Good morning, everyone, and thank you for joining us. Welcome to our Q1 2026 financial result call.

I'm pleased to have with me today Cristina Riesgo, our new CFO. As usual, we will go through our presentation, and then we'll have the Q&A session.

After a quick introduction, we'll go directly to our numbers with Cristina, and I will be back with our outlook for 2026. As an introduction, just to remind you, as usual, that Verallia is a global leader in glass packaging.

We are number one in Europe, number two in Latin America, and number three worldwide. On this chart, you have our ID card.

You have on the left the 2025 split of our sales by segment. One of our strong assets is our customer base and the diversified and balanced end markets in which we operate.

We operate in 12 countries, with 35 glass plant and 67 furnaces, serving 11 customer 11,000 customers, and producing 18 about 18 billion bottles and jars a year. Please note also that we are running 19 cullet recycling centers, allowing us to control about 50% of our needs for external cullet.

Before moving to our numbers, I would like to share an update on our industrial adaptation footprint, which was announced in mid-February. As a reminder, we decided to adapt and reduce our installed capacity to align with the reality of current demand and to address overcapacity in the European market.

Our three projects are progressing as planned and in line with local processes. In Germany in Essen, the plant was shut down at the end of March.

Negotiations regarding the social plan should be concluded in the coming weeks and are expected to involve around 300 terminations. In France, this concerns the closure of one furnace at our Châteaubernard plant.

This furnace has reached the end of its life and will not be rebuilt. In this case, the social process to finalize the voluntary redundancy plan is underway, and the furnace is expected to be shut down by the end of H1.

In the UK, the closure of one of the two furnaces at our Knottingley plant is scheduled for the end of the month. Overall, these three projects are progressing as planned, with the full impact expected in H2.

I let now No, sorry. Before letting the floor to to Cristina, a quick comment about our financial numbers.

Our Q1 numbers are showing a profitability up year-on-year and marking a first stage in the recovery of Verallia's performance. Q1 revenue is down by -2.4% year-over-year to €798 million, with organic growth at -1.2% year-over-year, with total volume being flat.

Q1 adjusted EBITDA is €159 million, +8.3% versus last year last year, and with a margin at 19.9%, which is +197 bps versus Q1 last year. About our net debt, our leverage is stable versus last December at 2.7 times.

Now I let the floor to Cristina for more details.

Thank you, Patrice. Let's start with looking at the revenue bridge based on the numbers that Patrice just gave, okay?

Revenue came in at €798 million, down 2.4% year-on-year, which is a -1.2% organic growth. Looking specifically at volumes, trends in Q1 were overall stable and fully in line actually with our expectations.

Volumes were slightly down year-on-year at 0.4%, where we saw growth in food jars and spirits that actually offset the declines experienced in non-alcoholic beverage and sparkling wines. In Europe, the demand is broadly stable.

As expected, volumes in Germany are down by double digits, but this is fully aligned with our industrial footprint adaptation. Excluding Germany, European volumes were growing at a low single-digit rate, and this is driven by the momentum in Southern and Western Europe.

Then in Latin America, volumes are overall flat, and we saw low single-digit growth in Brazil, stable volumes in Argentina, and a high single-digit decline in Chile. Spirits actually continue to perform very well and confirm the positive momentum already observed end of last year, particularly in Brazil, and which is supported by our Campo Bom furnace.

Then beer and wine trends remain mixed across the region. Now if we turn into pricing and mix, the impact was negative by around €60 million, almost 2%, okay, which is what's reflected on the bridge, and is coming from the carryover effect from '25 and some initial prices that we had to negotiate at the beginning of the year in a very different cost environment, okay, from what we're seeing today.

Importantly, is that this price/mix impact is much much less pronounced than in previous quarters. Actually, we are confirming that we're moving into a normalized environment.

Finally, foreign exchange had a slight negative impact outside Argentina, and it was mainly related to the UK and Ukraine, and there is no perimeter effect during the quarter. If we turn now to the EBITDA bridge, what we see is higher profitability and clearly fueled by slightly positive spread and net productivity gains.

