VERALLIA SA
CONSOLIDATED FINANCIAL
STATEMENTS FOR THE PERIOD ENDED
31 DECEMBER 2020

CONTENTS
STATEMENT OF CONSOLIDATED FINANCIAL POSITION ..............................................
CONSOLIDATED STATEMENT OF INCOME ........................................................................
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ...................................
CONSOLIDATED STATEMENT OF CASH FLOWS ..............................................................
CONSOLIDATED STATEMENT OF CHANGE IN EQUITY .................................................
NOTE 1 – INFORMATION ON THE GROUP ..........................................................................
1.1
Incorporation and creation ..............................................................................................
1.2
Operations .........................................................................................................................
NOTE 2 – BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL
STATEMENTS ...............................................................................................................................
2.1
Declaration of compliance and applicable framework ..................................................
2.2
Effects of COVID 19 pandemic........................................................................................
2.3
Estimates and judgements ................................................................................................
2.4
Valuation principles ..........................................................................................................
2.5
Transactions in foreign currencies ...................................................................................
NOTE 3 – CONSOLIDATION METHODS AND SCOPE OF CONSOLIDATION ...............
3.1
Changes in the scope of consolidation .............................................................................
3.2
List of the main consolidated companies ........................................................................
3.3
Investments in equity-accounted companies ..................................................................
NOTE 4 – SEGMENT INFORMATION .....................................................................................
4.1
Basis for segmentation ......................................................................................................
4.2
Key performance indicators .............................................................................................
4.3
Segment information.........................................................................................................
4.4
Breakdown of revenue by "end market" ........................................................................
4.5
Entity-level information ...................................................................................................
4.6
Information about the main customers ...........................................................................
NOTE 5 – OPERATING INCOME AND EXPENSES ..............................................................
5.1
Revenue ..............................................................................................................................
5.2
Expenses by function and by nature................................................................................
NOTE 6 - OTHER OPERATING INCOME AND EXPENSES ................................................
6.1
Acquisition-related items ..................................................................................................
6.2
Other operating income and expenses.............................................................................
NOTE 7 – FINANCIAL INCOME AND EXPENSE ..................................................................
NOTE 8 – INCOME TAX .............................................................................................................
8.1
Income tax..........................................................................................................................
8.2
Analysis of deferred taxes on the balance sheet ..............................................................
8.3
Tax proof ............................................................................................................................
8.4
Tax consolidation ...............................................................................................................
8.5
Uncertainty regarding tax treatment ..............................................................................
NOTE 9 – GOODWILL ................................................................................................................
NOTE 10 – OTHER INTANGIBLE ASSETS .............................................................................
NOTE 11 – PROPERTY, PLANT AND EQUIPMENT..............................................................
NOTE 12 – IMPAIRMENT OF GOODWILL AND FIXED ASSETS ......................................
NOTE 13 – OTHER NON-CURRENT ASSETS ........................................................................
NOTE 14 – CHANGE IN NET WORKING CAPITAL .............................................................

1

3
4
5
6
7
8
8
8
8
8
9
10
10
11
12
13
15
16
17
17
18
19
19
19
20
20
20
21
22
22
23
24
25
26
26
27
27
27
28
28
29
32
34
35

14.1
Inventories .......................................................................................................................
14.2
Trade receivables and other current assets ...................................................................
14.3
Trade and other current liabilities .................................................................................
14.4
Factoring ..........................................................................................................................
NOTE 15 – CASH AND CASH EQUIVALENTS .......................................................................
NOTE 16 – EQUITY .....................................................................................................................
16.1
Share capital ....................................................................................................................
16.2
Translation reserve..........................................................................................................
16.3
Earnings per share ..........................................................................................................
NOTE 17 – BORROWINGS AND FINANCIAL LIABILITIES ..............................................
17.1
Net financial debt ............................................................................................................
17.2
Change in gross financial debt .......................................................................................
17.3
The Group's debt structure ............................................................................................
17.4
Debt repayment schedule ...............................................................................................
17.5
Lease liabilities ................................................................................................................
17.6
Covenants.........................................................................................................................
17.7
Change in debt.................................................................................................................
NOTE 18 – PROVISIONS AND OTHER NON-CURRENT FINANCIAL LIABILITIES ....
18.1
Provisions and contingent liabilities ..............................................................................
18.2
Other non-current financial liabilities...........................................................................
NOTE 19 – PROVISIONS FOR PENSIONS AND OTHER EMPLOYEE BENEFITS .........
19.1
Pension liabilities and other post-employment benefit liabilities ................................

