Letter from the Chairman

2021 ANNUAL REPORT

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Dear Shareholder,

 

For Vidrala, 2021 was a year full of external challenges that confirmed the consistency of our business structure resulting from our previous strategic actions.

 

We made progress, properly assimilating the strategy and serving our clients efficiently, despite the many difficulties of the context. This was evidenced in higher production and revenue figures, supported by solid levels of operating efficiency, reaping the benefits of managing a more simplified industrial perimeter after the divestments at the end of 2019. Thus, sales grew by more than 9%, exceeding EUR 1,084 million. Despite results being negatively affected by growing inflationary pressures, Vidrala generated more cash than the previous year, which was reflected in a 50% debt reduction versus 2020.

 

With regards to 2022, it is probably going to be another complex year. As we have all experienced, the cost of manufacturing has risen abnormally in recent months, particularly in the energy field. Consequently, Vidrala needs to implement substantial price increases during 2021, primarily to address this cost inflation and the resulting unsustainable pressure on margins. We will continue to execute a tight cost control and adapt pricing where necessary in order to protect our profitability over the coming months.

 

Looking ahead, despite the current turbulent times, our product has a brighter future than ever. Demand is growing steadily, driven by a strong commitment to glass as the ultimate sustainable packaging by brand owners, packers and consumers. Therefore, we will invest to grow and improve our levels of competitiveness, with our future and our customers in mind, expanding our production capacity and diversifying our business with the aim of manufacturing glass containers and supplying our packaging services in the most sustainable and profitable way. And we will do so, guaranteeing a strict financial discipline.

 

Vidrala’s financial position remains solid and our cash flow generating potential over the medium to long term is robust. In recognition of this, we are proposed a dividend that represents a 5% increase compared to 2020. At the same time, we will intensify the share repurchases that will be subsequently amortised for the benefit of the shareholders.

 

To finish, I would like to thank you for your trust in Vidrala.

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Carlos Delclaux

Chairman, Vidrala

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Choose glass, choose Vidrala