Adjusted EBITDA reached €159 million in the quarter, which is up 8.3% compared to Q1 versus last year, which translates into a margin of 19.9%, almost 200 basis points higher year-on-year. The improvement is driven by three key factors.

First, activity and operating leverage that were broadly neutral and reflecting stable volumes overall. Second, after two years of a strong negative spread, the price/mix cost spread turned slightly positive in Q1, which is reflecting a normalization effect, right, that helped, in particular, by lower energy costs following the end of the very expensive 2022 hedges.

Third, productivity delivered very strong this quarter, and net productivity reached 2.1% net of cash production costs, and that represents €12 million. This is actually the result of continued discipline and operational initiatives and performance action plans across the group.

Finally, SG&A was very well controlled, and all the teams pushed for reductions that were more than offsetting some one-off items that we saw. FX was essentially neutral, excluding Argentina.

Overall, this confirms that profitability is structurally improving, even in a still challenging commercial environment. If we look at the net debt evolution and leverage, as of March the 31st, '26, net debt stood at €1.9 billion, including €64 million of rights-of-use assets.

Leverage remains stable at 2.7 times of the last 12 months adjusted EBITDA, which is unchanged versus December 2025. It's important to remark that EBITDA increased versus the year-end and moved back above the €700 million for the first time in several quarters, right?

I would just mention a quick thing that actually net debt increased versus December 2025, but that was driven by normal Q1 seasonality, minority dividends that we paid in the Canary Islands, and then some fair value movements on financial instruments, okay? That doesn't change our leverage position, which keeps us stable.

Then finally, if we move to our financial structure and liquidity, I will just mention a few words. Our financial liquidity remains very strong and has a very good maturity profile, as you can see, with the first maturity in 2028.

Okay. The majority of our debt is actually long-dated, and a significant portion is on our floating rate exposure is hedged through interest rate caps, which actually protects us from short-term market volatility.

Our financial structure remains robust and very flexible and resilient, right, which gives us confidence, visibility to execute our strategy and 2026 objectives.

Thanks a lot, Cristina, for your comments. Let's move to the '26 outlook.

For full-year '26, we do confirm our objectives in an economic environment marked by continued soft consumption and increase, obviously, geopolitical uncertainty. Subject to the absence of a significant deterioration of the situation in the Middle East, we aim to generate an adjusted EBITDA of around €700 million and a free cash flow of around €220 million, excluding the restructuring cash-out plan in relation to the group industrial footprint optimization project.

We confirm our objectives, we confirm our guidance, and we remain focused on strengthening our competitiveness, cash generation, and deleveraging by, one, implementing our capacity adaptation plan; two, delivering enhanced PAP savings; and three, keeping CapEx under strict control around 8% of our sales, as we presented during the full-year '25 results. Thanks a lot for your attention, and now let's open the Q&A session.

Hello, good morning and welcome, Cristina. I have two questions.

The first one is related to price, and if you could give some light I know that you don't give the exact numbers on price, but if you could give us an idea on how prices are in the different geographies. In this environment of high energy cost, taking into account that you and Saint-Gobain, very close competitors, are fully hedged for the year, but not the small players in the industry, if you are seeing from those players some movements trying to put the prices above current levels in order to offset the energy cost.

The second question is you have booked around €53 million provisions this quarter in your P&L, I was wondering how much of this is cash, and also if this is the total amount that you respect from the restructuring plan to happen or we could expect something more in the future? Thank you.

Thanks a lot, Francisco, for your two questions. I will take the first one about pricing and cost, and Cristina will take the second one.

About pricing, you have seen that in Q1 result number, we are around 2%, as volume is being flat, we are 2% by decrease, low single-digit price reduction. By geography, obviously, this is a mix of Europe and LatAm.

In LatAm, we are much more in an inflation situation, we have some slight price increase. The weight of LatAm in our business, 15% to 20% of all of that.

Low single-digit price decrease, to make it simple, in Europe, with 80% more than 80% of negotiations already done and behind us, which is putting us in a situation we were expecting, which is a normalization of the spread of price/mix versus cost. You're right.