35
36
37
38
39
40
40
40
41
41
41
42
45
45
45
46
46
47
47
51
52
53

19.2
Other long-term benefits ................................................................................................
19.3
Management share ownership plan ...............................................................................
19.4
Group savings plans ........................................................................................................
NOTE 20 – FINANCIAL RISK MANAGEMENT .....................................................................
20.1
Liquidity risk ...................................................................................................................
20.2
Market risks ....................................................................................................................
NOTE 21 – FINANCIAL INSTRUMENTS.................................................................................
NOTE 22 – RELATED PARTIES ................................................................................................
22.1
Transactions with associates...........................................................................................
22.2
Transactions with shareholders .....................................................................................
22.3
Transactions with management personnel ....................................................................
NOTE 23 – CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEETCOMMITMENTS..........................................................................................................................
23.1
Commitments of operating activities.............................................................................
23.2
Financing commitments .................................................................................................
NOTE 24 – AUDIT FEES ..............................................................................................................
NOTE 25 – EVENTS AFTER THE CLOSING DATE ..............................................................

56
57
58
59
59
60
63
69
69
69
70
71

2

71
72
73
73

STATEMENT OF CONSOLIDATED FINANCIAL POSITION(in € million)

31 December
Note

2020

2019

ASSETS
Goodwill
Other intangible assets
Property, plant and equipment
Investments in associates
Deferred tax
Other non-current assets

9
10
11
3.3
8.2
13

529.7
430.9
1 288.5
2.0
27.1
30.8

550.9
499.2
1 299.3
0.6
42.3
37.5

2 309.0

2 429.8

386.9
158.7
5.0
476.2

455.2
178.9
21.0
219.2

Current assets

1 026.8

874.3

Total Assets

3 335.8

3 304.1

416.7
121.6

400.2
(14.0)

538.3
39.5

386.2
33.4

Non-current assets
Inventories
Trade receivables and other current assets
Current tax receivables
Cash and cash equivalents

14.1
14.2
14
15

EQUITY & LIABILITIESShare capital
Consolidated reserves

16.1
16

Equity attributable to shareholders
Non-controlling interests
EquityNon-current financial liabilities and derivatives

17

577.8
1 569.1419.6
1 584.0

Provisions for pensions and other employee benefits
Deferred tax
Provisions and other non-current financial liabilities

19
8.2
18

134.0
146.0
24.1

133.0
166.6
43.1

Non-current liabilities
Current financial liabilities and derivatives

17

1 873.2
185.7

1 926.7
225.9

Current portion of provisions and other non-current financial liabilities
Trade payables
Current tax liabilities
Other current liabilities

18
14.3
14
14.3

59.8
367.5
21.8
250.0

51.9
383.6
19.3
277.1

884.8

957.8

3 335.8

3 304.1

Current liabilities
Total Equity and Liabilities

3

CONSOLIDATED STATEMENT OF INCOME(in € million)

Note

Year ended 31 December
2020

2019

Revenue

5.1

2 535.9

2 585.9

Cost of sales
Selling, general and administrative expenses
Acquisition-related items
Other operating income and expenses
Operating profit

5.2
5.2
6.1
6.2

(1 968.2)(160.8)(60.4)(30.1)
316.4(2 043.6)(170.8)(59.4)(17.0)
295.1

Net financial income (expense)

7(45.8)(115.9)

270.6

179.2

Profit (loss) before tax
Income tax

8(62.4)(53.8)

Share of net profit (loss) of associates
Net profit (loss) for the year

3.3

1.4
209.6

(0.7)
124.6

202.1

115.6

7.5

9.0

1.67
1.67

1.00
1.00

Attributable to shareholders of the Company
Attributable to non-controlling interests
Basic earnings per share (in €)Diluted earnings per share (in €)

16.3
16.3

4

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(in € million)

Note

Net profit (loss) for the year

Year ended 31 December
2020

2019
209.6

124.6

Items that may be reclassified to profit or loss
Translation differences
Changes in fair value of cash flow hedges
Deferred tax on items that may subsequently be reclassified to profit or loss

