Company presentation
May 2020 Group Structure
FREE FLOAT Zignago Holding S.p.A. on the (MARZOTTO FAMILY) ITALIAN STOCK EXCHANGE
100% 65% 35% Santa Margherita
Wine producer Zignago Vetro 2018 ZV Group consolidated 230,1 Mln € 420,5 mln €
Zignago Power 100% 51% Vetro Revet Biomass electricity producer 100% 50% 100% 100% 7,3 mln € (*)
Zignago Vetro Brosse Vetri Speciali Zignago Vetro Polska 56,9 mln € 186,3 mln € (*) 49,4 mln € 30% Vetreco 10% 15,5 mln € (*) Hugo Boss
Fashion apparel
Zignago Glass USA 50% Julia Vitrum 0,6 mln € (start up phase)
Others *100% of turnover
Note: in 1H19 Verreries Brosse has been renamed as Zignago Vetro Brosse and Huta Szkła Czechy as Zignago Vetro Polska 2 Milestones
Portogruaro plant: Acquisition of specialty containers production Acquisition of Vetro Revet: Vetreco: cullet recycling F&B + C&P plants, then merged into Vetri Speciali cullet recycling
1979 1987 1994 1995 2002 2004 2007 2011 2013 2017 2019
Acquisition of Empoli Acquisition of VB in Listing on the Italian Stock Acquisition of HSC in Julia Vitrum (start up): plant: F&B France: luxury perfumery Exchange Poland: C&P + F&B cullet recycling
A proven track record of successful acquisitions in and outside Italy across different Glass sectors 3 Presence in Selected Business Segments
2019 (€m) Market Segment Products Main Features Competitive Strengths
Flexibility, efficiency and Food & technical know-how key for Beverage Zignago Vetro success Flexibility Sales € 230.1m Quality Focus on selected segments Cosmetics & of food & beverage and Perfumery cosmetics & perfumery
Extraordinary high-quality, tailor- Quality Zignago Vetro Brosse Luxury made product offering and efficiency Sales € 56.9m Perfumery Innovation Focus on high-end perfumery market
Zignago Vetro Polska Wide range of personalised Food & products for niches of the global Personalization Sales € 49.4m Beverage market of glass containers for Cosmetics & cosmetics and perfumery, and for Small-run production food and beverages Perf. Highly customized specialty glass Vetri Speciali Personalization Specialty containers produced in very short Sales € 186,3m Containers runs with strong focus on efficiency Small-run production
Cullet Forefront technology to reprocess Vetreco Located in a strategic Sales €15,5m cullet to the highest standards of Recycling areas with strong color separation to yield the best potential to grow Vetro Revet quality of finished cullet Sales €7,3m Julia Vitrum (start up) 4 Manufacturing Facilities – international presence
Geographical Presence Manufacturing Locations Revenues breakdown (2019 FY)
Facility Location
Portogruaro, (Venice) Italy
Empoli (Florence) Italy
Vieux Rouen sur Bresle (Normandie) France
Trabki (Warsaw) Poland (decoration facility located with glass manufacturing)
Ormelle (Treviso) Italy
Julia Vitrum Pergine Valsugana (Trento)
Gardolo (Trento) Vetro Revet Italy
Vetreco San Vito al Tagliamento (Pordenone) Italy
International presence with manufacturing plants in strategic European areas. Balanced revenues across the sectors focusing on niche areas and best mix opportunities 5 Business model
Production of glass containers dedicated to a broad spectrum of sectors/markets, with a wide range of products: different colours, shapes and dimensions. High content of product innovation and customization.
