Annual Report 2018
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The casing company Annual Report 2018 Key performance indicators Shareholders Market Proposed Remuneration Revenue Capitalization per Share €2,242.6 €1.73 €786.0 Mn €1.55 in 2017 Mn €2,563.7 Mn in 2017 €778.1 Mn in 2017 -12.5% +11.6% +1.0% EBITDA EBITDA Net Margin Profit €208.8 26.6% €123.7 Mn Mn €211.2 Mn in 2017 27.1% in 2017 €122.0 Mn in 2017 -1.2% -0.5 p.p. +1.4% CAPEX Net Bank Debt Share price CAGR €71.6 €79.6 Mn Mn €107.2 Mn in 2017 €41.1 Mn in 2017 13.1% 10 years -33.2% +93.6% Society CO / Investment in 2 Environment, km produced Subproduct Health and Safety Base 2015 valorization €5.7 97 48% 95 in 2017 56% in 2017 Mn €7.5 Mn in 2017 Waste and Water consumption / Internal energy by-product Casings produced consumption Base 2015 53.4 2,276 Thousand tonnes 106 GWh 97 in 2017 46.5 in 2017 2,158 in 2017 CO2 avoided due to energy optimization 91,715 tonnes Market Estimated market Countries with Casings market share in the gut and commercial growth casings market presence in 2018 17% > 100 +2% Countries with Casings portfolio: productive Cellulose, collagen, footprint fibrous and plastics 13 >12,000 Sold references Employees Average workforce Training hours Women’s workforce participation 4,641 115,162 29% 4,554 in 2017 136,800 in 2017 28.8% in 2017 Training Health and Safety Lost working time / Total investment training working hours €2.2 28,366 0.38% Mn hours 0.37% in 2017 €2.4 Mn in 2017 29,530 in 2017 PRODUCTIVE AND COMMERCIAL FOOTPRINT CONVERTING Suzhou (CN) Ceske Budejovice (CZ) Itu (BR) San Luis de Potosí (MX) Cellulose Montgomery (US) Urdiáin (ES) Cáseda (ES) EXTRUSION Cáseda (ES) Danville (US) Zacapu (MX) Matarazzo (BR) r C CONVERTING Hasselt CANADA Kentland (US) USA San Luis de Potosí (MX) Itu (BR) Ceske Budejovice (CZ) MEXICO Alfhausen (DE) COSTA RICA Montreal (CA) BRAZIL Sidney (AU) Wellington (NZ) URUGUAY Cáseda (ES) San Luis de Potosí (MX) Plastic Itu (BR) Ceske Budejovice (CZ) Hasselt (BE) Kentland (US) EXTRUSION EXTRUSION Suzhou (CN) Novi Sad (RS) Weinheim (DE) Collagen Pando (UY) Cáseda (ES) CONVERTING Cáseda (ES) Itu (BR) Ceske Budejovice (CZ) Suzhou (CN) r C HasseltUK RUSSIA BELGIUM Headquarters GERMANY Tajonar (ES) FRANCE CZECH REPUBLIC SERBIA SPAIN Representative CHINA offices & Commercial companies Courcouronnes (FR) THAILAND San José (CR) Bangkok (TH) AUSTRALIA Moscow (RU) Sevenoaks (GB) NEW ZEALAND Sidney (AU) Ceske Budejovice (CZ) Montgomery (US) Itu (BR) CONVERTING Cáseda (ES) Danville (US) EXTRUSION Fibrous Audit and verification reports Consolidated annual accounts index Management report VISCOFAN, S.A. AND SUBSIDIARIES Audit Report, Consolidated Financial Statements and Consolidated Management Report at 31 December 31 2018 Audit report on the consolidated annual accounts issued by an independent auditor To the shareholders of Viscofan, S.A. Report on the consolidated annual accounts Opinion We have audited the consolidated annual accounts of Viscofan, S.A. (parent company) and subsidiaries (the Group), consisting of the statement of financial position at 31 December 2018, the income statement, the statement of comprehensive income, the statement of changes in equity, the cash flow statement, all of the foregoing on a consolidated basis, and the notes to the consolidated annual accounts for the year then ended. In our opinion, the accompanying consolidated annual accounts present fairly, in all material respects, the Group's consolidated equity and financial position at 31 December 2018 and the consolidated results of its operations and consolidated cash flows for the year then ended in accordance with the International Financial Reporting Standards adopted by the European Union (IFRS-EU) and other provisions of the financial reporting framework applicable in Spain. Basis for opinion Our audit has been carried out in accordance with prevailing Spanish auditing regulations. Our responsibilities under said regulations are described below under Responsibilities of the auditor in relation to the audit of the consolidated annual accounts. We are independent of the Group in accordance with the ethical requirements, including those relating to independence, applicable to our audit of the consolidated annual accounts in Spain, as required by auditing regulations. In this respect, we have not provided any services other than audit services, nor have any situations or circumstances arisen that, in accordance with those regulations, might have undermined said independence. We consider that the audit evidence obtained provides a sufficient and appropriate basis for our opinion. Key audit matters Key audit matters are those that, in our professional judgment, were of most significance in the audit of the consolidated annual accounts for the current period. These