8.2
Total

(113.0)6.8

38.6(20.6)(10.1)

5.5(84.5)

(8.3)
(8.0)

Items that will not be reclassified to profit or loss
Remeasurement of the defined benefit liability (asset)

19.1

(4.0)

Deferred tax on items that will not be reclassified to profit or loss

8.2

1.3

2.3

(2.7)

(5.7)

Other comprehensive income (loss)(87.2)(14.0)

Total comprehensive income (loss) for the year

122.4

110.6

Attributable to shareholders of the Company

123.1

101.2

Attributable to non-controlling interests

(0.7)

9.4

Total

5

CONSOLIDATED STATEMENT OF CASH FLOWS(in € million)

Note

Year ended 31 December
2020

Net profit (loss) for the year
Share of net profit (loss) of associates, net of dividends received

3.3

Depreciation, amortisation and impairment of assets

2019
209.6

124.6

(1.4)

0.7

276.4

283.5

Gains and losses on disposals of assets

6.2

3.2

(1.4)

Interest expense on financial liabilities

17.7

35.4

68.8

Unrealised gains and losses on changes

(3.2)

(1.6)

Gain/loss on net monetary position (IAS 29, Hyperinflation)

4.1

5.8

Unrealised gains and losses on changes in the fair value of derivatives

6.1

(2.9)

Change in inventories

55.3

19.7

Change in trade receivables, trade payables and other receivables and payables

15.8(13.9)

73.0

71.0(60.2)(59.1)

Current tax expense

8.1

Taxes paid
Changes in deferred taxes and provisions

(4.5)

1.6

Net cash flows from operating activities

609.6

496.8

10 & 11(250.5)(252.5)

14

2.8

19.3

Acquisitions of subsidiaries, net of cash acquired

1.0

(0.5)

Deferred payment related to the acquisition of a subsidiary——(246.7)(233.7)

Disposals of property, plant and equipment and intangible assets

(0.4)

3.7

Acquisition of property, plant and equipment and intangible assets
Increase (decrease) in debt on fixed assets

Capital expenditure

Disposals

(0.4)

3.7

Increase in loans, deposits and short-term borrowings

—

(5.7)

Reduction in loans, deposits and short-term borrowings

0.7

13.7

0.7

8.0

(246.4)(222.0)20.1

0.0

Changes in loans and deposits

13

Net cash flows from (used in) investing activities
Capital increase (reduction)

16

Dividends paid

(13.1)

0.0

Transactions with shareholders of the parent company

7.0

0.0

Capital increases of subsidiaries subscribed by third parties—

7.2

Dividends paid to non-controlling interests by consolidated companies

(2.2)

(6.9)

Transactions with non-controlling interests

(2.2)

0.3

(40.9)

106.4

Increase (reduction) in bank overdrafts and other short-term borrowings

17

Increase in long-term debt

17

207.0

1 538.5

Reduction in long-term debt

17(228.5)(1 891.0)

Financial interest paid

(31.6)(70.4)

Change in gross debt

(94.0)(316.5)

Net cash flows from (used in) financing activities(89.2)(316.2)

Increase (reduction) in cash and cash equivalents

274.0(41.4)

Impact of changes in foreign exchange rates on cash and cash equivalents(17.1)

(1.5)

—

—

Opening cash and cash equivalents

219.2

262.1

Closing cash and cash equivalents

476.2

219.2

Impact of changes in fair value on cash and cash equivalents

6

CONSOLIDATED STATEMENT OF CHANGE IN EQUITY(in € million)

Note

Share capital

Share premium

Translation
reserve

Hedging
reserve

Other reserves
and retained
earnings

Equityattributable toshareholders

Noncontrollinginterests

Total equity

As of 31 December 2018

137.5

—

(34.5)(21.2)(58.9)

23.1

27.5

50.6

IFRS 16 (transition effect)

—

—

—

—

0.2

0.2

—

0.2

As of 1 January 2019
Other comprehensive income (loss)
Net profit (loss) for the year
Total comprehensive income (loss) for the year
Capital increase

137.5
—
—
—
251.7

—
—
—
—
1.8

(34.5)
6.7—
6.7—(21.2)(20.8)—(20.8)—(58.7)
(0.3)
115.6
115.3
—

23.3
(14.4)
115.6
101.2
253.5

27.5
0.4
9.0
9.4
—

50.8
(14.0)
124.6
110.6
253.5

Capital increase for the Group Savings Plan _ Verallia SA

11.0

76.6

—

—

(93.7)

