Finances

Cash flow and profitability, sustainable growth and market position, sustainable return on capital

Management approach

An improved cash flow and higher profitability go hand in hand with sustainable growth. Such a situation ensures the availability of all the resources needed to make investments and thus safeguard Vetropack’s leading market position. Vetropack promotes long-term growth by setting targets for a sustainable return on operating capital employed (ROOCE). When doing so, Vetropack also takes into account the interests of its stakeholders and the social, economic and environmental impact of its business activities.

At the same time, Vetropack is investing in measures to increase production capacity by expanding and modernising furnaces and to improve efficiency, for example by investing in digitalisation. The careful utilisation of resources, raw materials and personnel, and the reduction of waste, contribute to both financial and environmental success at the company.

Vetropack implemented various measures for boosting the efficiency of work processes in the reporting year. The company migrated the ERP system to the latest technology. This system serves as the basis for a variety of tools such as the system for optimising transport routes, which was implemented successfully in all plants in the year under review, and generates both economic and environmental added value. Pallet management was also optimised across the Group with the aid of the new system. Customers can now report returns digitally, which allows Vetropack to distribute the pallets to the different glassworks according to their requirements and means that a considerable amount of manual work is no longer needed. This also enables Vetropack to reduce the number of pallets used.

Vetropack views the achievement of sustainable growth as a Group-wide task. The Group strategy forms the foundation for numerous projects and initiatives that are supervised, monitored and coordinated by top-level management. Whereas the Sales department is responsible for pricing policy, the Research and Development team is working to further reduce the weight of glass containers and develop new products. The Administration and IT department is developing and implementing measures designed to further increase efficiency.

Vetropack Group continually measures the progress it makes by using operating result targets and associated KPIs, such as the costs per tonne of saleable glass produced, for example. In the reporting year, the Board of Directors of Vetropack Group declared the return on operating capital employed (ROOCE) to be the main financial indicator, a decision based on the “Group first” philosophy. This means that Group-wide synergies are to be increasingly exploited to sustainably boost the return on capital. However, to retain a leading position on the market, Vetropack also places great value on innovation. The company measures progress using the innovation rate (number of new glass containers divided by total units sold), amongst other indicators.

Disclosures

GRI 201 Economic Performance
201-1 Direct economic value generated and distributed

Compliance

Management approach

Compliance with legal provisions and international standards, such as those relating to human rights, for example, is essential for gaining the trust of key international customers in the food and beverage industry and thus ensuring the long-term success of Vetropack.

In order to ensure that awareness of the importance of fair business practices is firmly embedded in Vetropack’s corporate culture, the company provides training to employees on its Code of Conduct, which is based on the values of honesty, reliability and transparency. All employees are required to comply with the principles set out in the Code of Conduct. Decision-makers are additionally provided with extensive information on the company’s Business Ethics Policy which focuses on fighting corruption, bribery and discrimination. Violations can be reported to the local Compliance Coordinator, the General Manager, the Compliance and Legal department or the CEO of Vetropack Group. Vetropack also encourages all employees to report any suspected violations while observing the principle of proportionality.

Standardised SMETA audits (Sedex Members Ethical Trade Audits) are performed in order to monitor compliance with the company’s Business Ethics Policy and occupational safety and environmental protection provisions. In the reporting year, SMETA audits were conducted at Vetropack Straža d.d. and PrJSC Vetropack Gostomel. Audits are also conducted on a regular basis to determine whether suppliers are in compliance with the Supplier Code. Vetropack’s new contractual conditions are already being agreed upon with every new supplier and a growing number of existing suppliers.

With regard to data privacy and data security, Vetropack follows the principles of the European General Data Protection Regulation. In order to respond to the global increase in cyber attacks, Vetropack has introduced further technical measures to improve information security. For example, the network architecture was reworked and new solutions for external connections and Vetropack’s external security rating were established. These and other measures ensure a much higher security rating.

Disclosures

GRI 205 Anti-Corruption
205-2 Communication and training about anti-corruption policies and procedures

Employees and suppliers are provided with information on the Anti-Corruption Guidelines on a regular basis. At the end of the fiscal year, 100% of the Management Board and 90% of employees exposed to corruption risks had been informed of measures and procedures in place to fight corruption since joining the company. These measures and procedures are primarily based on the Business Ethics Policy (BEP) of Vetropack Group. In 2020, training courses on anti-corruption were conducted at the Bülach site.

GRI 206 Anti-Competitive Behaviour
206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices

No legal actions for anti-competitive behaviour were initiated in 2020.

GRI 307 Environmental Compliance
307-1 Non-compliance with environmental laws and regulations

GRI 419 Socioeconomic Compliance
419-1 Non-compliance with laws and regulations in the social and economic area

GRI 406 Non-discrimination
406-1 Incidents of discrimination and corrective actions taken

There were no incidents of discrimination in 2020.

GRI 408 Child Labour
408 -1 Operations and suppliers at significant risk for incidents of child labour

Because Vetropack only operates in Europe, the company has no production facilities that represent a risk in terms of child labour.

GRI 409 Forced or Compulsory Labour
409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labour

Because Vetropack only operates in Europe, the company has no production facilities that represent a risk in terms of forced or compulsory labour.

GRI 412 Human Rights Assessment
412-2 Employee training on human rights policies or procedures

At the end of the reporting year, 97% of the employees at Vetropack Group had received training on relevant human rights issues. This figure does not relate exclusively to the reporting period but instead takes into account all employees who have received this training since joining the company.

GRI 418 Customer Privacy
418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

Compliance with legal provisions and contractual obligations for protecting customer data is a top priority at Vetropack. In order to establish data protection as a firm component of its corporate culture, Vetropack has formulated internal IT guidelines and guidelines for protecting internal and third-party intellectual property. No complaints were reported during the period under review.