That we are hedged on energy above 80%, which gives us visibility, and we are benefiting from that and being in a kind of cautious situation versus what is coming, especially with this Middle East situation. I cannot comment about competitions and what the competition is doing, obviously, as I do not have any information except what is publicly communicated.

We do not communicate ourselves on that. No more to say about that on my side, Francisco.

For the €53 million

Yes, Francisco, as you were mentioning, we booked in Q1 a €53 million restructuring provision, and that reflects our best estimate as of today of the one-off costs that we plan to have, right, on the restructuring programs. As Patrice mentioned, the program is proceeding as planned, and it's fully in line with the road map that we communicated.

Okay. The measures are primarily people-related and focus on removing structural costs in geographies where capacity utilization and demand dynamics no longer justify the current footprint.

These costs are actually largely cash-based and will be mostly absorbed in 2016 2026, always, with a little remainder in 2027. Thinking of the cash impact of Q1, I can say that it's just a few million, okay, less than 10 in Q1, as the plans are still And we'll see the structural savings coming towards the rest of the year, which means permanent reduction in fixed personnel costs.

Okay. Could we have an update of the savings?

I don't know if you have commented already this, if it's going to be 1:1 to the provision or something, a payback of 1% or of one year or something like that, or could you give us more details on the savings?

On the savings, what we have is we are expecting, let's say, a net run rate EBITDA gain of around €20 million. We expect to get, obviously, as we expect full impact in H2, it's going to be in '26 50% of that.

This is what we have in our plans.

It's included in the €700 million that you mentioned on the guidance?

Yes.

Yes.

Okay. Thank you.

Yes, good morning. Three questions from my side.

The first one, could you come back on the volume? We saw a stabilization for the Q1.

Do you expect an improvement or not for the volume in the coming months, in the coming quarters? Second question regarding the spread impact.

There is a negative impact for the top line, but a neutral impact for the EBITDA during this first quarter. Do you expect an improvement or neutral impact for the full year despite the decrease of the pricing?

The last question concerns the capacity in the European market. There is lots of close, reduction capacity with some close of furnaces.

Do you consider that currently the market is well balanced or remain with some overcapacity? Thank you.

Thanks a lot, Jean-François. About volume for Q1, so as we said, in Q1, we have flat volume.

0 minus to be precise, but is we consider flat, with a strong growth in food jars and spirits, which is offsetting a decline in non-alcoholic beverage and sparkling wines. We have a decline performance, I would say, in Germany, which was expecting and in line, as it has been said by Cristina, and in line with the adaptation plan we have put in place.

In Latin America, overall, we are flat as well, but with, let's say, a low single-digit growth in Brazil, flat in Argentina, and high single digit down in Chile. In LatAm, spirits are performing very well and confirm the positive momentum we had last year, especially in Brazil, while we see beer and wine more mixed in terms of evolution.

For the rest of the year, we stick to what we said during full year. We expect to be in a flattish situation, zero plus, zero minus.

No big expectation on the volumes compared to last year for the to go. We're very cautious about that, and especially cautious in the current environment with the Middle East and to understand if inflation is back, is there any demand impact to come or whatsoever.

We are really vigilant on that, no big change for this topic. On spread, we are exactly where we said we would be, which is you remember that after two big positive years, '22, '23, two strong negative years, '24 and '25, we said that spread will normalize.

This is exactly what we see, and we do expect that for the full year. No change there.

About capacity, what I can say that I do believe that we have still some overcapacity as a market and not well balanced between demand and capacity in northeast Europe. We do consider that we have done our part of a job there, moving from, if you do remember, we used to had in '23 10 furnaces in Germany.

With the plan we have now, which is underway, we are going to move from 10 to 6 furnaces. We do believe that we have done our job on our side and that we are quite comfortable, I would say.

We have now footprint in Germany with three plants, six furnaces, to do good business. For the rest of Europe, we see the demand and capacity much more balanced.

In our view, on our side, no need to go for much more adaptation.

Thank you very much.

Hi. Thanks for taking my question.

A couple. The first one is on the price cost spread.

