Increased revenues and production output due to improved demand

The domestic sector of plastic packaging is examined in a recent study of Infobank Hellastat S.A. According to Alexis Nikolaidis, Economic Research & Sectorial Studies Senior Analyst, the economic recession that occurred in late 2008 restricted domestic industrial production output significantly, with negative implications being identified in most of the individual sectors. Consequently, there was a decline in the production activity of the plastic packaging sector, the end products of which are used in several Greek manufacturing industries.

In detail, according to the relevant index of ELSTAT, the production performance of plastic packaging companies kept dropping up to 2013, while the manufacturing and trading activity was falling at a high rate, reflecting the conditions of diminishing demand that prevailed for packaging and intermediate products.

Subsequently, there was a recovery trend in consumption during the four years that followed, with the level of production output for the sector rising further by 3.1% in 2017. Increased demand from the farming sector due to the boost in the volume of exports of fresh fruit and vegetables has been a positive parameter over the last years. At the same time, the boost of the sector’s exports to markets with more favorable economic conditions has had a positive impact. Large companies were those benefited most, a substantial part of the production of which is channeled abroad, affecting thus positively the total value of the market.

Nevertheless, the prices of raw materials – and the cost of production, as a result – rose last year, due to the recovery in international oil prices. This fact has had a negative impact on the results of companies that failed to shift additional cost into final prices in a timely fashion.

According to Mr. Nicolas Gouzelos, Chairman & CEO of Infobank Hellastat, “Domestic economic activity has returned to a rising trend as of this year, which will have a positive impact on Greek manufacturing. This positive momentum – provided that there is not any extraordinary turbulence – will favor the sector of plastic packaging products. Furthermore, the further boost of the sector’s export activity in flexible packaging products (especially to emerging countries, such as in Asia) can be seen as a doorway of opportunity .”

Financial analysis

In the study of ΙΒ.HS, the financial statements of 62 companies are analyzed. The key conclusions can be summarized as follows:
  • In 2016, Turnover showed a rise by 3.1%, at €702.83m.
  • EBITDA rose by 25% to €117.37m, whereas EBT by 50%, reaching €63.38m.
  • The EBITDA margin and the EBT margin rose to 4.1% and 2.6%, respectively.
  • Capital leverage improved slightly to 1 over 1.
  • Receivables were collected within a period of just over 4 months
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