Despite the expected impact of the Covid-19 pandemic on activity in the second quarter, in late July Verallia posted a small decrease in its revenue, along with a slight decline in its adjusted EBITDA margin over the first half of the year, while continuing to reduce its net debt.
While results for Q2 2020 showed revenue was down by ‐9.6% to €630 million (‐5.4% at constant exchange rates and scope) compared to Q2 2019.
Michel Giannuzzi, Chairman and CEO of Verallia, said: “Despite the expected impact of the COVID‐19 pandemic on activity in the second quarter, Verallia confirmed its resilience by posting a limited decrease in its revenue and a slight decline in its adjusted EBITDA margin over the first half of the year, while continuing to reduce its net debt.
“This performance reflects our agility and discipline in terms of both cost management and industrial efficiency.
“Lastly, we are permanently adapting the measures necessary to guarantee our teams’ safety and health.”
In April 2020, the Group arranged an additional €250 million revolving credit facility with a one-year maturity, extendable by six months at the Group’s discretion.
Verallia also announced a transformation plan in France to adjust its production capacity in France.
The plan aims to improve its industrial performance to respond to the changes in the French market, which has seen the domestic still wine market decline.
This project includes the non-reconstruction of one of the three furnaces at the Cognac site that is coming to the end of its service life at the end of 2020.
Other notable Q2 results included:
- Slight decline of adjusted EBITDA down to €299 million in H1 2020 compared to €313 million in H1 2019
- Adjusted EBITDA margin at 23.4% compared to 23.5% in H1 2019
- Net income at €79 million
- Improvement in net debt leverage to 2.5x adjusted EBITDA for the last 12 months, compared to 2.6x as at December 31, 2019
- Dividend paid in shares for 87% of shareholders, limiting tthe impact on cash flow to €13million in July