Do you expect that to remain positive over the year? You mentioned normalization, but wondering whether that could be a positive contributor to the EBITDA bridge for this year.

Thanks a lot. Again, this is what we said.

We stick to what we commented in February. We see the spread, price/mix versus cost, normalizing, which is, again, if you take the latest 2022, 2023, 2024, 2025, we had big positive and negative swing.

Here we are saying that it's normalizing, and this is what Q1 is demonstrating, and this is why we say we stick to that for the full year. It means it's going to be zero plus, zero minus.

That in price/mix versus cost, there is a mix which is quite complicated to predict and depend on the demand. We'll see.

We clearly have the demonstration that compared to the past four years, there is a clear normalization, and we are back to our standard business model, which is a slight growth in activity, neutral spread, I would say, and then an improvement in profitability coming from self-help measure, mainly PAP delivering more than 2% cash cost saving. We are back to something which is much more standard.

Okay. Thanks for clarifying this part.

In terms of your volume performance, I just wanted to double-check. You said -0.4% for the volumes in the quarter overall?

Just want to check that. Also, if you can give us a sense of the market performance if you were in line with market, above, below.

Just wanted to have a bit of a sense of the market overall.

I do confirm on the volume side for Q1, this is what you said. It's flat.

Again, it's flat in Europe, with Germany being strongly negative, but expected and in line with our plan. It means that on some other regions, we have much more positive development in Europe.

LatAm as well is, again, flat, with Brazil slightly up and Argentina flat and Chile down. This is what we see.

Compared to market, it's always complicated to position, as we speak, because we do not have really, as we speak, the market, and we cannot speak about market share or category share or whatsoever. What is a positive news for us is that we are aligned with what we said and planned at the beginning of the year.

Okay. Roughly in line with market.

Last one, if I can, is just a clarification in terms of the cost and savings associated with the closures of the three furnaces. You mentioned €20 million as a cost savings that you're expect to see.

You already mentioned the cash cost, but I just want to clarify what the number is. The cash cost for the closure.

It's what we announced in February. It's between €40 to €50 million.

Okay. Sorry.

I just wanted to repeat that. Okay.

Thank you. Thank you very much.

Yeah.

Welcome.

Yes, hello. Good morning and welcome, Cristina, to our small community.

My first question probably it's on energy hedging. You commented that you are fully hedged for 2026, and my question is more related to 2027, whether you have made some proactive actions given the current backdrop or whether you can give us an initial thoughts or the amount of hedge that you have for next year.

Manuel. Just to correct, we are not fully hedged for '26.

We are hedged of around slightly above 80%, just to correct. This is aligned with our hedging policy, which is for year + 1, at the end of year at the end of a year, for the year + 1, I want to be covered by 80%; for the year + 2, 40%; and for the year + 3, 20%.

This is a rolling policy. We are fully aligned with that.

We have about 20% of our energy cost for '26 which are following the spot the spot price, just to clarify. Two, about '27.

We are in a situation to apply our hedging policy, but since March, to be clear, due to the uncertainty and the volatility, we have made a pause for '27, waiting for a better understanding of where the energy is going to land, especially on the gas on the gas side. For '27, we have already taken some hedging position, but taken from '26 and taken from beginning of the year, Jan and Feb, and no more since March.

We are in a kind of pause mode as we speak. Hope it clarifies.

Okay. Thanks.

Maybe a follow-up on this. Can you remind us, Patrice, please, what is the amount of price pass-through or direct pass-through mechanism on your contracts?

As a percentage of sales or whatever number that you can provide us.

It's about 15% to 20% of our business, which is managed under pass-through formula.

Okay. Great.

Excellent. My second question then is I believe that Cristina mentioned the €11 million net productivity gain on this year.

My perception, and correct me if I'm wrong, is that the €20 million delta of new savings for the revamping of the European business are not included in those €11 million. It's just to confirm to double-check that this €20 million expected savings are something that we are going to see in coming quarters.

Manuel, I confirm. We, as we were mentioning, we are still closing negotiations.

So

Keep in mind that the €20 million is the full

Manuel?

