Board of
Directors' Report

Dear shareholders,

Like many other businesses, the Swiss-based Vetropack Group was also impacted by the global COVID-19 pandemic in the first half of the year under review. Net sales came to CHF 323.8 million, down 10.4% on the same period last year (2019: CHF 361.2 million). Adjusted for currency effects, however, this decrease only amounted to 5.6%. EBIT fell by 14.8% to CHF 40.9 million (2019: CHF 48.0 million*). Consolidated operating profit remained virtually the same as last year, while reported profit rose to CHF 46.3 million (2019: CHF 37.9 million*) thanks to the sale of a property not required for operations.

Johann Reiter, CEO (left) and Claude R. Cornaz, Chairman of the Board of Directors (right)

The COVID-19 pandemic has hit the European container glass industry hard: not only were restaurants and other catering outlets closed for months on end, but the concept of “social distancing” has also changed consumer behaviour. Lockdown led to a build-up of stock and put the brakes on output, with some production lines even being shut down temporarily.

Swift action

Vetropack Group responded quickly and effectively to this sudden crisis. Measures to protect staff were coordinated across the Group and implemented locally. Efforts were also made to guarantee the supply of raw materials and the delivery of glass containers. Thanks to the Vetropack network, with eight production facilities and a committed workforce, we were able to keep the production process going safely and without any interruptions.

Unit sales, net sales and production

In the first half of the year, Vetropack Group sold 2.35 billion units of glass packaging, 9.3% fewer than last year (2019: 2.59 billion units). Consolidated net sales from goods and services were down by 10.4% at CHF 323.8 million (2019: CHF 361.2 million). After adjusting for currency effects, however, this only amounted to a 5.6% reduction. Since this drop in sales mainly affected lower-priced products such as glass bottles for beer, mineral water and soft drinks, the average price of the glass packaging sold actually increased. With capacity being actively reduced, Vetropack Group produced 725,000 tonnes in the first half of the year (2019: 730,000 tonnes). The effects of COVID-19 pushed stock levels up to CHF 16.1 million during this period.

Performance maintained

Vetropack Group responded quickly and effectively to the COVID-19 pandemic and introduced stringent cost control measures. This, along with lower energy prices, meant that savings could be made across all areas. For example, accrued staff overtime and untaken leave were reduced and delivery costs were optimised. Thanks to these extensive measures, Vetropack Group achieved a consolidated EBIT of CHF 40.9 million (2019: CHF 48.0 million*). The EBIT margin stood at 12.6% (2019: 13.3%).

Cash flow came to CHF 75.5 million (2019: CHF 81.6 million*), while the cash flow margin amounted to 23.3% of net sales (2019: 22.6%).

The consolidated semi-annual profit of CHF 46.3 million (2019: CHF 37.9 million*) was up 22.2% on the previous year’s figure. The profit margin amounted to 14.3% (2019: 10.5%). A property in the Swiss canton of Zurich that was not required for operations was sold in the first half of 2020, generating one-off proceeds before tax of CHF 11.7 million.

Vetropack Group employed a workforce of 3,414 people during the period under review (2019: 3,346).

Balance sheet remains strong

Total assets as at 30 June 2020 amounted to CHF 945.7 million (31 December 2019: CHF 949.2 million*). In spite of the significant build-up of stock, the level of liquid funds was successfully maintained thanks to targeted cost optimisation measures and reduced capital expenditure. Short-term assets climbed to CHF 389.7 million (31 December 2019: CHF 365.0 million), while long-term assets fell to CHF 556.0 million (31 December 2019: CHF 584.2 million) due to investments being limited to those that were absolutely essential in the first half of the year. Liabilities remained virtually unchanged at CHF 202.1 million (31 December 2019: CHF 200.8 million). Shareholder’s equity came to CHF 743.6 million (31 December 2019: CHF 748.4* million), 78.6% of total assets.


Investments in the first half of the year focused on making preparations for the new, larger furnace at Vetropack’s Croatian glassworks, along with all the necessary equipment, as well as the new glassworks due to be set up in the Italian town of Boffalora. Vetropack Group invested a total of CHF 35.8 million in the first six months of the year (2019: CHF 47.3 million).

Outlook for the second half of 2020

Owing to the pandemic and the continued uncertainty surrounding its impact on the economy as a whole and on demand for glass packaging in particular, it is difficult to predict the outlook for the coming months. As things stand, and taking the reopening of restaurants and catering outlets into account, we expect Vetropack Group’s sales volumes to increase slightly in the second half of the year compared to the first six months. Production capacity will be actively reduced further in the second half of 2020 to bring the high stock levels down, which will impair production efficiency. This will have an adverse impact on performance in the second half of the year. We are therefore expecting the operating profit margin for 2020 as a whole to fall slightly short of last year.

Claude R. Cornaz

Chairman of the Board of Directors

Johann Reiter



Bülach, 25 August 2020

* Effluent volumes at the Austrian production plant in Kremsmünster were recorded incorrectly between 2010 and 2019, meaning that the sewerage fees charged to the plant were too low. An adjustment charge of CHF 3.8 million net is therefore being applied in 2020. In the interests of comparability and transparency, the figures for 2019 have been restated (see also Notes, 3. Adjustment of figures for the previous year).

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