(6.1)

6.1

—

—

—

—

—

9.5

9.5

(2.3)

7.2

16.1

—
—
—
—
—
400.2
—
—
—
3.6

—
—
—
—
—
78.4
—
—
—
16.5

—
—
—
0.2
—
(27.6)(104.8)—(104.8)
—

—
—
—
(0.4)
—
(42.4)
38.7
—
38.7
—

—
5.7
9.5
(10.0)—(22.4)(12.9)
202.1
189.2
—

—
5.7
9.5
(10.2)—
386.2(79.0)
202.1
123.1
20.1

(6.3)
—
6.4
(6.6)
(0.8)
33.4
(8.2)
7.5
(0.7)
—

(6.3)
5.7
15.9
(16.8)(0.8)
419.6(87.2)
209.6
122.4
20.1

16.1

12.9

73.3

—

—

1.3

87.5

—

87.5

—

—

—

—

(100.6)(100.6)(1.4)(102.0)

—
—
—
—
—
416.7

—
—
—
—
—
168.2

—
—
—
(16.6)—(149.0)

—
—
—
—
0.1
(3.6)

—
5.1
6.9
16.2
10.3
106.0

—
5.1
6.9
(0.4)
10.4
538.3

—
0.1
4.6
(0.1)
3.6
39.5

—
5.2
11.5
(0.5)
14.0
577.8

Capital increase for the Group Savings Plan _ Verallia
Packaging
Dividends / distribution of share premium
Share-based compensation
IAS 29 Hyperinflation
Other
Change in non-controlling interests
As of 31 December 2019
Other comprehensive income (loss)
Net profit (loss) for the year
Total comprehensive income (loss) for the year
Capital increase for the Group Savings Plan _ Verallia SA
Capital increase for receiving dividends in the form of newshares _ Verallia SA
Dividends / distribution of share premium
Cancellation of Treasury shares
Share-based compensation
IAS 29 Hyperinflation
Other
Change in non-controlling interests
As of 31 December 20207

NOTE 1 –INCORPORATION AND CREATION

1.1
1.1.1

INFORMATION ON THE GROUPCORPORATE NAMEAt 31 December 2020, the Company’s corporate name is “Verallia” and has been since 20 June 2019.
1.1.2

PLACE OF REGISTRATION AND REGISTRATION NUMBER

The Company is registered in the Nanterre Trade and Companies Register under number 812 163 913.
LEI: 5299007YZU978DE0ZY32
1.1.3

DATE OF INCORPORATION AND LENGTH OF LIFE OF THE COMPANY

The Company has been incorporated for a period of 99 years starting from its registration on 23 June
2015, unless it is dissolved early or extended on the joint decision of the shareholders in accordancewith the law and articles of association.
The financial year begins on 1 January and ends on 31 December of each year.
1.1.4

REGISTERED OFFICE, LEGAL FORM AND APPLICABLE LEGAL REGIMEThe Company’s registered office is located at 31 Place des Corolles, Tour Carpe Diem, Esplanade
Nord, 92400 Courbevoie, France.
At 31 December 2020, the Company is a société anonyme (limited company) governed by French
law.
1.2

OPERATIONS

Verallia is the leading European and world’s third-largest producer of glass packaging for food andbeverages, and offers innovative, customised and environmentally friendly solutions. The Group
posted €2.5 billion in revenue and produced 16 billion bottles and jars in 2020. Verallia employsaround 10,000 people and operates 32 glass production facilities in 11 countries.

BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL
STATEMENTSNOTE 2 –2.1

DECLARATION OF COMPLIANCE AND APPLICABLE FRAMEWORKThe Verallia Group’s consolidated financial statements for the period ended 31 December 2020 havebeen prepared in accordance with international accounting standards (IFRS) as published by the IASB
(International Accounting Standards Board) and adopted in the European Union in compliance with
European Regulation n°1606/2002 of 19 July 2002. They were approved by the Board of Directors on
23 February 2021.

