Finances

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

Management approach

For Vetropack, financial stability and long-term growth take top priority. The company has established itself as a secure, reliable and fair partner for its key stakeholders. Due to its business activity and size, Vetropack is able, by adopting a prudent business policy, to make a contribution to the United Nations’ Sustainable Development Goal No. 9 (Industry, Innovation and Infrastructure).

With regard to its financial prosperity, Vetropack views cash flow as an important key figure. An improved cash flow and higher income 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. Looking at the long-term average, annual investment comes to between 8% and 9% of revenue. Having slowed somewhat in response to significant uncertainty in the first year of the pandemic, investment hit a record high of CHF 130 million in the year under review. Investment should also be higher than average in 2022 to exploit the opportunities of the current market situation as much as possible.

Vetropack promotes long-term growth by setting targets for a sustainable return on operating capital 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.

Firstly, Vetropack is investing in measures to increase production capacity by expanding and modernising furnaces and production lines and by improving efficiency, for example by investing in digitalisation.

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, Technology and Production 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 to be the main financial indicator, however, Vetropack also places great value on innovation to retain a leading position in the market. 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 its employees on the 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. Employees in key positions are given guidelines for dealing with competitors and implementing anti-corruption guidelines. Decision-makers are additionally provided with extensive information on the company’s Business Ethics Policy which focuses on fighting corruption, bribery and discrimination. Vetropack carries out regular inspections (in Accounting and Purchasing, for example) to minimise the risk of corruption and bribery and trains its employees to avoid anti-competitive actions. Vetropack has established a whistleblowing system where suspicions regarding anti-competitive behaviour can be reported. Violations can also be reported to the local Compliance Coordinator, the Management Board, 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. Vetropack carries out on-site audits of environmental and social risks at its suppliers. 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 agreed upon with every new supplier and a growing number of existing suppliers. Acceptance of the Code of Conduct for Suppliers is compulsory. Suppliers have signed the Code of Conduct for Suppliers or have provided evidence that they have their own Code of Conduct that is at least equivalent to the former. Contracts involving relevant goods or services also contain explicit clauses on environmental protection, working conditions and on compliance with human rights. Vetropack also reviews its supply chain with regard to risks relating to conflict minerals so that these risks can be minimised. Provisions are implemented for selected suppliers to ensure that they comply with the regulations for handling conflict minerals.

With regard to data privacy and data security, Vetropack follows the principles of the European General Data Protection Regulation and implements the updates required by law on an ongoing basis. In order to respond to the global increase in cyber attacks, Vetropack has continuously introduced technical measures to improve information security including secure solutions for suppliers. 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 85% of the employees exposed to corruption risks (previous year: 90%) 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 2021, 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 2021.

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 2021.

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

Both the Code of Conduct and Vetropack’s Code of Conduct for Suppliers explicitly forbid child labour. Vetropack requires both its own employees and its suppliers to comply with these provisions, communicates them and provides training in them; it also offers employees and third parties the means of reporting incidents of non-compliance on an anonymous basis free of charge. Vetropack is not aware of any operations or suppliers at risk of incidents of child labour.

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

Both the Code of Conduct and Vetropack’s Code of Conduct for Suppliers explicitly forbid forced or compulsory labour. Vetropack requires both its own employees and its suppliers to comply with these provisions, communicates them and provides training in them; it also offers employees and third parties the means of reporting incidents of non-compliance on an anonymous basis free of charge.

Vetropack is not aware of any operations or suppliers at risk of incidents 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 period under review, 92% of Vetropack Group’s employees (previous year: 97%) had received training in the relevant aspects of human rights. 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.