Verallia H1 2025 slides: Profitability rebounds in Q2 amid challenging market

Introduction & Market Context

Verallia (EPA:VRLA), a global leader in glass packaging, reported its H1 2025 financial results on July 30, 2025, showing signs of recovery in the second quarter despite overall challenging market conditions. The company, which maintains its position as the number one glass packaging producer in Europe and number two in Latin America, faced continued pricing pressure in the first half but demonstrated resilience through improved volume growth and stronger cash generation.

As shown in the following overview of Verallia’s global market position, the company maintains a diversified customer base across multiple beverage and food segments:

H1 2025 Financial Performance

Verallia reported H1 2025 revenue of €1,723 million, down 2.4% year-over-year, with organic growth declining by 3.3%. Despite the revenue decrease, the company highlighted a rebound in profitability during Q2, with adjusted EBITDA margin improving to 22.5% compared to just 18.0% in Q1 2025, representing a significant sequential improvement of 457 basis points.

The following chart provides a comprehensive overview of Verallia’s H1 2025 financial performance:

The company’s H1 2025 adjusted EBITDA reached €351 million, representing an 18.7% decrease compared to H1 2024, with margin contracting to 20.4% from 24.4% in the prior year period. Net income fell by 45.0% to €68 million, resulting in earnings per share of €0.57 (€0.76 excluding PPA).

A detailed analysis of H1 2025 revenue variance shows that positive volume contribution (+€43.6m) was more than offset by negative price/mix impact (-€110.9m), exchange rate effects (-€13.4m), and perimeter changes (-€50.5m):

Similarly, the adjusted EBITDA bridge illustrates how positive contributions from activity (+€34.2m) and net productivity (+€13.4m) were overwhelmed by the negative spread between price-mix and costs (-€142.6m):

Regional Performance

Verallia’s performance varied significantly across regions. Southern and Western Europe (SWE) reported relatively stable revenue (-0.3% to €1,182m) supported by the Corsico contribution, though organic revenue at constant exchange rates declined by 4.5%. The region’s adjusted EBITDA margin contracted by 375 basis points to 20.6%.

Northern and Eastern Europe (NEE) faced the most significant challenges, with revenue declining by 6.4% to €357m and adjusted EBITDA margin falling sharply by 646 basis points to 13.6%. The company cited pricing pressure and capacity underutilization, particularly in Germany and the UK, as key factors.

Latin America (LATAM) demonstrated strong operational performance with 11.2% revenue growth at constant exchange rates and scope, though reported revenue declined by 7.3% to €184m due to currency devaluation, particularly affecting the Brazilian real and Argentine peso. Despite currency headwinds, the region maintained robust profitability with a 32.2% adjusted EBITDA margin.

Strategic Initiatives

Despite market headwinds, Verallia continued to advance its strategic initiatives, particularly in capacity expansion and decarbonation efforts. The company highlighted the successful launch of new furnaces in Campo Bom, Brazil (adding 330 tons of daily capacity) and Pescia, Italy (adding 300 tons of daily capacity).

A significant milestone in Verallia’s decarbonation strategy is the development of its first hybrid furnace in Zaragoza, Spain, scheduled to open in Q3 2025. This innovative furnace can replace up to 70% of fossil energy with electric energy, potentially reducing CO2 emissions by up to 55% compared to traditional furnaces:

The company also expanded its lightweight glass packaging solutions with the introduction of "My Air," an ultralight 105g bottle targeting the single-serve market for ready-to-drink beverages, non-alcoholic beverages, and still wines.

Cash Flow and Debt Position

Despite lower EBITDA, Verallia demonstrated strong cash flow management in H1 2025. Free cash flow improved significantly to €66.2 million, compared to -€49.2 million in H1 2024, representing a €115 million year-over-year improvement. This was primarily driven by lower capital expenditures and improved working capital management:

Capital expenditures were well-controlled, decreasing to 8.6% of sales in H1 2025 compared to 12.2% in H1 2024, with both strategic and recurring capex declining due to a lighter furnace repair schedule:

The company’s net debt increased to €1,947.5 million as of June 30, 2025, compared to €1,797.4 million at the end of 2024, resulting in a leverage ratio of 2.6x LTM adjusted EBITDA (up from 2.1x at year-end 2024). The increase in leverage was partly attributed to the €202 million dividend payment made in May 2025:

Outlook & Guidance

Despite the challenging first half, Verallia confirmed its full-year 2025 guidance, assuming no further deterioration in the geopolitical and macroeconomic environment. The company expects:

This guidance aligns with the adjusted EBITDA target of approximately €800 million that was previously communicated in the Q1 2025 earnings call, suggesting management remains confident in the company’s ability to navigate the current market challenges.

Corporate Ownership Changes

A significant development for Verallia is BWGI’s successful tender offer, which resulted in BWGI owning 70.31% of Verallia’s share capital and 62.81% of its voting rights as of July 28, 2025. The offer will be reopened from July 31 to August 13, 2025, at the same price of €28.30 per share. Verallia emphasized that it will continue rolling out its strategic roadmap following this change in ownership structure.

This tender offer appears to have had minimal impact on Verallia’s stock price, which closed at €28.30 on July 30, 2025, according to the provided fundamentals data.

In conclusion, while Verallia faces continued market challenges, particularly in Europe, the company’s Q2 rebound in profitability, strong cash flow generation, and ongoing strategic investments suggest management is effectively navigating the uncertain environment while positioning the company for long-term growth and sustainability.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.