Notes - Integrated Annual Report and Remuneration Report 2020

1.Accounts Receivables

1. Accounts Receivables

CHF millions	31.12.2020	31.12.2019

Gross receivables	127.3	118.5
Value adjustments	– 3.8	– 2.9
Net receivables	123.5	115.6

2.Other Short-Term Receivables

2. Other Short-Term Receivables

CHF millions	31.12.2020	31.12.2019

VAT (value added tax) credit	3.9	4.1
Withholding tax credit	2.5	2.8
Other short-term receivables	7.2	3.3
Total	13.6	10.2

3. Inventories

CHF millions	31.12.2020	31.12.2019

Raw materials	13.5	13.8
Materials and supplies	54.9	48.4
Work-in-progress	4.1	3.1
Finished goods, merchandise	129.3	107.2
Advance payments	0.4	3.6
Value adjustments	– 50.5	– 39.5
Total	151.7	136.6

4.Accruals

4. Accruals

CHF millions	31.12.2020	31.12.2019

Ongoing income tax (credit)	1.1	0.4
Other accruals	0.9	1.0
Total	2.0	1.4

5. Tangible Assets

CHF millions
	Real Estate & Buildings Non- operating	Real Estate & Buildings operating	Furnaces Equipment Prod. Facilities Moulds	Other Tangible Assets	Adance Payments & Assets Under Construction	Total
Acquisition Value
As per 1.1.2019	75.3	300.2	845.4	40.8	18.8	1 280.5
Additions	0.1	1.9	29.1	1.5	88.5	121.1
Disposals	–	– 0.4	– 29.2	– 1.7	–	– 31.3
Reclassifications	–	0.9	64.8	0.7	– 62.9	3.5
Foreign exchange differences	– 0.1	– 6.6	– 14.5	– 0.6	– 1.1	– 22.9
As per 1.1.2020	75.3	296.0	895.6	40.7	43.3	1 350.9
Change consolidation scope	–	9.5	20.6	0.7	5.0	35.8
Additions	0.1	1.8	15.8	0.8	53.1	71.6
Disposals	– 22.2	– 0.3	– 24.5	– 1.5	–	– 48.5
Reclassifications	– 0.7	2.2	9.1	1.3	– 11.8	0.1
Foreign exchange differences	– 0.1	– 3.9	– 24.4	– 0.9	– 0.2	– 29.5
As per 31.12.2020	52.4	305.3	892.2	41.1	89.4	1 380.4
Accumulated Depreciation
As per 1.1.2019	30.5	180.5	513.8	32.4	–	757.2
Ordinary depreciation	1.0	7.0	64.9	2.8	–	75.7
Disposals	–	– 0.2	– 28.7	– 1.6	–	– 30.5
Reclassifications	–	–	3.5	–	–	3.5
Asset impairments*	–	–	–	–	–	–
Foreign exchange differences	–	– 3.9	– 9.9	– 0.4	–	– 14.2
As per 1.1.2020	31.5	183.4	543.6	33.2	–	791.7
Ordinary depreciation	0.9	6.6	64.4	2.4	–	74.3
Disposals	– 19.5	– 0.2	– 24.2	– 1.5	–	– 45.4
Reclassifications	–	–	–	–	–	–
Asset impairments*	–	–	–	–	–	–
Foreign exchange differences	–	– 2.0	– 11.1	– 0.6	–	– 13.7
As per 31.12.2020	12.9	187.8	572.7	33.5	–	806.9

Book Value
As per 1.1.2020	43.8	112.6	352.0	7.5	43.3	559.2
As per 31.12.2020	**39,5	**117,5	319.5	7.6	89.4	573.5

* The asset impairments relate to adjustments to the residual values of production facilities.

** This includes vacant real estate plots valued at CHF 2.6 million (2019: CHF 3.4 million).

As per 31.12.2020 payments on assets under construction amounted to CHF 2.5 million (2019: CHF 7.4 million).

