Notes - Integrated Annual Report and Remuneration Report 2022

1.Accounts Receivables

CHF millions	31.12.2022	31.12.2021

Gross receivables	184.9	147.7
Value adjustments	– 5.9	– 5.2
Net receivables	179.0	142.5

2.Other Short-Term Receivables

CHF millions	31.12.2022	31.12.2021

VAT (value added tax) credit	20.4	8.2
Withholding tax credit	2.2	2.9
Other short-term receivables	8.7	5.3
Total	31.3	16.4

3. Inventories

CHF millions	31.12.2022	31.12.2021

Raw materials	17.1	14.0
Materials and supplies	58.9	59.7
Work-in-progress	4.9	4.1
Finished goods, merchandise	115.4	109.1
Advance payments	0.7	0.5
Value adjustments	– 41.5	– 42.8
Total	155.5	144.6

4.Prepaid expenses and accrued income

CHF millions	31.12.2022	31.12.2021

Ongoing income tax (credit)	2.9	1.2
Other prepaid expenses and accrued income	3.3	1.4
Total	6.2	2.6

5. Tangible Assets

CHF millions
	Real Estate & Buildings Non- operating	Real Estate & Buildings operating	Furnaces, Equipment, Prod. Facilities, Moulds	Other Tangible Assets	Advance Payments & Assets Under Construction	Total
Acquisition Value
As per 1.1.2021	52.4	305.4	892.2	41.0	89.4	1 380.4
Additions	–	2.2	21.2	2.2	92.6	118.2
Disposals	–	0.7	– 12.7	– 2.2	–	– 14.2
Reclassifications	–	17.3	60.5	0.7	– 78.5	–
Foreign exchange differences	– 0.1	– 8.8	– 22.6	– 0.9	– 4.3	– 36.7
As per 1.1.2022	52.3	316.8	938.6	40.8	99.2	1 447.7
Additions	0.1	0.2	8.5	1.5	183.8	194.1
Disposals	–	–	– 9.3	– 1.4	–	– 10.7
Reclassifications	0.1	1.0	11.6	0.7	– 13.4	–
Foreign exchange differences	– 0.1	– 13.5	– 50.3	– 2.0	– 8.4	– 74.3
As per 31.12.2022	52.4	304.5	899.1	39.6	261.2	1 556.8
Accumulated Depreciation
As per 1.1.2021	12.9	187.8	572.7	33.5	–	806.9
Ordinary depreciation	0.9	7.2	71.4	2.5	–	82.0
Disposals	–	0.7	– 12.5	– 2.2	–	– 14.0
Reclassifications	–	0.1	–	– 0.1	–	–
Asset impairments	–	–	0.1	0.1	–	0.2
Foreign exchange differences	–	– 5.0	– 15.1	– 0.7	–	– 20.8
As per 1.1.2022	13.8	190.8	616.6	33.1	–	854.3
Ordinary depreciation	0.9	6.4	61.8	2.1	–	71.2
Disposals	–	–	– 6.0	– 1.3	–	– 7.3
Asset impairments*	–	1.3	15.5	0.5	0.6	17.9
Foreign exchange differences	–	– 7.3	– 32.2	– 1.5	0.1	– 40.9
As per 31.12.2022	14.7	191.2	655.7	32.9	0.7	895.2

Book Value
As per 1.1.2022	38.5	126.0	322.0	7.7	99.2	593.4
As per 31.12.2022	**37.7	**113,3	243.4	6.7	***260,5	661.6

* of which CHF 15.6 million relates to the Ukrainian production plant in Gostomel, which is reported in the extraordinary result

** of which vacant real estate plots valued at CHF 18.8 million (2021: CHF 19.7 million)

*** of which payments on assets under construction CHF 5.6 million (2021: CHF 0.7 million)

6.Financial Assets

CHF millions	Note	31.12.2022	31.12.2021

Employer's contribution reserves	29	11.8	12.5
Assets from pension plans		2.1	2.1
Deferred taxes	22	2.8	2.3
Participations in associated companies		0.3	0.3
Other financial investments		0.3	0.2
Total		17.3	17.4

