Verallia: Significant Margin Improvement Despite Decline in Q1 Revenue
Verallia has released its Q1 2026 results, marked by a contrast between improved operational profitability and weak revenue. Adjusted EBITDA increased by 8% to €159M with a margin of 19.9%, while revenue fell by 2.4% to €798M, primarily reflecting a decrease in selling prices.
Financial Performance Details
The packaging glass manufacturer reported an adjusted EBITDA of €159M in Q1 2026, up 8% from €147M in Q1 2025. This improvement translates into an adjusted EBITDA margin of 19.9%, an increase of 197 basis points. Revenue, however, was €798M, down 2.4% as reported and 1.2% on a constant currency and scope basis (or 2.0% excluding Argentina). This contraction is mainly due to a decrease in selling prices, while volumes remain broadly stable over the quarter and have increased in most countries, despite a decline in Germany. By segment, spirits confirm a recovery that began in 2025, and food jars maintain a solid contribution. Non-alcoholic beverages and sparkling wines, however, have declined. In Southern and Western Europe, volumes are growing with positive dynamics in beer and food jars, supported particularly by the new facility in Pescia, Italy. In Latin America, volumes remain stable, with strong dynamics in spirits offsetting declines in beer and wine.
Drivers of Margin Improvement
The margin improvement stems from several internal levers. The inflation spread turned slightly positive in the first quarter after several quarters of unfavorable pressure, mainly reflecting the decrease in energy costs due to the end of the impact of the 2022 hedges contracted in a tight market. The Group benefits from high energy coverage, with over 80% of its energy needs covered for the year. The Performance Improvement Plan (PIP) generates solid results, producing a net reduction in cash production costs of 2.1%, exceeding the internal target set at 2.0%, amounting to €12M. The positive contribution from operations amounts to €1M thanks to the overall good volume dynamics, although mitigated by production stops in Germany. Volumes have slightly improved compared to Q1 2025, partly offsetting the negative effect of the price decrease.
2026 Objectives Confirmed Despite Economic Downturn
Verallia confirms its targets for 2026 despite a deteriorating economic environment. The Group aims for an adjusted EBITDA of approximately €700M and a free cash flow of about €220M, the latter calculated excluding the impact of disbursements related to the restructuring measures of the industrial footprint adaptation project. Liquidity remains robust at €856M as of March 31, 2026, with the debt ratio standing at 2.7x the adjusted EBITDA of the last 12 months, stable compared to the end of December 2025. However, on March 13, Standard & Poor's downgraded the Group's long-term credit rating from BBB- to BB+ with a stable outlook, due to market slowdown. Verallia stated it remains focused on improving its competitiveness, generating cash, and reducing debt to regain Investment Grade status. The Group remains vigilant in a context of increased uncertainties related to the conflict in the Middle East and persistently sluggish consumption.
