level of liquidity available, with EUR 220 million cash on hand as well as an undrawn RCF of EUR 250 million. Moreover, the Group’s debt has a long maturity profile, with no significant reimbursement expected in the 4 coming years.
As far as outlook is concerned, the company said: “In 2018, our European markets should remain dynamic, driven by positive macroeconomics. The level of activity should be good in South America in a challenging context. Verallia anticipates a further growth in revenue and Adjusted EBITDA at constant foreign exchange rates. Recurring capex in 2018 will be around EUR 200 million (8% of revenue).”
First-quarter 2018 results will be released on 17 May 2018.
Verallia is the third largest global manufacturer of glass containers for food and beverages, and proposes innovative, customized and environmentally-friendly solutions. EUR 2.5bn revenue with 16 billion glass bottles and jars produced in 2017. Around 10,000 employees, and 33 glass production facilities in 12 countries.