8

International accounting standards include IFRS (International Financial Reporting Standards), IAS(International Accounting Standards) and their interpretations. This reporting framework can be foundon the European Commission’s website1.
The consolidated financial statements are presented in million of euros, with amounts rounded up or
down to the nearest million. So, rounding differences may appear between different financial
statements. In addition, adjustments may have been made in the notes to the financial statements in
respect of prior periods in order to conform to the presentation of the current year with no impact on
the financial statements.
The accounting principles applied are identical to those applied to the consolidated financial
statements at 31 December 2019 except for the following standards, amendments and interpretations
applied starting from 1 January 2020:
Amendments to IAS 39, IFRS 7 and IFRS 9: Interest Rate Benchmark Reform - Phase 1

1 January 2020

Amendments to References to the Conceptual Framework in IFRS Standards

1 January 2020

Amendments to IFRS 16 - Covid19 rent reductions

1 January 2020

Amendments to IFRS 3 Definition of a Company

1 January 2020

Amendments to IAS 1 and IAS 8: Amendment of the definition of “material”

1 January 2020

These new texts had no material impact on the financial statements.
Application of the Phase 1 amendments to IFRS 9/IAS 39 relating to the interest rate benchmark
reform, published in September 2019 and adopted by the European Union on 15 January 2020, will
not compromise interest rate hedging relations despite the reform.
The Group’s interest rate hedging relations subject to the interest rate benchmark reform are cash flow
hedges.
Hedged financing and hedging instruments are indexed to the Euribor and are not subject to an index
change.
Consequently, in the application of Phase 2 planned in 2021, the Group does not anticipate any
significant impact of the reform of benchmark rates on its financial instruments.
The necessary contractual changes will be made in fiscal year 2021.
The Group did not apply the following new standards, amendments and interpretations, which were
not yet effective:
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS PUBLISHED BUT NOT YET EFFECTIVE OR EARLYADOPTED BY THE GROUP
Amendments to IAS 39, IFRS 7 and IFRS 9: Interest Rate Benchmark Reform - Phase 2

1 January 2021

IFRS 17 Insurance Contracts

1 January 2023

2.2

EFFECTS OF COVID 19 PANDEMIC

Notwithstanding the Covid-19 pandemic and the government measures taken in different countries tocontain it, the Group managed to ensure business continuity in all its industrial sites.

1 https://ec.europa.eu/info/index_en9The assumptions and estimates used to evaluate certain items on the balance sheet and statement ofincome were revised to factor in the circumstances surrounding this public health and economic crisis.
Verallia Group’s Management paid particularly close attention to the following aspects:•

direct incremental costs,•

the cost of underutilised capacity,•

the valuation of goodwill and assets,•

the risk of hedge ineffectiveness,•factoring.

The corresponding accounting impacts, where material, are commented on in each of the associatednotes to these consolidated financial statements.
The Group also strengthened its liquidity position with support from a pool of banking partners. On
24 April 2020, it arranged an additional €250 million revolving credit facility with a one-year
maturity, extendable by six months at the Group’s discretion.
2.3

ESTIMATES AND JUDGEMENTS

In preparing consolidated financial statements, Management relies on estimates and assumptions that
may affect the amounts of assets, liabilities, income and expenses, as well as the information
presented in the notes. These estimates and assumptions are reviewed on a regular basis to ensure thatthey are reasonable in light of the Group’s history, economic conditions and the information available
to the Group. These estimates factor in continued uncertainty about the economic and public healthsituation created by the global Covid-19 pandemic. Actual results may differ from the estimates used.
Major sources of estimation uncertainty may result in significant adjustments to the amounts of assets
and liabilities in the subsequent year. Besides making use of estimates, the Group’s Management must
exercise judgement in selecting and/or applying the most appropriate accounting treatment for certaintransactions and activities and in defining the terms of its application.
The main estimates and judgements made by Management in preparing these consolidated financial
statements are as follows:
Management’s main judgements and estimates

Note

Assessment of the recoverable value of goodwill and fixed assets

9 & 12

Recoverability of deferred tax assets

8

Measurement of provisions and other financial liabilities

18.1

Measurement of defined benefit obligations and plan assets

19.1

2.4

VALUATION PRINCIPLES

The consolidated financial statements were prepared on a historical cost basis with the exception of:•

Certain financial assets and liabilities measured using the fair value model (Note 21);•

Defined benefit plan assets (Note 19.1).