7.Intangible Assets

CHF millions
	Software	Software in Development	Other Intangible Assets	Total
Acquisition Value
As per 1.1.2021	53.1	0.8	1.2	55.1
Additions	0.8	0.1	0.1	1.0
Disposals	– 0.2	–	–	– 0.2
Reclassifications	0.6	– 0.6	–	–
As per 1.1.2022	54.3	0.3	1.3	55.9
Additions	0.1	0.4	–	0.5
Disposals	– 1.6	–	–	– 1.6
Reclassifications	0.1	– 0.1	–	–
Foreign exchange differences	– 0.1	–	–	– 0.1
As per 31.12.2022	52.8	0.6	1.3	54.7
Accumulated Amortisation
As per 1.1.2021	48.1	–	1.1	49.2
Ordinary amortisation	2.2	–	–	2.2
Disposals	– 0.2	–	–	– 0.2
As per 1.1.2022	50.1	–	1.1	51.2
Ordinary amortisation	1.8	–	–	1.8
Disposals	– 1.6	–	–	– 1.6
As per 31.12.2022	50.3	–	1.1	51.4

Book Value
As per 1.1.2022	4.2	0.3	0.2	4.7
As per 31.12.2022	2.5	0.6	0.2	3.3

In 2021 and 2022 there were no licenses, patents and trademarks.

8.Financial Debts

CHF millions	31.12.2022	31.12.2021

Residual period
– < 1 year*	10.2	11.5
– 1 to 2 years**	2.9	7.9
– 3 to 5 years***	69.9	5.6
– > 5 years****	95.8	12.5
Total	178.8	37.5

* in CHF; interest rate between 0.70% to 7.20% (2021: 0.65 to 1.85%)

** in CHF; interest rate between 7.18% to 7.20% (2021: 0.70% to 3.25%)

*** in CHF; interest rate between 1.00% to 3.58% (2021: 4.60% to 6.00%)

**** in CHF; interest rate between 0.77% to 3.78% (2021: 0.99%)

9.Other Short-Term Liabilities

CHF millions	31.12.2022	31.12.2021

Prepaid recycling fee	5.3	5.4
Advance payments	2.6	1.8
Liabilities to employees	6.8	6.5
Other short-term liabilities	11.2	13.5
Total	25.9	27.2

10.Accrued expenses and deferred income

CHF millions	31.12.2022	31.12.2021

Ongoing liable income taxes	5.6	6.8
Unclaimed vacations and overtime compensations	7.8	7.5
Other accrued expenses and deferred income	18.4	16.6
Total	31.8	30.9

11.Provisions

CHF millions
	Service Anniversary	Pensions	Deferred Tax Liabilities	Other	Total
As per 1.1.2021	5.9	14.5	15.2	2.6	38.2
Reclassifications	–	–	–	–	–
Additions	0.8	1.8	1.8	7.8	12.2
Releases	– 0.2	– 0.1	– 1.2	– 0.2	– 1.7
Utilisations	– 0.1	– 2.7	–	– 6.3	– 9.1
Foreign exchange differences	– 0.2	– 0.6	–	– 0.1	– 0.9
As per 1.1.2022	6.2	12.9	15.8	3.8	38.7
Reclassifications	–	–	–	–	–
Additions	0.3	2.8	1.8	6.5	11.4
Releases	– 0.6	– 0.4	– 1.7	– 1.0	– 3.7
Utilisations	– 0.3	– 2.3	–	– 3.0	– 5.6
Foreign exchange differences	– 0.3	– 0.7	– 0.6	– 0.2	– 1.8
As per 31.12.2022	5.3	12.3	15.3	6.1	39.0
Of which short-term	0.6	–	–	6.1	6.7
Of which long-term	4.7	12.3	15.3	–	32.3

Deferred Tax Liabilities: details see here.

Service Anniversaries: Provisions are formed in respect to remuneration for long service to the company as defined in the Employment Regulations. These provisions, which take into account country-specific corrective factors for the staff turnover, were discounted between 0% to 13% (2021: 0% to 11%) as per balance sheet date.

12.Share Capital

The share capital is structured as follows:

CHF millions	31.12.2022	31.12.2021

13 774 000 Registered shares A (2021: 13 774 000) nominal value CHF 1.00 (2021: CHF 1.00) (issued and paid in full)	13.8	13.8
30 250 000 Registered shares B (2021: 30 250 000) nominal value CHF 0.20 (2021: CHF 0.20) (issued and paid in full)	6.0	6.0
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 36.10 (2021: CHF 57.60) total capitalisation is CHF 715.6 million (2021: CHF 1,141.9 million). Each registered share has one voting right.