6.Financial Assets

6. Financial Assets

CHF millions	Note	31.12.2020	31.12.2019

Employer's contribution reserves	28	12.3	12.3
Assets from pension funds		2.1	2.0
Deferred taxes	21	1.7	1.5
Participations in associated companies		0.3	0.5
Other financial investments		0.4	2.2
Total		16.8	18.5

7.Intangible Assets

7. Intangible Assets

CHF millions
	Software	Software in Development	Other Intangible Assets	Total
Acquisition Value
As per 1.1.2019	47.8	2.0	1.3	51.1
Additions	2.0	0.5	0.1	2.6
Disposals	– 0.5	–	–	– 0.5
Reclassifications	1.1	– 0.9	– 0.2	–
Foreign exchange differences	–	–	–	–
As per 1.1.2020	50.4	1.6	1.2	53.2
Additions	1.5	0.6	–	2.1
Disposals	– 0.1	–	–	– 0.1
Reclassifications	1.4	– 1.4	–	–
Foreign exchange differences	– 0.1	–	–	– 0.1
As per 31.12.2020	53.1	0.8	1.2	55.1
Accumulated Amortisation
As per 1.1.2019	44.0	–	1.1	45.1
Ordinary amortisation	2.0	–	–	2.0
Disposals	– 0.4	–	–	– 0.4
Reclassifications	–	–	–	–
Asset impairments	–	–	–	–
Foreign exchange differences	–	–	–	–
As per 1.1.2020	45.6	–	1.1	46.7
Ordinary amortisation	2.7	–	–	2.7
Disposals	– 0.1	–	–	– 0.1
Reclassifications	–	–	–	–
Asset impairments	–	–	–	–
Foreign exchange differences	– 0.1	–	–	– 0.1
As per 31.12.2020	48.1	–	1.1	49.2

Book Value
As per 1.1.2020	4.8	1.6	0.1	6.5
As per 31.12.2020	5.0	0.8	0.1	5.9

There were no licences, patents or brands in 2019 or 2020.

8.Financial Debts

8. Financial Debts

CHF millions	31.12.2020	31.12.2019

Residual period
– < 1 year*	5.5	0.3
– 1 to 2 years**	6.1	2.5
– 3 to 5 years***	20.7	6.7
– > 5 years****	12.5	12.5
Total	44.8	22.0

* in CHF; interest rate between 0.0% to 5.0% (2019: 0.0% to 0.85%)

** in CHF; interest rate between 0.0% to 5.0% (2019: 0.7%)

*** in CHF; interest rate between 4.85% to 6.0% (2019: 0.65% to 1.85%)

**** in CHF; interest rate 0.99% (2019: 0.99%)

As of 31 December 2020, short-term financial debts mainly included bank loans from the company in Moldova that was acquired in the reporting year. In the year 2020 no short-term financial debts (2019: CHF 8.7 million) were prolonged.

9.Other Short-Term Liabilities

9. Other Short-Term Liabilities

CHF millions	31.12.2020	31.12.2019

Prepaid recycling fee	5.0	4.6
Advance payments	2.2	1.1
Liabilities to employees	5.9	5.4
Other short-term liabilities	15.3	12.0
Total	28.4	23.1

10.Deferrals

10. Deferrals

CHF millions	31.12.2020	31.12.2019 1)

Ongoing liable income taxes	5.5	1.5
Unclaimed vacations and overtime compensations	7.4	5.3
Other deferrals	14.3	14.5
Total	27.2	21.3

¹⁾ adjusted; see note No. 29

11.Provisions

11. Provisions

CHF millions
	Service Anniversary	Pensions	Deferred Tax Liabilities	Other	Total
As per 1.1.2019 1)	4.8	14.9	19.5	6.3	45.5
Reclassifications	–	–	–	–	–
Formations 1)	1.2	2.1	1.4	5.3	10.0
Liquidations	– 0.1	– 0.1	– 4.2	0.1	– 4.3
Utilisations	– 0.1	– 1.8	–	– 2.9	– 4.8
Foreign exchange differences	– 0.1	– 0.4	– 0.3	–	– 0.8
As per 1.1.2020 1)	5.7	14.7	16.4	8.8	45.6
Reclassifications	–	–	–	–	–
Formations	0.6	1.8	0.6	2.7	5.7
Liquidations	– 0.2	– 0.1	– 1.6	– 5.7	– 7.6
Utilisations	– 0.1	– 1.7	–	– 3.2	– 5.0
Foreign exchange differences	– 0.1	– 0.2	– 0.2	–	– 0.5
As per 31.12.2020	5.9	14.5	15.2	2.6	38.2
Of which short-term	0.7	–	–	2.6	3.3
Of which long-term	5.2	14.5	15.2	–	34.9