10

ACCOUNTING PRINCIPLES
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.
The methods used to measure the fair value of financial and non-financial assets and liabilities as
defined above are classified according to the following three fair value levels:•

Level 1: fair value based on quoted prices (unadjusted) in active markets for identical assets
or liabilities.

•

Level 2: fair value measured using inputs other than quoted prices in active markets that are
observable either directly (price) or indirectly (price-derived data).

•

Level 3: fair value inputs for the asset or liability that are not based on observable market
data (unobservable inputs).

2.5

TRANSACTIONS IN FOREIGN CURRENCIESACCOUNTING PRINCIPLESThe Group’s presentation currency is the euro, which is also the functional currency of the Group’s
parent company. Each Group entity determines its own functional currency, and all its financialtransactions are then measured in that currency.
The financial statements of subsidiaries that have a functional currency other than the presentation
currency are translated using the closing rate method:•

Assets and liabilities, including goodwill and fair value adjustments in the context ofacquisition accounting, are translated into euros at the closing rate, i.e. the daily rate on theclosing date;•Statement of income and cash flow items are translated into euros at the average rate for theperiod, unless significant differences are recognised.

The resulting foreign currency translation differences are recognised in other comprehensive income,with a corresponding entry in the translation reserve in shareholders’ equity. When a foreign entity issold, the cumulative amount of foreign currency translation differences in equity relating to that
entity is reclassified to profit or loss.
Transactions denominated in foreign currency are converted into euros at the exchange rate
prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are converted at the closing rate, and the resulting translation differences are recognisedin the statement of income in financial income or expense. Non-monetary assets and liabilities
denominated in foreign currencies are translated at the exchange rate applicable on the day of thetransaction.

11

Differences arising from the translation of borrowings, loans or advances that are substantially partof the net investment in a foreign entity are recognised in other comprehensive income, with acorresponding entry in the translation reserve in equity and reclassified to profit or loss on disposalof the net investment.
Hyperinflation in Argentina
In 2018, Argentina was considered a “hyperinflationary” economy within the meaning of IFRS,
rendering IAS 29 Financial Reporting in Hyperinflationary Economies applicable.
Accordingly, the Group has applied IAS 29 since 1 January 2018. Adoption of IAS 29 requires therestatement of the non-monetary assets and liabilities, equity and statement of income of the Group’s
Argentine subsidiary in order to reflect the change in the purchasing power of its functional
currency. The gain or loss on the net monetary position is included in financial income or expense.
Moreover, the financial information for the Group’s Argentine subsidiary is translated into euros byapplying the exchange rate prevailing on the closing date of the relevant period.
On 20 March 2020, the IASB Interpretations Committee published its position with respect toaccumulated translation differences in a hyperinflationary economy. The Group therefore transferred
the translation differences accumulated on its Argentine subsidiary at 1 January 2018 to thetranslation reserve.
The rates selected for the main currencies were as follows:
2020
Closing rate

2019
Average rate

Closing rate

Average rate

Brazilian real (EUR/BRL)

6.35

5.88

4.50

4.41

Argentine peso (EUR/ARS)*

103.40

80.73

67.14

53.76

Russian rouble (EUR/RUB)

91.57

82.54

69.48

72.46

Ukrainian hryvnia (EUR/UAH)

34.74

30.78

26.71

28.93

* In accordance with IAS 29, all financial information is translated at the closing rate for subsidiaries located in a country
considered to be “hyperinflationary” (applicable to Argentina since 2018).

NOTE 3 –CONSOLIDATION METHODS AND SCOPE OF CONSOLIDATIONACCOUNTING PRINCIPLES
Basis of consolidation
The consolidated financial statements include the assets and liabilities, income and cash flows of theCompany and its subsidiaries. All balances and reciprocal transactions between companies
controlled by the Group are eliminated.
Subsidiaries are entities over which the Group has control. The Group controls an entity when it is
exposed or entitled to variable returns because of its relationship with the entity and has the ability toaffect those returns because of the power it holds over it. The interests acquired in these entities areconsolidated from the date on which control is transferred to the Group. They are deconsolidated
from the date on which the control ceases to be exercised. See Note 3.3 for more information on
associates.