Major Shareholders with > 3% of Voting Rights

	31.12.2022	31.12.2021

Shareholder group Cornaz according to latest SIX publication	71.6%	71.6%

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

13.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 by supplying Country

CHF millions
	Change	2022	2021
Glass Packaging
– Switzerland	14.3%	91.3	79.9
– Austria	10.4%	242.2	219.4
– Czech Republic	5.1%	83.8	79.7
– Croatia	25.6%	167.3	133.2
– Slovakia	29.7%	82.5	63.6
– Ukraine	– 77.4%	14.3	63.4
– Italy	11.2%	128.5	115.6
– Republic of Moldova	50.6%	75.3	50.0
Speciality Glass (Switzerland)	21.4%	14.2	11.7
Total	10.2%	899.4	816.5

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.

14.Other Operating Income

CHF millions	2022	2021

Material and energy sales	5.8	3.2
Ancillary services	1.5	1.7
Real estate management income	0.6	0.6
Internally produced additions to plant and equipment	1.8	2.5
Supplier commissions	0.5	1.1
Allocations disposal fees	2.2	2.2
Income from subsidies	9.4	0.4
Other income	3.9	3.5
Total	25.7	15.2

15.Material expenses

CHF millions	2022	2021

Raw material	121.0	116.6
Merchandise	14.6	11.6
Total	135.6	128.2

16.Energy expenses

Despite the lower production volume, energy expenses increased by CHF 108.7 million (75.7 percent) in 2022 compared to 2021. This is due to the very volatile and, on average, sharp rise in prices for natural gas and electricity in the year under review.

17.Personnel Expenses

CHF millions	2022	2021

Wages and salaries	133.4	137.5
Social benefits	38.1	39.7
Other personnel expenses	6.1	6.5
Total	177.6	183.7

	Change	31.12.2022	31.12.2021

Workforce	– 8.6%	3 561	3 896

18.Other Operating Expenses

CHF millions	2022	2021

Maintenance and repairs	36.2	34.6
Mould costs	6.7	8.3
Packaging material	38.3	34.2
Transport costs	56.8	54.4
Other administrative and operating expenses	79.6	71.4
Total	217.6	202.9

19. Financial Result

CHF millions	2022	2021

Interest income	0.5	0.8
Interest expenses	– 4.4	– 1.5
Currency exchange gains	23.9	5.3
Currency exchange losses	– 27.7	– 11.1
Other financial income	–	–
Total	– 7.7	– 6.5

20.Non-Operating Result

CHF millions	2022	2021

Non-operating real estate income	2.8	2.7
Non-operating real estate expenses	– 1.1	– 1.2
Non-operating real estate depreciation/impairments	– 0.9	– 0.9
Other non-operating income/expenses	– 0.7	0.2
Total	0.1	0.8

21.Extraordinary Result

This position includes impairments on receivables (CHF 0.3 million), inventories (CHF 7.5 million) and fixed assets (CHF 15.6 million) of the glass factory in Ukraine. Furthermore, costs of CHF 8.0 million incurred in 2022 for clean-up and re-repair work in the glassworks Gostomel are included.

22.Income Taxes

CHF millions	2022	2021

Ongoing income taxes	9.9	12.1
Deferred income taxes	– 0.5	–
Total	9.4	12.1

Loss carryforwards amounted to CHF 8.0 million (2021: CHF 9.0 million) in total at the end of the reporting year. No loss carryforwards were included in the calculation of the deferred income tax assets (2021: CHF 0.0 million). The impact on the tax on earnings of unrecognised loss carryforwards was CHF 3.9 million in the reporting year (2021: CHF 2.2 million). In the reporting year CHF 2.8 million unrecognised loss carryforwards were used (2021: CHF 6.0 million). There was an impact of CHF -0.7 million in the reporting year on income taxes due to the use of unrecognized losses carried forward (2021: CHF -1.1 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 11.6% to 25.0% (2021: 11.6% to 25.0%). The weighted average tax rate to be applied based on the ordinary result is 17.5% (2021: 19.1%).

23.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.

	2022	2021

Consolidated profit allocated to the shareholders of the Vetropack Group in million CHF	40.7	63.8

Weighted number of outstanding registered shares A for undiluted result per share	19 824 000	19 824 000
Weighted number of outstanding registered shares B for undiluted result per share	99 120 000	99 120 000

Undiluted result per registered share A in CHF	2.05	3.22
Undiluted result per registered share B in CHF	0.41	0.64

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.

