Constantia Flexibles increases sales and earnings in 2015

Constantia Flexibles has reported sales in 2015 up 9.4 percent year-on-year to 1.89 billion EUR (2.2 billion USD) as the company furthered its global growth strategy through a number of important developments and acquisitions across the year.

The opeing of a new competence center for films was just one development at Constantia Flexibles in 2015

The strong sales growth resulted from all business divisions and was achieved primarily by strong volume increases in all regions. The company’s top 10 customers represented 31.5 percent of group sales in 2015, with no customer representing more than 5.6 percent of total sales. Sales adjusted for the effects from exchange rate fluctuations grew by 5.8 percent compared to the previous year. The strong appreciation of the US dollar against the Euro was the main factor influencing all divisions in the group.

Last year saw Constantia Flexibles make a number of advances in pursuit of global growth, including the completion of its takeover by Wendel, the appointment of Alexander Baumgartner as CEO, the group's acquisition of Pemara, the opening of a new competence center for films, the development of a tamper-evident opening system for packages containing medical devices, and the delivery of innovative packaging products such as flag labels for brewery Goose Island and multi-sensopry labels for Oculto.

Sales in the Labels division rose by 11.7 percent year-on-year to 541 million EUR (615 million USD), adjusted for currency effects to 5.5 percent. The major growth markets of the division were North and South America, Africa and the Asia-Pacific region, with double-digit growth rates. Sales in Europe remained stable. New product developments, such as recyclable self-adhesive labels, haptically enhanced self-adhesive labels and various in-mold labels, contributed significantly to the strong growth.

Food division sales increased by 7.5 percent year-on-year to 1.1 billion EUR (1.3 billion USD) in 2015, or 4.7 percent when adjusted for currency effects, with the growth in terms of key account customers in Europe described as ‘particularly pleasing’ by the company. There was a further increase in sales of aluminum foil containers for pet food and dairy product packaging in Eastern and Western Europe, while sales of convenience food packaging and foils for confectionery remained stable compared to 2014. The growth of portion packs, especially for coffee and tea, also contributed to the sales increase. In North America and emerging markets, there was a significant increase in sales in the field of snack packaging, in particular through the production plants in India and Mexico.

Pharma division sales rose by 7.9 percent year-on-year to 296 million EUR (336 million USD), adjusted to 7.1 percent. The three product groups, coldform, sachet and blister, were responsible for the growth, with double-digit growth achieved in the first two product groups. This increase resulted from rising demand for high-density packaging materials, in order to protect highly sensitive pharmaceuticals on the way to the patient. The remaining product groups also ended the 2015 financial year with stable growth. In 2015, Constantia Flexibles was able to achieve a high, above market average sales growth in Western Europe and America. In addition, sales in one of the key regions, Middle East Asia, were increased by a high double-digit percentage. In Eastern Europe, there was a slight decline in sales.

Group operating profit before interest, tax, depreciation and amortization (EBITDA) before special items was 263 million EUR (299 million USD), an increase of three percent compared to the previous year. As a result, EBITDA margin was 13.9 percent compared to 14.7 percent a year earlier. Throughout the group, various cost reduction and efficiency programs were initiated or intensified. The margin was below the previous year’s level due to a change in the product mix, such as above-average growth in the Food division, increased competitive pressure in individual niche markets and additional costs for the ramp-up of new projects as part of the company’s growth strategy.

‘On behalf of the board of management, I would like to thank our dedicated employees for achieving another sales and operating earnings increase in 2015 – our sixth year in succession,’ said Baumgartner. ‘We will proceed with our integration of the recent acquisitions Afripack in Africa and Pemara in Southeast Asia and will look for further opportunities as part of our ongoing global expansion strategy.’

Constantia Flexibles said it judges its prospects positively for 2016 after a promising start to the year, despite the global economic environment remaining challenging. Sales are again expected to grow year-on-year, with the focus moving towards more profitability and cash generation. A better quality of earnings is targeted through cost competiveness, while ongoing operational excellence activities to improve production processes will further improve efficiency, the company said in a statement detailing its outlook for the current year. Sales will continue to be driven by leveraging strong relationship with key customers and promoting in-house innovation based on expertise in foil- and film-based products, as well as in-mold and pressure-sensitive labels.

*Currency conversions correct as of March 31, 2016 via xe.com/ucc