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Investing.com -- Shares of Verallia (EPA:VRLA) ticked up by 1% after the company reported first quarter results that were in line with sales expectations but fell short on adjusted EBITDA by approximately 21%. The glass packaging manufacturer also revised its FY25 guidance, lowering its adjusted EBITDA forecast while raising its free cash flow (FCF) projections.
In a challenging market environment characterized by subdued European consumption and rising geopolitical and trade tensions, Verallia adjusted its EBITDA outlook to around €800 million, a figure roughly 5% below the Bloomberg consensus estimate of €842.7 million. However, the company anticipates its FCF to exceed €200 million, an improvement on previous expectations.
Despite the EBITDA shortfall, Bernstein analysts commented on the situation, noting, "While the performance was in line with estimates at the sales level, the miss at the adjusted EBITDA level is significant and likely driven by more pronounced headwinds from price/mix and other items, such as Argentina.
The implied consensus earnings cut is manageable, at c.5%, while the FCF guidance increase provides some cushion as well. Overall, we believe that the overall impact on the stock price should be limited due to the combination of i) the pending offer from BWGI, and ii) the better FCF guidance."
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