Constantia Flexibles' 2013 sales up 28.7% year-over-year to €1.69B, driven by sales growth, margin and cost management, improved product mix; acquisitions in Mexico, US, India accounted for 25% of sales, organic growth accounted for 4% of sales
April 28, 2014
Sales including acquisitions on an annualized basis1) increased by 29% as compared to the previous year to EUR 1,691 million. (1,314 million). Of this, 25% came from the companies acquired, organic growth accounted for 4%. The annualized1) operative earnings before interest, taxes, depreciation and amortization (EBITDA) were EUR 240 million. (EUR 188 million), which corresponds to a 28% increase. This results in an EBITDA margin of 14.2%. The EBITDA margin of the core business without acquisitions was increased to 15.3% (14.3%) in 2013. These good results are due to a pleasing sales growth, margin and cost management and an improved product mix by innovations.
Thomas Unger, CEO Constantia Flexibles: ”The acquisitions in Mexico, the US and India last year are milestones in our strategy of globalization. We could achieve significant growth both in sales and in operative earnings. We will continue our path of sustained value increase by profitable growth.”
Markets in Western Europe demonstrated stable development, Eastern Europe recorded significant growth due to consumer behavior approaching Western European standards. North America with a boom in dairy products and especially the regions Asia and Latin America with their growing middle classes also demonstrated growth. With its acquisitions Constantia Flexibles has secured relevant market access and growth potential in some of the fastest growing markets for flexible packaging - India and Mexico.
In this segment, sales increased by 23% in the annual comparison to EUR 1,021.7 million (EUR 834.2 million). 18% came from the acquisitions of Aluprint and Parikh Packaging, 5% was organic due to growth especially in the regions North America and Africa/Middle East. EBITDA grew by 38% to EUR 141.7 million (EUR 102.7 million), which corresponds to a margin of 13.9% (12.3%). The increased earnings were also due to growth in the core business and successful cost management, as well as the first consolidation of the companies acquired, namely Aluprint in Mexico and Parikh Packaging in India.
In 2013, the pharma market continued to grow in the regions North America, Middle East/Africa, and Asia. Business grew especially in the generics sector and due to innovative drug delivery solutions.
Sales in this segment increased by 2% to EUR 275.6 million (EUR 269.1 million). Growth came especially from the regions North America, Middle East/Africa, and Asia/Pacific. The EBITDA grew by 8% to EUR 44.3 million (EUR 41.1 million), which corresponds to a margin of 16.1% (15.3%). Important factors for the earnings increase were an improved product portfolio, reductions in fixed costs, and productivity increases.
In the labels segment the business year 2013 was characterized by a strategic realignment and efficiency increases, supported by the acquisitions Spear and Grafo Regia. With this a global top position, especially in the growth market for pressure- sensitive labels could be achieved. Constantia Flexibles now is the global market leader for beer labels. Sales in 2013 in the Labels segment were slowed by the cooler weather in important markets, which impacted sales in the soft-drink and brewing industries.
In this segment sales increased by 45%, to EUR 409.7 million (EUR 282.2 million), the growth was due largely to the acquisitions. The EBITDA grew by 17% to EUR 68.4 million (EUR 58.5 million), which corresponds to a margin of 16.7% (20.7%). The increased earnings were due to an improved product mix mainly thanks to in-mould labels and productivity improvements. In addition the acquisitions of Grafo Regia and Spear contributed to the earnings increase.
Outlook for 2014
The past year constitutes a solid basis for further successful business. In 2014, the focus lies on an increased market presence in the growth regions as well as the continued integration of the Group, especially the further efficiency and earnings improvement of the acquired companies. The good start into the business year 2014 shows that the profitable growth course will be continued.
Constantia Flexibles is one of the leading companies for flexible packaging and labels; it supplies international customers in the food, pet food, pharma, and beverage industries. Over 8,000 employees at almost 80 Group companies in more than 20 countries supply innovative solutions on a global level.
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