24.Investments Tangible Assets

Investments by Asset Class

CHF millions	2022	2021

Real Estate & Buildings Non-operating	0.1	–
Real Estate & Buildings operating	0.2	2.2
Furnaces Equipment, Prod. Facilities, Moulds	8.5	21.2
Other Tangible Assets	1.5	2.2
Advance Payments & Assets Under Construction	183.8	92.6
Total	194.1	118.2

25.Off Balance Sheet Transactions

CHF millions	31.12.2022	31.12.2021

Letters of comfort	2.7	2.7
Guarantees*	291.5	7.9
Off balance sheet leasing	2.0	2.4
Total	296.2	13.0

* As of 31 December 2022, CHF 137.9 million had not been used as a loan by the guarantee holder.

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	31.12.2022	31.12.2021

Maturity
– 1 to 2 years	0.8	0.9
– 3 to 5 years	1.2	1.1
– > 5 years	–	0.4
Total	2.0	2.4

26.Pledged Assets

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

CHF millions	31.12.2022	31.12.2021

Accounts receivables	27.1	18.0
Inventories	6.9	7.3
Real estate	56.1	59.0
Total	90.1	84.3

27.Derivative Financial Instruments

As at 31 December 2022, Vetropack Holding Ltd has open currency swaps in the amount of EUR 64.0 million (CHF 63.0 million) with a negative market value of CHF 73.600.

28.Transactions with Related Parties

CHF millions	31.12.2022	31.12.2021
Pension Funds
Accounts receivables	–	–
Accounts payables	0.1	0.1
Interest expenses	–	–
Associated Companies
Accounts receivables	–	–
Accounts payables	0.9	1.0
Capitalised services	–	–
Service income	–	–
Equity income	–	–
Glass cullet purchasing expenses	– 4.4	– 4.6
Maintenance and repairs expenses	–	–
Other service expenses	–	–
Equity valuation expenses	–	–
Other Closely Associated Persons
Accounts receivables	–	–
Accounts payables	–	0.2
Investments in tangible assets	–	–
Distribution income	–	–
Service income	–	–
Packaging material expenses	–	– 0.4
Distribution expenses	–	–
Service expenses	– 0.1	– 0.1
Interest expenses	–	–
Tangible assets/material sales	1.0	–

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.

29.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	2022	2021

Nominal value 31.12.	12.4	13.1
Utilisation waiver 31.12.	–	–
Other value adjustments 31.12.	–	–
Discounting effects 31.12.	– 0.5	– 0.6
Book value 31.12.	11.8	12.5

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 31.12.2022	13.8	–	77.8	–	91.6
Economic utilisation/liabilities 31.12.2021	–	–	–	– 10.3	– 10.3
Economic utilisation/liabilities 31.12.2022	–	–	–	– 9.7	– 9.7
Changes 2022	–	–	–	– 0.6	– 0.6
Contributions restricted to the period*	0.6	–	2.6	2.6	5.8
Pension expenses 2021	– 0.2	–	2.5	0.5	2.8
Pension expenses 2022	0.6	–	2.6	2.0	5.2

* 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	2022	2021

Key influential factors
– Changes in employer's contribution reserves	0.7	– 0.2
– Changes in economic utilisation / liabilities	– 0.6	– 1.5
– Pension fund contributions	5.1	4.5
Total Pension Fund Expenses	5.2	2.8

30.Acquisition

The total consideration includes a fixed purchase price component of CHF 44.4 million for the acquisition of the Moldovan glass factory in Chișinău and further payments dependent on future results, which as of 31.12.2021 is estimated at CHF 14.1 million. There was no change in the estimate as of 31.12.2022.

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

CHF millions	2022	2021

Theoretical goodwill
Gross book value as at 1.1.	44.8	34.4
Addition from acquisition	–	10.4
Gross book value as at 31.12.	44.8	44.8
Accumulated amortisation as at 1.1.	– 22.9	– 17.3
Amortisation	– 5.6	– 5.6
Accumulated amortisation as at 31.12.	– 28.5	– 22.9
Net book value as at 1.1.	21.9	17.1
Net book value as at 31.12.	16.3	21.9

Effect on Balance Sheet
Sharholders' Equity according to Balance Sheet	749.3	774.5
Theoretical capitalisation of net book value of goodwill	16.3	21.9
Theoretical Shareholders' Equity incl. net book value of goodwill	765.6	796.4

Effect on Income Statement
Consolidated Profit	40.7	63.8
Amortisation goodwill	– 5.6	– 5.6
Theoretical Consolidated Profit incl. amortization of goodwill	35.1	58.2

31.Events after the Balance Sheet Date

No events occurred between 31 December 2022 and 8 March 2023 (approval of the consolidated annual report by the Board of Directors) that would result in an adjustment to the carrying amounts of assets and liabilities or would need to be disclosed here.