matters have been addressed in the context of our audit of the consolidated annual accounts as a whole and in the preparation of our opinion thereon, and we do not express a separate opinion on these matters. ' PricewaterhouseCoopers Auditores, S.L., Parque Tomás Caballero, 2, 6a planta, 31006 Pamplona, Spain Tel.: +34 948 213 157/ +34 902 021111, Fax: +34 948 228 770, www.pwc.es l Madrid Companies Register, page 87,250-1, folio 75, volume 9,267, book 8,054, 3rd section Entered in the Official Registry of Accounting Auditors under number S0242 - Company Tax ID No.: B-79 031290 Viscofan, S.A. and subsidiaries Key aspects of the audit Way in which they have been addressed in the audit Revenue recognition The most significant item in the Group’s Our audit procedures have included validating the efficiency income statement is sales (note 5.1 to the of the controls over the sales process and verification accompanying consolidated annual procedures such as: accounts). • Verifying the design and implementation and operational This item is a key indicator of the Group’s efficiency of the relevant controls that support the integrity of business. sales, including identifying the manual and automatic controls of the information systems throughout the process used to create orders, generate delivery notes and invoice The Group’s revenues include a multitude sales. of transactions and relate mainly to sales of artificial wrappings for cold meats and, to a lesser extent, sales of electricity produced through co-generation systems • Evaluating the adequacy of the revenue recognition criteria, (Note 1 to the accompanying annual taking into account the contract terms and obligations, accounts). reviewing customer orders. Proper control of these operations is • Performing detailed tests on verifying, for a sample, the essential to ensure that sales are appropriate recognition of transactions through third-party recognised accordingly, and, therefore is supporting documentation. a key aspect in our audit. • Selecting and verifying, if appropriate, the entries recorded in revenue that we considered could give rise to unusual or irregular items. • Obtaining confirmation of the year-end balances for a sample of customers. • Verifying that sales have been recognised in the correct period based on established terms and conditions. • Assessing the reasonableness of fluctuations in sales and margins for 2018 compared with trends in the previous year. As a result of our tests, we have no relevant observations to make regarding this matter. Viscofan, S.A. and subsidiaries Other information: Consolidated management report Other information refers exclusively to the consolidated Management Report for 2018, the preparation of which is the responsibility of the parent company’s directors, and which does not form an integral part of the consolidated annual accounts. Our audit opinion on the consolidated annual accounts does not cover the consolidated management report. Our responsibility for the information contained in the consolidated management report is defined in auditing regulations that distinguish two levels of responsibility: a) A specific level applicable to the non-financial information statement, as well as certain information included in the Corporate Governance Report, as defined in article 35.2 b) of Law 22/2015 on auditing, which solely requires that we verify whether said information has been included in the management report or where applicable, that the management report includes the corresponding reference to the separate non-financial report as stipulated by prevailing regulations and if not, disclose this fact. b) A general level applicable to other information included in the consolidated management report that consists of assessing and reporting on the consistency of that information with the consolidated annual accounts, on the basis of the understanding of the Group that we have obtained in the performance of the audit of those accounts, not including other information not obtained as evidence during the course of the audit and assessing and reporting on whether the content and presentation of that part of the consolidated management report are in conformity with applicable legislation. If, based on the work we have performed, we conclude that there are material misstatements, we are required to report this fact. Based on the work performed, as described above, we have verified that the information referred to in paragraph a) above is provided in the consolidated management report, and that the remaining information contained therein is consistent with that provided in the 2018 consolidated annual accounts and its content and presentation are in conformity with applicable regulations. Directors’ and Audit Committee's Responsibility in relation to the