Standard
Customized
Innovative
Specialty
6 Commercial Presence and Customer Relationships
Concentratio Customer n rate of first loyalty1 5 clients 2 (Revenues)
Zignago Vetro 15% 92%
ZV Brosse 53% 93%
Vetri Speciali 27% 94%
ZV Polska 26% 73%
1 Revenues from clients present also the 2 previous years 2 Net of intercompany sales 7 Zignago Vetro Group: Sales and Profitability Track Record
Sales and EBITDA (1988-2019)
CAGR: +7,9%
Euro (m)
CAGR: +8,3%
8 Financial Performance – Zignago Vetro Group
Revenues (€m) EBITDA (€m)
27,7% 28,1% 450 130 27,2% 30% 120 23,6% 25,1% 400 110 25% 350 100 20% 300 +11.7% 90 250 +11.7% 80 +4.4% 15% 200 +1.4% 376,5 420,5 70 118,1 150 318,5 322,9 337,0 60 104,3 10% 50 91,6 100 75,1 80,9 40 5% 50 30 0 20 0% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 EBITDA (€m) Margin (%)
EBIT (€m) Net Result (€m)
60 12,6% 11,8% 12,0% 14% 50 12% 9,1% 9,7% 40 10% 8% 30 53,1 6% 20 39,8 45,0 29,0 31,2 4% 10 2% 0 0% 2015 2016 2017 2018 2019
Net Results (€m) Margin (%)
9 1Q 2020 Revenues & Profitability
ZIGNAGO VETRO GROUP
Revenues (€m) EBITDA (€m) Net Result (€m)
120 30 30% 12 10,4% 12% 25,8% 24,4% 100 25 25% 10 10%
80 20 20% 8 6,9% 8%
60 +8.3% 15 15% 6 6% 100,6 109,0 26,0 26,5 10,5 40 10 10% 4 7,5 4% 20 5 5% 2 2%
0 0 0% 0 0% 1Q 2019 1Q 2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020
EBITDA (€m) Margin (%) Net Results (€m) Margin (%)
Net rersult impacted by 2,5 mln euro unrealized exchange difference Euro/PLN on a loan in euro from Zignago Vetro to Zignago Vetro Polska.
10 1Q 2020 Revenues & Profitability by BU
ZIGNAGO VETRO ZIGNAGO VETRO BROSSE
Revenues (€m) Revenues (€m)
20 60 50 15 40 +24.6% 10 30 63,9 17,8 51,3 -32.8% 20 5 12,0 10 0 0 1Q 2019 1Q 2020 1Q 2019 1Q 2020
EBITDA (€m) EBITDA (€m)
24,3% 24,4% 19,8% 18 25% 5 20% 15 20% 4 15% 12 15% 3 9 10% 15,6 10% 2 3,5 6 12,5 5% 1 3 5% 0 -0,4 0% 0 0% 1Q 2019 1Q 2020 1Q 2019 1Q 2020 -1 -5% -3,4% EBITDA (€m) Margin (%) EBITDA (€m) Margin (%)
11 1Q 2020 Revenues & Profitability by BU
VETRI SPECIALI (50%) ZIGNAGO VETRO POLSKA
Revenues (€m) Revenues (€m)
25 15 20 12 15 9 -2.3% +0.7% 11,9 11,7 10 22,5 22,7 6 5 3 0 0 1Q 2019 1Q 2020 1Q 2019 1Q 2020
EBITDA (€m) EBITDA (€m)
29,8% 31,2% 31,8% 8 35% 4 24,9% 30% 30% 25% 6 3 25% 20% 20% 3,5 4 2 15% 7,0 7,2 15% 3,0 10% 2 10% 1 5% 5% 0 0% 0 0% 1Q 2019 1Q 2020 1Q 2019 1Q 2020 EBITDA (€m) Margin (%) EBITDA (€m) Margin (%)
12 Zignago Vetro Group - Balance Sheet
Net Capital Employed (€m) Net Working Capital (€m)
30,4% 29,0% 140 500 24,8% 30% 120 23,2% 25% 400 100 300 80 20% 473,3 465,8 60 122,0 123,4 15% 200 372,5 417,2 102,5 311,9 40 80,1 87,3 10% 100 20 5% 0 0 0% 2016 2017 2018 2019 1Q 2020 2016 2017 2018 2019 1Q 2020 Net working Capital (€m) on sales (%)
Net Equity (€m) Net Financial Debt (€m)
240 280 200 240 200 160 160 120 228,0 200,1 221,9 120 251,4 237,9 80 177,5 195,5 217,1 155,5 80 156,4 40 40 0 0 2016 2017 2018 2019 1Q 2020 2016 2017 2018 2019 1Q 2020
13 Zignago Vetro Group - Cash Flow From Operations and Capex
Cash Flow from Operations (before capex) (€m) Capex (€m)
90 100
75 80
60 60
45 94,3 79,1 82,6 40 72,0 30 66,0 66,1 54,3 58,3 20 15 24,5 4,7 0 0 2016 2017 2018 2019 1Q 2020 2016 2017 2018 2019 1Q 2020
14 Financial structure, EPS and dividends
Key financial structure ratios EPS and Dividend distribution (Euro)
2,50 0,80 74% 74% 72% 71% 71% 71% 71% 2,13 2,08 2,13 71% 70% 70% 0,70 1,93 70% 2,00 0,60 1,72 0,60 1,58 1,64 0,51 60% 0,50 0,45 1,50 1,31 0,422 0,38 0,40 1,07 0,40 0,35 0,35 0,360 0,98 0,33 0,320 0,30 50% 1,00 0,273 0,282 0,27 1,13 0,30 0,250 0,252 1,10 1,08 0,220 0,235 1,01 0,200 0,89 0,82 0,81 0,20 0,73 40% 0,50 0,70 0,64 0,10
