Frigoglass – Q1:2016 – Results

Frigoglass (Q1:16 Results): Sales declined by 15.1% to €101.9 million, mainly driven by a double digit sales decline in Eastern Europe and lower demand for glass containers in Nigeria. In Western Europe, sales grew by 24.3%, reflecting ICOOL’s placements by Coca-Cola bottlers in the region. Sales in Africa increased by 24.9%, compared to a weak prior year quarter, while intense competition impacted Asian business sales in the quarter. In the Glass business, sales declined by 24% as the difficult macroeconomic environment continued to adversely affect demand for glass containers in Nigeria.

Gross profit (excluding depreciation) decreased by 5.8%, to €21.6 million, with the respective margin improving by 210 basis points year-on-year to 21.2%. The margin improvement also reflects a favorable geographic mix driven by the sales increase in Western Europe, more than offsetting volume led underabsorption of production overhead costs and the adverse impact from the devaluation of South Africa’s Rand. Operating expenses (excluding depreciation) declined by 4%, to €11.5m, reflecting cost containment initiatives.

In the first quarter, EBITDA declined by 10.6% to €10.7 million. Despite that, EBITDA margin increased by 50 basis points year-on-year to 10.5%. Glass business operating performance was the main driver of the EBITDA margin improvement. Depreciation decreased by 6.5% to €8.2 million mainly due to lower investments in Glass Operations.

Lower EBITDA resulted in an Operating Profit (EBIT) of €2.5 million, compared to an EBIT of €3.2 million last year. Net finance cost was €9.5 million in the quarter, compared to €3.1 million in 1Q15. The increase mainly reflects a low base last year as we benefited exceptionally from foreign exchange gains. Net finance cost was impacted by higher average short-term borrowings and a higher effective interest costs. Frigoglass reported net losses of €8.3 million in the quarter, compared to losses of €3.9 million in the first quarter of 2015.

Net debt at the end of the quarter reached €308.8 million, compared to €287.8 million last year. The 12-months (LTM) Free Cash Flow generation was more than offset by interest paid and adverse foreign currency movements, resulting in higher net debt. In 1Q16, capital expenditures amounted to €2.8 million, compared to €7.6 million the first quarter of 2015.



FRIGOGLASS 2015 2016 Y-o-Y
EUR thous. Q1 Q1 (%)
Sales 120,005 101,899 -15.1%
EBITDA 11,968 10,699 -10.6%
EBITDA Mrg 10.0%  10.5%  +53 bps 
Net Income -3,868 -8,344 -115.7%
Net Mrg -3.2%  -8.2%  -497 bps