Verallia,Courbevoie

Ladies and gentlemen, welcome to the Viralia 2026 Q1 Results Analyst Call. The call will be structured in two parts. First, a presentation by the Viralia Group Management Team, represented by Patrice Luca, CEO, and Christina Riesgo, CFO. Afterwards, there will be a Q&A session. During this session, you may ask questions in two ways, by submitting a written question in the box below the player or by joining the conference call and dial pound key 5 on your telephone keypad to enter the queue. I will now hand over to the management team. Please go ahead.

Good morning, everyone, and thank you for joining us. Welcome to our Q1 2026 financial results call. I'm pleased to have with me today Christina Riesgo, our new CFO. As usual, we will go through our presentation, and then we have the Q&A session. And after a quick introduction, we will go directly to our numbers with Christina and I will be back with our outlook for 2026. As an introduction, just to remind you, as usual, that Zeralia is a global leader in glass packaging. We are number one in Europe, number two in Latin America, and number three worldwide. On this chart, you have our ID card, you have on the left the 2025 split of our sales by segment. One of our strongest assets is our customer base and the diversified and balanced end market in which we operate. We operate in 12 countries with 35 glass plants and 67 furnaces, serving 11,000 customers and producing about 18 billion bottles and jars a year. Please note also that we are running 19 collect recycling centers, allowing us to control about 50% of our needs for external collect. Before moving to our numbers, I would like to share an update on our industrial adaptation footprint which was announced in mid-February. As a reminder, we decided to adapt and reduce our installed capacity to align with the reality of current demand and to address overcapacity in the European market. Our three projects are progressing as planned and in line with local processes. In Germany, in Essen, the plant was shut down at the end of March. Negotiations regarding the social plan should be concluded in the coming weeks and are expected to involve around 300 terminations. In France, this concerns the closure of one furnace at our Chateau Bernard plant. This furnace has reached the end of its life and will not be rebuilt. In this case, the social process to finalize the voluntary residency plan is underway. The furnace is expected to be shut down by the end of H1. In the UK, the closure of one of the two furnaces that are not only planned is scheduled for the end of the month. Overall, these three projects are progressing as planned, with a full impact expected in H2. I let now, no sorry, before letting the floor to Christina, a quick comment about our financial numbers. So our Q1 numbers are showing a profitability up year on year and marking a first stage in the recovery of their highest performance. Q1 revenue is down by minus 2.4% year over year to 798 million euros. with organic growth at minus 1.2% year over year, with total volume being flat. Q1 adjusted EBITDA is 159 million euros, plus 8.3% versus last year, and with a margin at 19.9%, which is plus 197 bps versus Q1 last year. And about our net debt, our leverage is stable versus stable, last December at 2.7 times. So now I'll let the floor to Cristina for more details.

Thank you, Baptiste. So let's start with looking at the revenue reach based on the numbers that Baptiste just gave. Okay, so revenue came in at 798 million, down 2.4 year-on-year. which is a minus 1.2% organic flow. So looking specifically at volumes, trends in Q1 were overall stable, and they're fully in line actually with our expectations. So volumes were slightly down year on year at 0.4, where we saw growth in food jars and spirits, and that actually offset the declines we experienced in non-alcoholic beverages and sparkling wines. In Europe, the demand is broadly stable. As expected, volumes in Germany are down by double digits, but this is fully aligned with our industrial footprint adaptation. But excluding Germany, European volumes were growing at a low single-digit rate, and this is driven by the momentum in southern and western Europe. And then in Latin America, volumes are overall flat, And we saw low single-digit growth in Brazil, stable volumes in Argentina, and a high single-digit decline in Chile. Spirits actually continue to perform very well and confirm the positive momentum already observed end of last year, basically in Brazil, which is supported by our campo boom for next. And then beer and wine trends remain mixed across the region. Now, if we turn into pricing a mix, the impact was negative by around 60 million, almost 2%, okay, this is what's reflected on the bridge, and is coming from the carryover effect from 25, and some initial prices that we had to negotiate at the beginning of the year in a very different course environment, okay, from what we've seen today. Importantly is that this price mix impact is much less announced than in previous quarters. And actually we are confirming that we are moving into a normalized environment. And finally, foreign exchange had a slight negative impact outside Argentina, and it was mainly related to the UK and Ukraine. And there is no positive, there is no perimeter effect during the quarter. And we turn now to the Ibiza Bridge. What we see is a higher profitability and clearly fueled by a slightly positive spread and net productivity gains. So, I just did a bit that reached 159 million in the quarter, which is up 8.3 compared to Q1 versus last year, which translates into a margin of 19.9. So, almost 200 basis points higher year-on-year. The improvement is driven by three key factors. activity and operating leverage that were broadly neutral and were reflecting stable volumes overall. Second, after two years of a strong negative spread, the price-mix cost spread turned slightly positive in Q1, which is reflecting a normalization effect, right? That helped in particular by lower energy costs following the end of the very expensive 2022 hedges. Third, productivity delivered very strong this quarter, and net productivity reached 2.1% net of cash production costs. And that represents 12 million. And this is actually the result of continued discipline and operational initiatives and performance action plans across the group. And finally, SG&A was very well controlled, and all the teams pushed for reductions that were more than offsetting some one-off items that we saw. And effect was essentially neutral, excluding Argentina. So overall, this confirms that profitability is structurally improving, even in a still challenging commercial environment. So if we look at the net debt evolution and leverage, As of March 31st, 26, net debt stood at 1.9 billion, including 64 million of rights of use assets. So leverage remains stable at 2.7 times over the last 12 months adjusted EBITDA, which it can change by December 2025. So it's important to remark that they increased, I mean, they did increase versus the year end and moved back about the 700 million for the first time in several quarters, right? I would just mention a quick thing that actually net debt increased versus December 2025, but that was driven by normal Q1 seasonality, minority dividends that we paid in the Canary Islands, and then some third value movements on financial instruments, okay? But that doesn't change our leverage positions, which keeps us stable. And then finally, if we move to our financial structure and liquidity, I will just mention a few words. Our financial liquidity remains very strong and has a very good maturity profile, as you can see, with the first maturity in 2028. The value ratio of our debt is actually long dated and a significant portion is on our floating rate exposure to interest rate caps, which actually protects us from a short term market volatility. So our financial structure remains robust and very flexible and resilient, right? Which gives us the confidence visibility to execute our strategy and 2026 objectives.