0,00 0,00 30% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Indeb. Fin. Netto / EBITDA EPS Div per share Pay out % Indeb. Fin. Netto / Patr. Netto
Pay out guidance: 70% of net group result
15 ESG: Environment Social Governance
Our sustainable business approach
Zignago Vetro Mission:
To produce and market hollow glass containers for a range of market segments, in particular the food and beverages and cosmetics and perfumery sectors, with a particular focus on sustainability and with the aim of
providing its customers with high quality, safe products while guaranteeing its shareholders and stakeholders
ongoing value creation.
2020 Annual Report Environment Social Governance
Glass: the perfectly sustainable raw material
TRANSPARENCY, ELEGANCE & IDENTITY PERFECT PRESERVATION
FOOD SAFETY TOTAL AND INFINITE RECYCLABILITY
Hygienic, healthy, eco-friendly, infinitely recyclable and safe, glass is considered by the 78% of European consumers as the best packaging available in the Friends of Glass 2018 survey. Environment Social Governance
Glass at the heart of a sustainable world:
- Glass adapts perfectly to a circular economy as it is 100% recyclable, for an infinite number of times, and without deteriorating the quality of the new container; - For this reason, in the future, glass will increasingly be one of the alternatives to plastic and all packaging and non-recyclable materials; - Zignago Vetro aims to be a leader in the circular economy : glass cullet is indeed our main raw material and we deeply invest in glass cullet treatment plants through three companies (Vetreco S.r.l, Vetro Revet S.r.l and Julia Vitrum S.p.A.). Environment Social Governance
To fully spread and implement the sustainability principles within its business culture, Zignago Vetro has decided to build a complete ESG FRAMEWORK , which is structured as follows:
- ESG GOVERNANCE : the Board of Directors has appointed an internal ESG Committee, made up of 7 Top Managers;
- ESG COORDINATOR : he guarantees, manages and improves the implementation of the ESG principles within the
company;
- ESG CONSULTANTS : external experts which provide for advise on ESG topics;
- ESG POLICIES : integrated in all the operative procedures of the Group;
- ESG’S OBJECTIVES SYSTEM & MEASUREMENT OF THEIR ACHIEVEMENT : ESG objectives are set annually within a specific
roadmap. Also, since 2020, Zignago Vetro has associated them to an incentive remuneration policy for Directors
and Managers;
- ESG STRATEGY : starting from the 2030 Agenda of the United Nations , the Committee has set an Agenda until 2025,
with intermediate goals and a list of KPIs for the Group.
The ESG framework has been integrated into our corporate strategy , with the aim to get a complete alignment of internal and external stakeholders' interests. Environment Social Governance
Aware of its role for the sustainable development, Zignago Vetro has linked its activities to the 2030 Agenda of the United Nations , focusing mainly on the subsequent 12 Goals that are connected to 3 principal pillars:
PILLARS Environment Social Governance
Environment
Social Governance Environment: raw materials management
To date, almost half of total raw material (46,5%) is recycled glass, marking a +8,4% increase with respect to last year.
