Quadpack Industries, Sa: Quadpack 2022 First Half Results: Record Revenue Signals Strong Recovery After Pandemic Slowdown
- Revenue of €74 million in H1 2022, up 58% year-on-year (€46.7 million)
- Net profit of 1.5 million euros, demonstrating recovery from pandemic slowdown
- EBITDA €6.9m – 9.3% of revenue vs 7.5% in 2021
- 43% of turnover generated directly, for a total of €32.4 million
- Continued investments of 4.4 million euros in increasing production capacity
- Cash of €6.5m, with an increase in net debt to €53.5m
Quadpack Industries (Euronext Growth: ALQP), a manufacturer and supplier of packaging solutions for the global beauty industry, achieved sales of €74 million in the first half of 2022, ended July 31, i.e. 58% growth. Results exceed pre-Covid activity levels, making it the best half year in company history. Profitability was maintained despite strong macro-economic pressures from the energy crisis and inflation, with the company generating an EBITDA of €6.9 million. The acquisition of decoration specialist Stefan Wicklein in the second half of 2021 contributed to the manufacturing division’s revenue increase of 7.9%.
Quadpack’s rapid growth required a significant investment in working capital to keep up with the increased volume. Financed from the company’s own cash reserves, this investment caused the company’s cash flow to decline. During the first half of 2022, the Group’s net debt increased by €5.6 million to €53.5 million. In the second half, Quadpack is focused on reducing debt and increasing liquidity with a focus on improving cash generation and controlling costs.
|(in thousands of €)||H1 2022||H1 2021|
|Net earnings per share (in €)||0.32||(0.21)|
|Net earnings per share, diluted (in €)||0.32||(0.21)|
|Cash flow from operating activities||(1,036)||1,366|
|Cash flow from investing activities||(4,408)||(2,309)|
|Cash flow from financing activities||(3,058)||(5,873)|
|(In thousands of euros)||07/31/2022||01/31/2022|
|Equity, Group share||36,481||34,740|
|Borrowings and other financial liabilities||60 125||63,044|
|Cash and cash equivalents available||6,531||15,089|
|Net debt/equity ratio (gearing ratio)||1.47||1.38|
Challenges and Opportunities
The industry faced a challenging economic panorama in the first half of 2022, with rising energy prices playing a significant role in the global post-pandemic inflationary environment. The combination of high post-Covid consumption and the impact of the energy crisis due to the Ukrainian conflict, has seen demand increase along with costs. Efficiency measures implemented at Quadpack’s factories are offsetting cost increases, including the positive impact of the waste-fired biomass boiler at the Torelló factory in Spain. The current challenges are expected to continue until the end of the year.
Consumption growth is also an opportunity for Quadpack. In addition to cost reduction measures, the company is investing in future profitability, with a focus on its manufacturing capacity and product range. Some 6 million euros have been invested in the Kierspe plant over the last 2 years, to expand its injection and assembly capacity and to integrate decoration in-house. A state-of-the-art decoration center was inaugurated in September 2022. The investments will help the factory meet demand, which has increased by more than 40% compared to the first half of 2021. Long-term contractual agreements with key customers suggest that current volumes will be maintained for the foreseeable future.
Innovation and collaboration
Quadpack continues to innovate, with a focus on sustainability and eco-design, using more recyclable materials in its own manufacturing. Its biggest launch in 2022 was Iconic Woodacity®, a refillable lipstick with a wooden box. Product development involved a partnership with Aptar Beauty + Home, a global leader in dispensing systems, building on the companies’ respective strengths in lipstick mechanisms and wooden components, in line with one of Quadpack’s strategic pillars: collaborative innovation. The iconic Woodacity® was the highlight of Quadpack’s and Aptar’s booths at several recent trade shows, including MakeUp in Paris, PCD and Luxe Pack Monaco.
Beyond product development, Quadpack seeks to have a positive impact in all areas of its business. In the first half of 2022, Quadpackers planted trees in Spain and Germany with Life Terra and supported social and environmental projects around the world through the Quadpack Foundation. The company’s global sustainability efforts led to its certification as a B Corp in April. This achievement was achieved in less than a year, thanks to the involvement of staff at all levels of the company.
Preparing for B Corp certification also paved the way for a change in management. Good governance practices favoring a separation of the functions of Chairman and Chief Executive Officer, extensive research led to the appointment of industry veteran Alexandra Chauvigné as Chief Executive Officer, effective September 1, 2022. Co-founder Tim Eaves remains Chairman of the Board of Directors and assumes the newly created role of Chief Impact Officer to grow the company’s business as a B Corp.
Chauvigné commented on Quadpack’s performance in the first half: “The results are extremely positive and show that the business is back on track. The current climate requires us to prepare for the challenges ahead and build profitable growth. It’s an exciting time to join the company and it’s encouraging to see the involvement of the entire workforce. A good culture is fundamental to business resilience and Quadpack is built on the passion and commitment of the entire Quadpack family.
The estimated turnover for 2022 is 140 million euros, with continued momentum in 2023.
To view the full report, visit: www.quadpack.com/investors/investor-information/
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