Yeah.

Could you hear us?

Yeah. Yes, now.

Sorry.

Oh, okay. I was just mentioning that I confirm the €11 million doesn't include any benefit from the

Okay. Great.

Then

is my final question then. Since we expect an acceleration or a solidifying of this benefits from the cost-cutting plan, and we have seen a very nice 8% EBITDA improvement year-on-year, however, the guidance imply a flattish performance for the full year.

This is because you want to be conservative at this point in time, because to some extent, Q1 results has been benefiting from some easier comps from Q1 last year? I wanted to double-check with you at this point in time why, with a meaningful close to double-digit EBITDA improvement, guidance is still pointing to a flattish performance year-on-year.

We guide on a full-year basis. We are not guiding by quarter, and it's already a nice exercise.

One. Two, obviously, we have a solid performance, and we are quite satisfied with Q1, which is in line with what we expect for the full-year shape.

It's just one quarter, and this quarter, you're right, we have a positive comparison base compared to last year. Let's see how it's going to develop.

As we speak, we are in line with what we committed on. Our plans are on the way.

We will see how Q2 is confirming our plans or not, and we will be back in H1 or in July for H1 results, and we'll see if we have to update or not. Based on the uncertainty, volatility, what is in front of us, sticking to our full-year guidance is our stance today.

Let's see. It's just one quarter, huh?

Three quarters to go.

Okay. Thank you.

Welcome.

Thanks a lot. Good morning, all.

David Placet, I'm the head of IR. We have a few written questions that I'll share with you now.

The first one comes from Antoine Laurent. Question being, "If I remember well, your expectations for '26 price was towards zero for the full year, and mix was still a question mark.

I'm wondering if this Q1 price/mix cost spread, slightly positive, was expected? It looks like it would be some unexpected upside so far."

Basically, expectations for the full-year price/mix cost spread.

The answer is yes, it was expected. Again, keep in mind what we said.

We expect in '26 normalization of the spread. Again, look at what was the result of our spread in '22, '23, '24, '25, with big swing up and down.

Here we are speaking about a normalization. What we have in Q1 is what was expected.

Again, we are not managing on a quarterly basis. We're managing on a full-year basis, and what we said is still valid for the full year.

With the caveat of a mix, again, that we do not control. This is why we are saying normalizing.

Great. Thanks, Patrice.

Another question from Shamir Shah: "Can you talk about industry-level capacity closures for this year, or planned for this year? Or I guess planned probably we can't, but I guess maybe we can have a quick update on the recent announcements."

Plan, I don't know, we'll see. What we know is with the latest announcements, and especially the the one which came last week or the week before, I don't remember, with Ardagh in Germany, since 2023, since the end of 2023, we are up to 25 furnaces closed, still to come in '26, the the final date, but 25 announcements made, which is at the end an equivalent of 2.2 million tons of glass, which is about 10% of the total production glass in in Europe.

This is quite significant.

Thank you, Patrice. Then a final set of questions from Andrea Giuseppe Frey.

Four of them. The first one relates to energy prices.

Question is, "What are your scenarios for energy prices, and how confident are you to keep full-year EBITDA guidance given significantly higher energy prices? How do you mitigate the impact?"

That's the first question.

About energy impact, again, thanks to our hedge policy, we are exposed about 20% of our energy cost, which is though we can make many simulations, but with what I would consider as a central scenario, the impact on energy cost is not so material, I would say, compared to a full-year impact. We are speaking about something which will be below double-digit million euro for us.

Again, this is according to what we have as a view today. Obviously, what is much more complicated for us to simulate is what is everything related to logistics and costs and all of that, and it could be something similar, worst case.

This is what we have. In terms of pricing, we are monitoring all of that.

Far, no pricing adjustment related to this Middle East situation. Obviously, if it will last, we'll have to move and make a kind of surcharge at a point of time.

Far, nothing done, nothing planned, waiting and observing the situation.

Thank you. The second question, I guess you've just answered it.

Actually, it relates to pricing, so, "How do you expect pricing to develop in '26?"

I guess that's been This is what I've just said. No more comments.