The use of recycled glass has a triple advantage: - saving of virgin raw materials - energy saving - lower CO2 emissions
The aim of Zignago Vetro is both to increase the amount of glass cullet used in production, and to increase its range of containers that can be made with recycled glass: - an example is the line Natural Green :
Up to 90% of Natural UV Reduction of CO2 recycled glass protection up to 99% emissions up to -36% Environment: energy efficiency
Zignago Vetro has made significant efforts to start a positive trend of energy efficiency both in terms of energy consumption per production output and of renewable energy self-production ; this also results in a reduction of CO2 emissions per glass produced.
In 2019, the energy consumption per ton of glass produced have decreased by -5,5%. This has been possible thanks to:
- Engineering and development of more energy-efficient melting furnaces;
- Continuous revamping of auxiliary systems with efficient and sustainable solutions;
- Installation of a recovery boiler with steam turbine and photovoltaic panels;
- Zignago Power biomass plant direct supply;
- Reduced energy demand due to an increase in the usage of glass cullet;
- Use of LED lamps for indoor lightning. Environment: energy efficiency
In this scenario, the pursuit of the objective of a balanced mix among the energy sources is also important, trying to maximize the use of renewable and self-produced ones. From 2018 to 2019, the percentage of electricity that comes from renewable resources has increased by +31,4% , reaching the +40,6% of the total energy consumed, thanks to: photovoltaic panels, steam turbine and the biomass plant Zignago Power.
72% 69,1% 59,4%
40,6% 30,9% 28%
2017 2018 2019
Renewable sources Non-renewable sources
During 2019, the use of electricity from renewable resources has saved 23.410 ton of CO2 emissions. Environment: water management
Zignago Vetro is deeply concerned to protect the hydrogeological balance and to prevent any instability.
- In 2019, the value of specific water consumption per ton of glass produced has significantly decreased by -33,9% , thanks to: - the implementation of closed-circuit water systems and recycling and recovery systems; - the use of proper plants for the wastewater and rainwater’s treatment and disposal.
Zignago Vetro is also involved in many activities, aimed at improving people’s sensitivity towards the marine litter phenomenon due to plastic:
- Since 2018, together with Assovetro, we support - We promote the plastic reduction in the the European Campaign #EndlessOcean workplace: implementation of plastic-free policy promoted by Friends of Glass (FEVE) in the company’s canteens and meeting rooms Environment: emissions
Zignago Vetro is actively committed in decreasing the CO2 emissions: between 2018 and 2019, CO2 specific emissions have decreased by -5,7%.
CO2 emissions (Scope 1 & 2) / Glass produced (ton With the aim to decrease the CO2 emissions, the Group has set the following CO2/ton) targets:
- reduction of energy consumption; 0,695 -1,3% 0,686 - maximization of the quantity of glass cullet lead into the -5,7% furnaces; - introduction of lighter products, that reduce the quantity of 0,647 glass necessary for their production. 2017 2018 2019
Other initiatives: - Sustainable Logistics: improvement of transports by railway (multimodal transport system for raw materials) Environment: waste management
From 2018 to 2019, we got a general decrease of ordinary waste in relation to the ton of glass produced (-13,8%): this reduction is visible both for non-hazardous waste (-15,1%), and for hazardous waste (-6,9%).
Total waste for destination:
14% 4,4% 5,7% 22,1% 20,7% 27,8%
2017 2018 2019
67,7% 73,6% 63,9%
Total waste in Total waste sent to Total waste sent to recovery landfills recycle or recovery (also energy recovery)
Most of the waste produced (77,9% overall) is recycled, reused or recovered (also energy recovery), while only the residual part (the remaining 22,1%) is sent to landfills. This demonstrates the Group's constant attention to waste management in terms of ecology and circularity. Environment: projects for the environment
During 2019 we have supported the following projects:
- MEGLIOINVETRO
- ENDLESS OCEAN
- PLATIC FREE POLICY
- ENVIRONMENTAL EDUCATION IN SCHOOLS
- TOGETHER FOR THE VENETO MOUNTAINS
- TREEDOM
- ESG CONFERENCES Environment: 2020 Goals and 2025 strategic Goals
Regarding the pillar “Environment” , Zignago Vetro has set the following KPIs and targets:
2019 2020 2025 TOPIC KPIs Achieved Goal Goal Strategic Goal Raw materials % of recycled glass on 46,5% 49% 53,2% management total raw materials
Energy consumption per Energy efficiency ∆%: -5,5% ∆%: -1,7% ∆%: -6,7% ton of glass produced
% of elecricity from 40,6% 45% 77,7% renewable resources
Specific water Water management consumption per ton of ∆%: -33,9% ∆%: -25,5% ∆%: -30% glass produced
Emissions CO2 specific emissions ∆%: -5,7% ∆%: -1,1% ∆%: -17,6%
Multimodal transport Sustainable logistics In progress In progress system Ordinary waste per ton of Waste Management ∆%: -13,8% n.a. n.a. glass produced Environment-related 10+ supported €100.000 budgeted €100.000 budgeted Supported initiatives projects porjects for this topic for this topic Social: human resources management
In 2019, the Group steadily continues to represent a point of working opportunities: the employees’ headcount is of 1.733 people , with an increase of +54 people with respect to 2018, confirming the positive occupational trend and with a substantial maintenance of female and permanent employment increase.