¹⁾ adjusted; see note No. 29

12.Share Capital

12. Share Capital

The share capital is structured as follows:

CHF millions	31.12.2020	31.12.2019

13 774 000 Registered shares A (2019: 220 480) nominal value CHF 1.00 (2019: CHF 50.00) (issued and paid in full)	13.8	11.0
30 250 000 Registered shares B (2019: 880 000) nominal value CHF 0.20 (2019: CHF 10.00 (issued and paid in full)	6.0	8.8
Total	19.8	19.8

The registered shares A (Security no. 622 761) are listed on the SIX Swiss Exchange, Swiss Reporting Standard. With a closing price at the end of the year of CHF 59.70 (2019: CHF 3,040.00) total capitalisation is CHF 1,183.5 million (2019: CHF 1,205.3 million). Each registered share has one voting right.

Major Shareholders with > 3% of Voting Rights

	31.12.2020	31.12.2019

Shareholder group Cornaz according to latest SIX publication	76.1%	79.3%

The definition of major shareholders has been adjusted for this year and the previous year.

One shareholders' agreement exists between the shareholders of Cornaz AG-Holding, another between Cornaz AG-Holding and other shareholders (details see here).

13.Minority Interests

13. Minority Interests

Since 27 March 2019, Vetropack Austria Holding AG has held 100% of the shares in PrJSC Vetropack Gostomel.

14.Segment Reporting

14. Segment Reporting

The segment reporting used at the top management level for corporate management has just one significant
segment (“Glass packaging”). The secondary segment “Speciality glass” comprises only trade revenue in Switzerland (Müller + Krempel Ltd).

Net Sales per Country

CHF millions
	Change	2020	2019
Glass Packaging
– Switzerland	3.9%	77.4	74.5
– Austria	– 4.4%	194.0	203.0
– Czech Republic	– 10.1%	66.2	73.6
– Croatia	– 18.3%	101.6	124.4
– Slovakia	2.3%	61.9	60.5
– Ukraine	– 33.0%	54.7	81.7
– Italy	4.5%	90.9	87.0
– Moldova	-	3.6	–
Speciality Glass (Switzerland)	20.6%	12.3	10.2
Total	– 7.3%	662.6	714.9

Vetropack Group does not publish details on its segment results, as there is a significant risk that this could cause competitive disadvantages. The markets in which the Business Units of Vetropack operate are narrow niche sectors with few, primarily private suppliers, who could draw conclusions about the margins and prices from the segment results.

15.Other Operating Income

15. Other Operating Income

CHF millions	2020	2019

Material and energy sales	3.0	3.7
Ancillary services	1.3	0.9
Real estate management income	0.6	0.5
Internally produced additions to plant and equipment	1.2	1.7
Supplier commissions	1.8	1.8
Allocations disposal fees	2.0	1.8
Other income	2.7	2.2
Total	12.6	12.6

16.Cost of Materials

16. Cost of Materials

CHF millions	2020	2019

Raw material	100.6	106.5
Merchandise	11.3	9.5
Total	111.9	116.0

17.Personnel Expenses

17. Personnel Expenses

CHF millions	2020	2019

Wages and salaries	126.3	127.4
Social benefits	35.3	36.2
Other personnel expenses	5.9	6.1
Total	167.5	169.7

Headcount by country

	Change	31.12.2020	31.12.2019

Switzerland	– 2.0%	292	298
Austria	– 0.1%	713	714
Czech Republic	– 3.4%	451	467
Croatia	3.1%	606	588
Slovakia	1.6%	384	378
Ukraine	0.0%	631	631
Italy	3.8%	301	290
Moldova	-	504	–
Total	15.3%	3 882	3 366

18.Other Operating Expenses

18. Other Operating Expenses

CHF millions	2020	2019 1)

Maintenance and repairs	32.9	33.2
Mould costs	6.8	6.3
Packaging material	23.1	29.1
Transport costs	41.7	46.2
Other administrative and operating expenses	65.4	68.7
Total	169.9	183.5