The last two questions relate to leverage and rating. The first question is, "Where do you expect net leverage to end up by the end of '26?

Is around 2.5 times a fair assumption?"

Look, I will not comment on a different or new guidance, we'll refrain to the earnings at the first half of the year, okay? What I can say is that definitely our capital allocation priorities remain unchanged, right?

We have had a strong quarter in terms of cash generation with the disciplined CapEx, and we keep targeting to deleverage by the end of the year, right? There are no changes to the dividend mechanics.

There will be no buybacks and no capacity projects, right? In the capital markets day in Q3, we will have the appropriate forum to address any medium-term capital allocation, okay?

Then as I was mentioning, the first quarter follows typically a seasonal pattern, with a bit of a working capital absorption, but we've managed to contain our cash outflows. For the full year, we expect cash generation to be weighted towards the second half.

With this, liquidity remains strong, and the leverage will obviously, doing the math, it will hopefully go down, right? We have significant headroom, right, across our financing structure.

Definitely, our goal is, as we said in the press release, is to return to investment grade, but that's something that we don't control, and we remain focused on execution, right, rather than agency decisions.

Great. Thanks, Cristina.

That leads us to the last question, which actually you've just partly answered, which was, "How confident are you that you can keep Moody's IG rating? I.e., how much time do you have to improve credit metrics?

Etc." Again, we're working towards that.

We're doing the job, and I think that's it. That is it for me.

Thanks, Cristina. Thanks, Patrice.

As a reminder

Hey, hi. Thanks for taking the follow-up.

It's very similar to the question that's just been asked. It's on your rating on the S&P side.

Basically, you're mentioning your release that you plan to return to investment grade. I guess also to regain IG status with S&P.

Would you be able to put a time frame in your plan to get back to IG on the S&P side?

No. Unfortunately not.

As I was mentioning, we are focusing on operational execution, deleveraging, and cash generation, and we are in contact with S&P, and they not only look at one quarter, right? Unfortunately, I cannot give you a time frame.

What I can give you is that deleveraging and cash generation is definitely a priority and one of my main focus.

Okay. Thank you.

Yes. Sorry, just a quick housekeeping-related type of question.

Correct me if I'm wrong, but neither in the presentation nor in the press release, I've seen any comment regarding a new dates of the capital market day, I don't know what is your latest thought about this event. Thank you.

We are on it, Manuel. We stick to Q3, we should come back to a precise date.

We'll fix that for sure for our next release. Working on that, and trying to work on that, obviously.

Okay.

Manuel, I would like to just clarify one additional point on the prior question on S&P. The fact that we were downgraded, it didn't trigger any coupon step-up, okay, put option or an acceleration clause.

There is no immediate or mechanical impact on the cash interest payments for us with the downgrade, just to clarify.

Okay. Thank you.

Okay.

Hi, Patrice and Cristina. It's Fraser here from Berenberg.

I just had one question. I was wondering if you've seen any change in behavior of your customers as a result of the war in Iran, especially reading about kind of higher aluminum pricing, force majeure at some smelters in the Middle East.

I was wondering if there's any kind of increased interest you've started to see in glass as a substrate or not yet? Thank you very much.

Thanks a lot, Fraser, for your question. It's a good one, and we are monitoring that, obviously, interacting with our customers.

To be clear, so far, no change. I think for our customers, the biggest impact could be supply chain disruption, and obviously preventing them to bottle and to sell.

Far, to be honest and clear, no major change. I have not observed that.

It's a little bit early to see that.

Okay. That's clear.

Thank you very much.

I believe that we have no more questions. Again, thanks a lot for your attention.

As you have seen, we have quite a solid Q1, but it's just one quarter. As I know, all the uncertainty, and from one day to the other, the geopolitical situation could trigger some impact on our business.

We remain confident, according to the guidance we committed on early this year, and you have understood that we are really focused on self-help measures, strengthening our competitiveness, cash generation, and deleveraging, so. Let's see.

Thanks a lot again, and let's meet in July for full H1 review. Thanks a lot.

Take care. Bye-bye.

Thank you.