Workforce by professional category in the last 3 years:
1733 1800 1608 1679 1600 1346 1386 1400 1280 1200 1000 800 600 400 240 245 255 200 20 68 22 66 23 69 0 2017 2018 2019
Executives Managers White-collar Blue-collar Total Also: - Zignago Vetro is committed to the total respect for all forms of human right, and it aims to be a gender-balanced and truly equal workplace; - the Group promotes work-life balance initiatives, allowing flexible working hours and part-time option; - Zignago Vetro has promoted a corporate welfare plan. Social: health and safety in the workplace
The Group’s companies give the highest level of attention to the issues of health and safety in the workplace and prevention. In 2019, the safety protocols have been strengthened and the hours of training on workplace safety increased.
Accidents – Frequency index Accidents – Severity index 25 1,2 21,37 0,978 20 1 17,23 16,59 0,78 0,8 0,739 15 0,6 10 0,4
5 0,2
0 0 2017 2018 2019 2017 2018 2019
The accidents in the Group are steadily diminishing, from 56 in 2017, to 47 in 2018 to 46 in 2019; likewise, the frequency index is decreasing, reaching 16,59 in 2019: this value is only slightly higher than the average value of the hollow glass companies in Italy, that was 13,42 in 2018. Social: consumers’ Health & Safety
Zignago Vetro has obtained various certifications, confirming its attention towards its clients:
- We are certified UNI EN 15593:2008 for the design and production of glass containers for alimentary usage.
- We are certified ISO 9001:2015 for the design, production and commercialization of glass containers and for the commercialization of accessories and secondary processing.
- Achievement of environmental certification ( ISO 14001 ) for Fossalta and Empoli. In progress in Zignago Vetro Polska.
- International standard for food safety : within 2020 for Empoli.
- The Group is member of Ecovadis and CDP – certified entities for ESG evaluations – achieving good performance results.
Also, since 2016, the Group has registered 0 cases of products’ defects with consequences for consumers’ health & safety. Social: personnel training and development
Zignago Vetro is actively engaged in improving personnel skills:
- in each country in which the Group operates, there Training hours: are training programs structured according to the different needs, for all the professional categories; - in 2019, the Group provided 16.874 training hours overall
- since 2018, the Group has established a career program called Zignago Academy , oriented to the newly hired young talents, with the aim to foster interdisciplinary skills, engagement and managerial development.
Since 2019, Zignago Vetro has also started some training activities on sustainability issues. Social: protection of diversity, equal opportunities and non-discrimination
The management of Zignago Vetro companies is conducted with absolute respect for personal diversity and by ensuring equal opportunities. In particular, in Zignago Vetro we promote social inclusion policies :
- since 2016, Zignago Vetro has entrusted the implementation of some general services
to the Pegaso social cooperative, which supports the use of disabled personnel;
- since 2017, Zignago Vetro Brosse constantly cooperate with small companies located
in a region with high unemployment rate;
- since 2018, Zignago Vetro has started a collaboration project with the social
cooperative “Coopnoncello”, in order to give people with disabilities the opportunity
to contribute to production;
- since 2019, Zignago Vetro Polska has launched a recruitment project for Ukrainian
employees coming from war-conflict zones. Social: suppliers’ management
Zignago Vetro fosters the sustainability culture along its entire supply chain, pursuing the following objectives: - engaging with suppliers who share philosophies in line with Zignago Vetro's policy and with the principles of ethical, social and environmental responsibility promoted by the company;
- In 2019: creation of the supplier’s Code of Conduct (the subscription provides for the adhesion of suppliers to a series of ESG principles).
