Vetropack: positive performance in a still difficult economic environment

In the first half of the financial year, the Vetropack Group generated consolidated gross revenue of CHF 306.7 million (first half of 2010: CHF 331.8 million). Consolidated EBIT totalled CHF 42.8 mill…

In the first half of the financial year, the Vetropack Group generated consolidated gross revenue of CHF 306.7 million (first half of 2010: CHF 331.8 million). Consolidated EBIT totalled CHF 42.8 million (first half of 2010: CHF 42.6 million), and consolidated net profit for the first half of the year rose to CHF 25.7 million (first half of 2010: CHF 19.6 million). The cash flow margin reached a strong 21.0% (first half of 2010: 19.3%) of gross revenue. Capacity was fully utilized at all plants. In the first half of the financial year, the prevailing economic factors were the strong Swiss franc and a market with no clear signs of a sustainable upturn in demand. In this environment, the Vetropack Group generated consolidated gross revenue of CHF 306.7 million (first half of 2010: CHF 331.8 million), down 7.6% year-on-year. However, after currency adjustments, an increase of 2.7% was attained. Demand stabilized at the previous year“s level and only showed restrained growth in individual countries. Ukraine“s newly introduced alcohol tax significantly curbed consumption and, thus, demand. The Vetropack Group“s sales volume totalled 2.16 billion units of glass packaging (first half of 2010: 2.20 billion). Without neglecting the domestic markets, the strategically important export markets were expanded further. The export share increased to 41.4% (first half of 2010: 39.9%). Despite the ongoing negative currency effects, the consolidated EBIT remained virtually stable at CHF 42.8 million (first half of 2010: CHF 42.6 million). As a result of the essential price changes and the optimization of the product mix, the EBIT margin reached 14.0% (first half of 2010: 12.8%). Consolidated net profit for the first half of the year rose by 31.1% to CHF 25.7 million (first half of 2010: CHF 19.6 million). The improved margin structure and the reduction in exchange rate losses as compared with the previous year were key factors in this positive development. Cash flow remained at the same level as the previous year, at CHF 64.3 million (first half of 2010: CHF 64.0 million). The cash flow margin remained strong at 21.0% (first half of 2010: 19.3%) of gross revenue. There are still no signs of a significant improvement in the economic environment for the second half of 2011. The aforementioned alcohol tax that was recently introduced in Ukraine will impede the country“s return to growth market status in the short to medium term. Furthermore, demand is not expected to rise significantly in Western or Central Europe this year. It remains difficult to predict the development of the exchange rate and its impact on results. Based on the present currency trend, EBIT and net profit are expected to languish behind the previous year“s values.