Management report

Mr Reiter, the 2024 fiscal year is now closed. There’s no doubt that it was a challenging year for the entire Group. How would you sum it up?

Of course, you can’t be satisfied if you come to the end of what was – indeed – a very strenuous and challenging year, and yet the bottom line shows you only made a small profit year-on-year. And, although we did predict this to a certain extent, our aspiration is obviously very different – as it has to be, given that we are one of the market and technology leaders in our industry.

On the other hand, it has to be said that we performed well under the prevailing circumstances. And unlike others in our industry, we’ve been able to stand our ground very well in this complex environment. This is what makes me optimistic about the years to come: as a group of companies, we showed enormous commitment, team spirit and an extremely high level of motivation to perform in 2024, despite all the adversities. This produced a visible impact – especially in the second half of the year – and at least we saw some first signs that our business is normalising. We achieved a positive result, and we were able to utilise the capacity of our production facilities.

So have we already bottomed out, and are we going to see a stronger result again in 2025?

We can’t yet talk about a real turnaround in the trend. 2025 is going to be another demanding year, and there are many question marks – particularly as regards global politics. To take an example: if there are trade conflicts which then have an impact on raw material and energy prices, our business will also be affected. All of us, of course, have just recently experienced how nervously the markets – and the consumer sector in particular – react to developments of that sort.

But what I can say is that we, as a Group, have undertaken very great efforts over the last two years to put ourselves in a good – and, above all, stable – position to face such situations without losing our strategic direction. We have optimised our efficiency, cut costs, restricted investments to the bare essentials – and despite all that, we have successfully completed many projects that are important for us. This was only possible because we have two major strengths that will continue to help us in the future: the enormous commitment of our employees, and our close collaboration with our customers – which is based on trust. We can be proud of these assets: neither of them can be taken for granted, and both of them have to be earned.

2024 was also the year when the plant in St-Prex was closed. What’s your assessment of that event?

Without doubt, the closure of St-Prex was one of the most difficult moments in recent years. It was a very painful decision – not only on account of this plant’s historical significance for Vetropack, but also, and above all, because of the consequences it had for our on-site employees, many of whom had been with us for many years. Experiencing this was very distressing – for everyone involved, including those of us on the Management Board.

Nevertheless, I’m convinced that the decision was the right one: it was impossible to continue operating the site economically. We tried to do so for years, even with major investments – but in the end, even the consultation process showed that it simply wasn’t possible.

That made it all the more important for us to make the process as transparent as possible. We ultimately succeeded in doing this with the social plan we drew up. We assembled a package for the workforce that is fair and good: most of the employees affected by the redundancies have since found new employment, or taken their well-earned retirement.

And what will now happen to the Swiss market and the customers in this country?

Of course, the closure of the last container glass plant in Switzerland also marks a watershed with implications that go beyond our Group. However, we made one thing clear from the outset: even though we’re closing the plant in St-Prex, that does not mean we’re withdrawing from our home market. On the contrary: Switzerland remains an important market for us, and we will continue to supply our customers there exactly as we did before. The same is true of our commitment to glass recycling, which we are maintaining with no changes: we continue to be a key partner for the collection of used glass in particular, and in this way we help to ensure that Switzerland’s recycling rate will keep on increasing.

First and foremost, the closure actually presented a logistical challenge as far as we ourselves were concerned. But in fact, we succeeded in continuing to supply our Swiss customers reliably, as usual, without any restrictions or major interruptions. What made this possible was the collaboration within our Group, which functions excellently across all our locations. Relocation of production from St-Prex to the neighbouring sites in Austria and Italy was accomplished smoothly. This, too, is something that cannot be taken for granted, and it demonstrates the strength and cohesion within the Vetropack Group.

How are the other sites and markets developing?

As I mentioned, we’re seeing the first signs of a modest recovery. And there’s something else that’s at least equally important: we’re seeing that interest in us and our products remains at a high level. This is particularly true of our thermally tempered bottles made of lightweight glass – definitely the greatest innovation in our industry for years, if not decades. It’s being noticed by customers beyond our pilot market of Austria, and it’s being viewed very positively. This is strengthening our position as a technology leader and, in coming years, it will help us to tap new markets and win new customers.

In fact, we even managed to increase our market share slightly in some of our core markets during 2024, despite the difficult market environment. Croatia and also Austria performed particularly well – both of them are markets where we manufacture a large percentage of products for local customers. We’ve also made good progress in terms of modernisation. We were able to put new, efficient furnaces and production lines into operation at our plants in the Czech Republic and also Croatia. So we are well equipped to face the future.

Then let's look ahead: what will the key issues be in 2025?

Generally speaking, what continues to be crucial is that we maintain our focus. Amid all the pressure of day-to-day business, we must not lose sight of our long-term strategic goals. Topics such as innovation and sustainability remain centrally important for us – in production and in product development as well. We will continue to stand firmly by these strategic cornerstones of our development.

The last few years have also shown the importance of flexibility, collaboration, and foresighted planning. The ability to respond rapidly to changing market conditions requires not only a high degree of agility in the organisation, but also the right tools. We are creating the basis for this with our investments in new IT systems – such as a Group-wide Manufacturing Execution System, and integrated planning software. Going forward, this will enable us to plan and produce even more efficiently, and guarantee our ability to deliver.

You’ve just mentioned the topic of Strategy 2030+. A major strategy review is scheduled to take place this year: will the existing priorities stay the same this time? Or does something need to change?

Without wanting to pre-empt the review: our five strategic initiatives will remain in place. However, we will certainly have to make further adjustments to the details. As regards our targets, for example, we may have to focus more on volume rather than sales revenue going forward, so as to offset the potential future impact of fluctuating energy costs.

The topic of sustainability keeps its position unchanged at the top of the agenda, with a focus on climate protection. We are continuing to drive important future projects ahead here: increased use of recycled glass, continuous modernisation of our plants towards emission- and resource-saving production, and the switch to electric forklifts – to name but a few.

A personal question to finish our interview: this is your last year as Vetropack’s CEO. What are your thoughts as you prepare for retirement?

We're not quite there yet – but, of course, this will play an increasingly important part for me personally over the next few months. When the time does come, it’s certainly not going to be easy for me. I work side-by-side with many wonderful people here at Vetropack – people I really appreciate not only as professionals, but also at the personal level. But that’s precisely why my focus during this final year as CEO will also be on doing everything I can to make sure our Group is in the best possible position for the future. This will also include ensuring that there is a smooth transition to – and for – my successor as soon as the Board of Directors has found him or her, as the case may be.