12

3.1

CHANGES IN THE SCOPE OF CONSOLIDATIONACCOUNTING PRINCIPLESBusiness combinations
Business combinations are accounted for in accordance with IFRS 3 Business Combinations using
the acquisition method.
Goodwill corresponds to:•

the fair value of the consideration transferred; plus•

the amount recognised for any non-controlling interests in the acquiree; plus•

if the business combination is achieved in stages, the fair value of any pre-existing equity
interest in the acquired company; less•the net recognised amount (generally at fair value) of the identifiable assets acquired andliabilities assumed.

When the difference is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration for the acquisition is measured at fair value, which is the sum of the fair values, atthe acquisition date, of the assets transferred, the liabilities incurred or assumed, and the equity
securities issued in exchange for the acquisition of control of the acquired company. When theconsideration transferred by the Company in a business combination includes a contingent
consideration arrangement, the contingent consideration is measured at fair value. Subsequentchanges in the fair value of the contingent consideration corresponding to debt instruments arerecognised in profit or loss.
Acquisition-related costs are recorded as expenses when incurred and recognized in “Items related toacquisitions” in the consolidated statement of income.
At the acquisition date, the Group recognizes identifiable assets acquired and liabilities assumed(identifiable net assets) in the subsidiary, based on their fair value at that date (with some
exceptions). The assets and liabilities recognized may be adjusted for a maximum of 12 months fromthe acquisition date, based on new information gathered on the facts and circumstances existing at
the acquisition date.
For business combinations resulting in less than a 100% interest, the non-controlling interest in theacquired company (i.e. any interest that gives its holders the right to a share of the net assets of theacquired company), as at the acquisition date, is measured:•either at fair value, so that a portion of the goodwill recognized at the time of the
combination is allocated to the non-controlling interest (the “full goodwill” method);•or based on the share of the identifiable net assets of the acquired company, so that only
goodwill attributable to the Group is recognised (the “partial goodwill” method).

The method applied is selected depending on factors specific to each transaction.

13

In 2015, the Company, via its Verallia Packaging subsidiary, acquired substantially all the entities
and operations of Compagnie de Saint-Gobain’s Packaging division; non-controlling interests
acquired were measured according to the “partial goodwill” method.
Changes in equity interests (%) in subsidiaries without change of control
Transactions with non-controlling interests that do not result in a gain or loss of control areaccounted for as equity transactions – in other words, as transactions with shareholders acting in thatcapacity. The difference between the fair value of any consideration paid and the carrying amount of
the share of the subsidiary’s net assets acquired or disposed of is recorded in equity.
Commitments to purchase non-controlling interests
Commitments to purchase non-controlling interests result in the recognition in the financial
statements of a liability in “Provisions and other non-current financial liabilities”, which is thepresent value of the estimated exercise price of the put option on non-controlling interests, with acorresponding reduction in non-controlling interests and equity attributable to owners of the parent
company for the balance, if any. Any subsequent change in the fair value of the liability isrecognised through an adjustment to equity.
Assets and liabilities held for sale and discontinued operations
When the Group expects to recover the value of an asset or group of assets through its sale rather
than its use, the asset in question is presented separately on the “Assets held for sale” line in thestatement of financial position, in accordance with IFRS 5 Non-current Assets Held for Sale andDiscontinued Operations. Liabilities related to such assets, if any, are also presented on a separate
line of the statement of financial position (“Liabilities related to assets held for sale”).
Assets classified as such are measured at the lesser of the carrying amount or the fair value, less thecost of selling them. Assets classified as assets held for sale cease to be depreciated from the datethey qualify for classification as assets held for sale.

A discontinued operation is either a component of the Group from which it has separated or an
activity that is classified as held for sale and:•

which represents a separate major line of business or geographical area of operations; and•is part of a single, coordinated plan to dispose of a separate line of business or geographicalarea of operations; or•is an activity acquired exclusively for resale.

When an activity is classified as a discontinued operation, the comparative statement of income andstatement of cash flows are restated as if the activity had met the criteria for an activity that was
discontinued from the start of the comparative period.
In these financial statements, no non-current assets meet the criteria for classification as assets held
for sale and no operations were sold during the year.

14

ESTIMATES AND ASSUMPTIONS USED BY MANAGEMENT
The determination of the fair value of assets and liabilities at the acquisition date causes the Group to
make estimates using several methods with the help of independent valuation experts. Theseestimates are based on a number of assumptions and assessments.
The significant assumptions used to determine the allocation of fair value include the following
valuation methods: the cost approach, the revenue approach and the market approach. Thesemethods are based on cash flow projections and related discount rates, sector indices, market prices
for replacement cost and comparable market transactions.

