According to preliminary results, sales in 2015 increased by 9.4% year-on-year to €1.89 billion. Sales adjusted for the effects from exchange rate fluctuations grew by 5.8% 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.
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% of Group sales in 2015, with no customer representing more than 5.6% of the total sales.
“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 Alexander Baumgartner, CEO of Constantia Flexibles. “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.”
Operating profit before interest, tax, depreciation and amortization (EBITDA) before special items was €263 million, an increase of 3% compared to the previous year. As a result, EBITDA margin was 13.9% compared to 14.7% a year earlier.
Throughout the Group, various cost reduction and efficiency programs were initiated or intensified. Yet, the margin was below the previous year’s level due to a change in the product mix (above-average growth in the Food division), increased competitive pressure in individual niche markets, as well as additional costs for the ramp-up of new projects as part of the company’s growth strategy.
The number of employees (full time equivalent FTEs) increased by roughly 25% year-on-year to 10,086 at the end of December 2015, driven above all by the acquisitions of Afripack and Pemara.
Food division sales increased by 7.5% year-on-year to €1.1 billion in 2015. Adjusted for currency effects, sales increased by 4.7%. The growth in terms of key account customers in Europe was particularly pleasing.
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, in which the Food division offers customers innovative system solutions for modern household machines, also contributed to the sales increase.
In the markets of North America and the emerging markets, there was a significant increases in sales in the field of snack packaging, in particular through the production plants in India and Mexico.
In 2015, Pharma division sales rose by 7.9% year-on-year to €296 million. Adjusted for currency effects, sales increased by 7.1%.
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.
In 2015, sales in the Labels division rose by 11.7% year-on-year to €541 million. Adjusted for currency effects, sales increased by 5.5%. The major growth markets of the division were North and South America, Africa and Asia/Pacific, with double-digit growth rates. Sales in Europe remained stable.
Once again, innovation was the key growth driver in product markets. The new developments in recent years, such as recycling-friendly self-adhesive labels, haptically enhanced self-adhesive labels and various in-mold labels, contributed significantly to the strong growth.
The global economic environment remains challenging. However, Constantia Flexibles judges its prospects positively for 2016 after a promising start to the year. Sales and operative EBITDA are both 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.
Sales will continue to be driven by leveraging the company’s strong relationship with key customers and promoting in-house innovation based on our expertise in foil- and film-based products, as well as in-mold and pressure-sensitive labels.