¹⁾ adjusted; see note No. 29

19. Financial Result

CHF millions	2020	2019

Interest income	0.6	0.9
Interest expenses	– 0.3	– 0.4
Currency exchange gains	7.0	5.3
Currency exchange losses	– 5.8	– 9.4
Other financial income	–	–
Total	1.5	– 3.6

20.Non-Operating Result

20. Non-Operating Result

CHF millions	2020	2019

Non-operating real estate income	2.7	3.9
Non-operating real estate expenses	– 1.4	– 1.6
Non-operating real estate depreciation / impairments	– 0.9	– 1.0
Other non-operating income/expenses *	11.7	0.2
Total	12.1	1.5

* This position includes a gain from the sale of a non-operating property of CHF 11.7 million (2019: CHF 0.0 million).

21.Income Taxes

21. Income Taxes

CHF millions	2020	2019 1)

Ongoing income taxes	9.7	16.9
Deferred income taxes	– 1.2	– 2.7
Total	8.5	14.2

¹⁾ adjusted; see note No. 29

Loss carryforwards amounted to CHF 15.5 million (2019: CHF 10.0 million) in total at the end of the reporting year. CHF 4.5 million (2019: CHF 0.0 million) loss carryforwards were included in the calculation of the deferred income tax assets. The impact on the tax on earnings of unrecognised loss carryforwards was CHF 2.6 million in the reporting year (2019: CHF 2.1 million). In the reporting year CHF 3.5 million unrecognised loss carryforwards were used (2019: CHF 0.0 million). There was an impact of CHF -0.6 million in the reporting year on income taxes due to the use of unrecognized losses carried forward (2019: CHF 0.0 million). In the reporting year, as in the previous year, there was no impact due to the use or expiry of unrecognised loss carryforwards.

The country-specific tax rates that apply to the calculation of the deferred taxes on earnings range from 11.0% to 25.0% (2019: 11.0% to 25.0%).

The weighted average tax rate to be applied based on the ordinary result is 18.3% (2019: 20.0%).

22.Results per Participation Right

22. Results per Participation Right

The undiluted result per share is calculated by dividing the consolidated profit for the applicable year that is to be allocated to the shareholders of the Vetropack Group by the weighted average number of outstanding shares.

	2020	2019 1)

Consolidated profit allocated to the shareholders of the Vetropack Group in million CHF	81.2	72.4

Weighted number of outstanding registered shares A for undiluted result per share	19 824 000	396 480
Weighted number of outstanding registered shares B for undiluted result per share	99 120 000	1 982 400

Undiluted result per registered share A in CHF	4.10	182.61
Undiluted result per registered share B in CHF	0.82	36.52

¹⁾ adjusted; see note No. 29

The diluted result per share is calculated in the same way as the undiluted result for both share types, as no dilution potential exists for either. By resolution of the Annual General Assembly of 22 April 2020 a 1:50 share split was carried out for both categories on 4 May 2020. Furthermore, the listed bearer shares were converted into class A registered shares and the current registered shares are now designated as class B registered shares. In addition, 13,750,000 class B registered shares, each with a nominal value of CHF 0.20, were converted at a ratio of 5:1 into 2,750,000 class A registered shares, each with a nominal value of CHF 1.00.

23.Investments

23. Investments

Investment Breakdown:

CHF millions	2020	2019

Switzerland	2.6	2.5
Austria	11.3	8.0
Czech Republic	2.0	9.2
Croatia	34.7	24.6
Slovakia	3.5	28.5
Ukraine	3.9	26.6
Italy	9.2	21.7
Moldova	4.4	–
Total	71.6	121.1

24.Off Balance Sheet Transactions

24. Off Balance Sheet Transactions

CHF millions	31.12.2020	31.12.2019

Letters of comfort	2.5	2.5
Guarantees	0.4	0.6
Off balance sheet leasing	0.5	0.9
Total	3.4	4.0

Contingent liabilities are stated at their maximum amounts (full sum of liability).