- ensuring a responsible selection and qualification process of the supply chain; - favoring local suppliers, with the aim to support the community growth.
Suppliers’ origin
Foreign Suppliers
Local Suppliers Social: 2020 Goals and 2025 strategic Goals
Regarding the pillar “Social” , Zignago Vetro has set the following KPIs and targets:
2019 2020 2025 TOPIC KPIs Achieved Goal Goal Strategic Goal Human Resources Employees Headcount ∆%: +3,22% n.a. n.a. management Ongoing Ongoing Work-life balance initiatives Implemented implementation implementation To be extended in To be extended in Corporate Welfare plan Implemented in Italy other plants other plants Health and safety in the Accidents’ trend ∆%: -2,1% Keep lowering Keep lowering workplace Extend Groups’ Consumers’ Health & ISO 14001 in Poland, Group’s certifications ISO 14001 in Italy certifications to other FSSC 22000 in Empoli Safety plants Defective products affecting consumers’ health 0 cases 0 cases 0 cases and safety Personnel training N. of training hours 16.874 Improve the n. of hours Improve the n. of hours Protection of diversity, Special project in Improve s ocial inclusion Improve s ocial inclusion equal opportunities and Social inclusion policies Poland policies policies non-discrimination Favoring local suppliers & Ongoing Ongoing Suppliers’ management creation of the Suppliers’ Achieved implementation implementation Code of Conduct €100.000 budgeted for €100.000 budgeted for Social-related projects Supported initiatives 10+ supported porjects this topic this topic Governance: Board of Directors composition
The structure of Board of Directors e is characterized by gender and independency balance:
Paolo Giacobbo Executive 46% Manuela Romei Independent
Barbara Ravera Independent 54% Franco Moscetti Executive
Stefano Marzotto Executive
Luca Marzotto Executive Non-independent Director Independent Director Gaetano Marzotto Executive
Daniela Manzoni Independent
Giorgina Gallo Independent 38% Roberto Cardini Executive
Ferdinando Businaro Executive 62% Alessia Antonelli Independent
Nicolò Marzotto Executive
Male Female Governance: risk management system and fiscal transparency
The Group’s governance has an Internal Control and Risk Management System , aimed at identifying, measuring and monitoring the principal risks. The main bodies are: - the Board of Directors; - the Director in charge of the Internal Control and Risk Management System; - the Control and Risks Committee; - the Internal Audit Manager; - the Board of Statutory Auditors; - the Supervisory Board. The main elements upon which the Internal Control System is based are as follows: - The Ethics Code; - Organizational structure; - Powers and delegations.
The Group's operations are based on the maximum levels of fiscal accuracy:
- the Group has registered 0 cases of corruption; - the financial data are subject to a double control by the auditing company and the fiscal advisors used by the Group’s companies. Governance: 2020 Goals and 2025 strategic Goals
Regarding the pillar “Governance” , Zignago Vetro has set the following KPIs and targets:
2019 2020 2025 TOPIC KPIs Achieved Goal Goal Strategic Goal
Fiscal transparency Corruption cases 0 0 0 Operative structure and committees able to Ongoing Ongoing Governance structure Achieved guarantee proper level of achievement achievement management quality Component of incentive Implemented. To be Remuneration system remuneration linked to n.a. To be improved improved ESG targets achievement Operative structure and Internal Control and Risk committees able to Ongoing Ongoing Achieved Management System guarantee proper risk implementation implementation management Environment Social Governance – Roadmap
“Keep growing together in a sustainable way” Contacts:
Roberto Celot CHIEF FINANCIAL OFFICER INVESTOR RELATIONS [email protected]
TEL (+39) 0421 246 111
Zignago Vetro S.p.A. Via Ita Marzotto 8, 30025 Fossalta di Portogruaro (VE) – Italy P. Iva 00884050279 www.zignagovetro.com