The repayment structure of the off balance sheet leasing liabilities is as follows:

CHF millions	31.12.2020	31.12.2019

Maturity
– 1 to 2 years	0.4	0.8
– 3 to 5 years	0.1	0.1
– > 5 years	–	–
Total	0.5	0.9

25.Pledged Assets

25. Pledged Assets

The following assets' book values are used as collateral to secure bank credits and mortgages:

CHF millions	31.12.2020	31.12.2019

Accounts receivables	18.2	10.4
Inventories	8.7	–
Real estate	68.9	30.1
Total	95.8	40.5

26.Derivative Financial Instruments

26. Derivative Financial Instruments

No derivative financial instruments were held as at the reporting date. As at 31 December 2019, Vetropack Holding Ltd had open currency swaps in the amount of EUR 7.6 million.

27.Transactions with Closely Associated Persons

27. Transactions with Closely Associated Persons

CHF millions	31.12.2020	31.12.2019
Pension Funds
Accounts receivables	–	–
Accounts payables	0.1	0.2
Interest expenses	–	–
Associated Companies
Accounts receivables	–	–
Accounts payables	0.9	0.8
Capitalised services	–	–
Service income	–	–
Equity income	–	–
Glass cullet purchasing expenses	– 4.2	– 4.0
Maintenance and repairs expenses	– 0.3	– 0.2
Other service expenses	–	–
Equity valuation expenses	–	–
Other Closely Associated Persons
Accounts receivables	–	–
Accounts payables	3.2	0.2
Investments in tangible assets	2.7	–
Distribution income	–	–
Packaging material expenses	– 0.3	– 0.5
Distribution expenses	–	–
Service expenses	– 0.1	–
Interest expenses	–	–
Tangible assets sales	–	–

The classification of “Other Closely Associated Persons” includes transactions with the following natural persons and legal entities, irrespective of the Vetropack Company in which they occurred: shareholders with voting rights of more than 20%, BoD members, MB members and all companies that are directly or indirectly controlled by these persons.

Transactions with closely associated persons and companies are handled on the basis of normal market terms and conditions.

28.Pension Fund

28. Pension Fund

There exist various pension schemes within the Group, which are based on regulations of their respective countries. In Switzerland, these are contributor funded schemes in accordance with Swiss pension fund law; abroad they are state-guaranteed contribution-based pension schemes. The schemes are financed either through contributions to legally independent institutions and trusts or by registering the pension fund liability in the financial statements of the Group companies.

Employer's Contribution Reserves

Company Sponsored Pension Funds

CHF millions	2020	2019

Nominal value 31.12.	12.9	13.0
Utilisation waiver 31.12.	–	–
Other value adjustments 31.12.	–	–
Discounting effects 31.12.	– 0.6	– 0.7
Book value 31.12.	12.3	12.3

Assets and Liabilities from Pension Funds

CHF millions
	Company Sponsored Pension Funds	Pension Funds without Excess / Deficiency Cover	Pension Funds with Excess / Cover	Pension Funds without own Assets	Total
Excess / deficiency cover 31.12.2020	13.8	–	32.2	–	46.0
Economic utilisation/liabilities 31.12.2019	–	–	–	– 12.1	– 12.1
Economic utilisation/liabilities 31.12.2020	–	–	–	– 11.9	– 11.9
Changes 2020	–	–	–	– 0.2	– 0.2
Contributions restricted to the period*	–	–	2.5	1.6	4.1
Pension expenses 2019	–	–	2.4	1.9	4.3
Pension expenses 2020	–	–	2.5	1.4	3.9

* including changes in employer's contribution reserves

The values for pension funds of Swiss companies are based on previous years' financial statements, whereby all substantive decisions in the current fiscal year are taken into account. The uncommitted funds are not available to the Vetropack Group.

CHF millions	2020	2019

Key influential factors
– Changes in employer's contribution reserves	–	0.1
– Changes in economic utilisation / liabilities	– 0.2	– 0.3
– Pension fund contributions	4.1	4.5
Total Pension Fund Expenses	3.9	4.3

29.Correction previous year's figures

29. Correction previous year's figures

Due to incorrect recordings of the wastewater quantities in the Austrian Kremsmünster production plant, sewer fees that were too low were charged to the plant in the years 2010 to 2019. In 2020, the extent of the deviation was recorded and reported to the responsible authority. This will lead in 2020 to an additional payment after taxes of CHF 3.8 million. For reasons of comparability, the previous year's figures have been adjusted as follows:

Consolidated Balance Sheet 31.12.2019
CHF millions	reported	correction	corrected
Deferrals	22.6	– 1.3	21.3
Short-term provisions	4.4	5.1	9.5
Retained earnings	659.1	– 3.2	655.9
Consolidated profit	73.0	– 0.6	72.4

Consolidated Income Statement Half Year 2019
CHF millions	reported	correction	corrected
Other operating expenses	– 182.7	– 0.8	– 183.5
Income taxes	– 14.4	0.2	– 14.2
Consolidated Profit	73.0	– 0.6	72.4

Consolidated Cash Flow Statement 31.12.2019
CHF millions	reported	correction	corrected
Consolidated profit incl. minorities	73.7	– 0.6	73.1
Increase/decrease in provisions (+/–)	1.1	0.8	1.9
Operating Cash Flow before Change of Net Working Capital	153.1	0.2	153.3
Increase/decrease in other liabilities and deferrals (+/-)	2.4	– 0.2	2.2

Changes in Consolidated Shareholders' Equity
CHF millions	reported	correction	corrected
Shareholders' Equity as per 1.1.2018	688.3	– 2.7	685.6
Consolidated profit	58.1	– 0.5	57.6
Shareholders' Equity as per 1.1.2019	711.6	– 3.2	708.4
Consolidated profit	73.0	– 0.6	72.4
Shareholders' Equity as per 31.12.2019	752.2	– 3.8	748.4

30.Acquisition

30. Acquisition

On 10 December 2020, the group acquired a Moldovan glass factory based in Chișinău and fully consolidated it for the first time from 30 November 2020.

The current values of the net assets as at the date of acquisition are as follows:

CHF millions	30.11.2020

Liquid funds	1.6
Accounts receivables	15.3
Other short-term receivables	2.9
Inventories	9.0
Subtotal Short-term Assets	28.8
Long-term Assets	37.1
Total Assets	65.9
Accounts payables	3.7
Short-term financial debts	2.0
Advance payments	2.4
Other short-term liabilities	2.2
Deferrals	1.0
Subtotal Short-term Liabilities	11.3
Long-term financial debts	27.8
Subtotal Long-term Liabilities	27.8
Total Liabilities	39.1
Acquired net assets, measured at current market value	26.8
Goodwill from the acquisition	31.7
Total	58.5
Total consideration	58.5
Analysis of cash outflow as a result of the company acquisition:
Amount paid in 2020 (investment activity)	44.4
Cash acquired with the subsidiary (investment activity)	– 1.6
Actual cash outflow as a result of the company acquisition	42.8

The total consideration includes a fixed purchase price component of CHF 44.4 million and further payments dependent on future results, which presently is estimated at CHF 14.1 million.

The goodwill of a purchased consolidated company is offset with equity at the date of acquisition. The theoretical amortisation of the goodwill is over the useful live of five years. A theoretical capitalisation of the goodwill would have the following impact on the consolidated financial statements:

CHF millions	2020	2019

Theoretical goodwill
Gross book value as at 01.01.	16.8	16.8
Addition from acquisition	31.7	–
Gross book value as at 31.12.	48.5	16.8
Accumulated amortisation as at 01.01.	– 15.0	– 11.6
Amortisation	– 2.3	– 3.4
Accumulated amortisation as at 31.12.	– 17.3	– 15.0
Net book value as at 01.01.	1.8	5.2
Net book value as at 31.12.	31.2	1.8

Effect on Balance Sheet
Sharholders' Equity according to Balance Sheet	763.6	748.4
Theoretical capitalisation of net book value of goodwill	31.2	1.8
Theoretical Shareholders' Equity incl. net book value of goodwill	794.8	750.2

Effect on Income Statement
Consolidated Profit	81.2	72.4
Amortisation goodwill	– 2.3	– 3.4
Theoretical Consolidated Profit incl. amortization of goodwill	78.9	69.0

31.Events after the Balance Sheet Date

31. Events after the Balance Sheet Date

No significant events occurred between the balance sheet date and the Board of Directors approving the consolidated financial statements on 10 March 2021 that could negatively affect the declarations made in the 2020 annual financial statements.