3.1.1

Changes in 2020

There were no significant changes in the scope of consolidation.
3.1.2

Changes in 2019

There were no significant changes in the scope of consolidation other than the reorganisation
measures taken relating to the initial public offering.
3.2

LIST OF THE MAIN CONSOLIDATED COMPANIES
Entity% interest as of 31 December

Country
2020

2019

Consolidation method

Verallia SA

France100.0%

100.0%

Parent company

Horizon Holdings Germany

Germany

100.0%

100.0%

Full consolidation

Verallia Deutschland (ex SG Oberland Aktiengesellschaft)

Germany

96.8%

100.0%

Full consolidation

Rayen-Cura SAIC

Argentina

60.0%

60.0%

Full consolidation

Verallia Brasil ( ex SG Vidros SA)

Brazil100.0%

100.0%

Full consolidation

Inversiones Verallia Chile (ex Inversiones SG Chili)

Chile100.0%

100.0%

Full consolidation

Verallia Chile (ex SG Envases)

Chile

100.0%

100.0%

Full consolidation

Horizon Holdings Vitrum Spain

Spain

100.0%

100.0%

Full consolidation

Verallia Spain (ex SG Vicasa)

Spain

99.9%

99.9%

Full consolidation

Etablissements René Salomon

France100.0%

100.0%

Full consolidation

EverglassFrance100.0%

100.0%

Full consolidation

Saga Décor

France100.0%

100.0%

Full consolidation

Société Charentaise de Décor

France100.0%

100.0%

Full consolidation

Verallia France (ex SG Emballage)

France100.0%

100.0%

Full consolidation

Verallia Packaging (Horizon Holdings III)

France100.0%

100.0%

Full consolidation

VOA Verrerie d’Albi

France100.0%

100.0%

Full consolidation

Verallia Italia (ex Saint-Gobain Vetri Spa)

Italy

100.0%

100.0%

Full consolidation

Luxembourg

100.0%—%

Full consolidation

Verallia Polska ( ex Euroverlux Sp. Z.o.o)

Poland100.0%

100.0%

Full consolidation

Verallia Portugal (ex SG Mondego SA)

Portugal

99.9%

99.9%

Full consolidation

Kavminsteklo Zao

Russia

95.4%

98.6%

Full consolidation

Zao Kamyshinsky Steklotarny ZA

Russia

93.3%

96.5%

Full consolidation

Verallia Ukraine ( ex Consumers SKLO Zorya)

Ukraine96.8%

100.0%

Full consolidation

CAP Verallia

15

INVESTMENTS IN EQUITY-ACCOUNTED COMPANIES

3.3

ACCOUNTING PRINCIPLES
Associates
Associates are companies over which the Group exercises significant influence, i.e. the power toparticipate in financial and operating policy decisions, but without exercising control or joint control
over such policies. They are recognized in the consolidated financial statements using the equity
method.
Equity method
Under the equity method, an investment in an associate must initially be recognized at theacquisition cost and then adjusted based on the Group’s share of the profit or loss and, whereapplicable, its share of the associate’s other items of comprehensive income as well as dividends.
Goodwill is included in the carrying amount of the investment. Any losses or reversals of the valueof investments and any gains or losses on the sale of investments in equity-accounted investees arepresented under “Share of net income of associates” in the statement of income.
Gains from transactions with equity-accounted investees are eliminated via a corresponding entry ofequity-accounted securities in proportion to the Group’s interest in the entity. Losses are eliminatedin the same way as gains, but only insofar as they are not indicative of impairment.
The Group holds several interests in associates, none of which is of a significant individual size:
Main % interest as of 31 December
EntityCountry
2020

2019

Consolidation method

Vetreco SRL

Italy

40.0%

40.0%

Equity method

Cogeneradores Vidrieros

Spain

25.8%

25.8%

Equity method

Changes in investments in associates break down as follows:(in € million)

Year ended 31 December
2020
2019

Opening
Gross amount

0.6

0.6

Impairment——

Investments in associates – Net amount

0.6

0.6

Changes during the year
Translation differences——

Transfers, share issues and other movements
Dividend paid

—
—

0.7
—

Share of profit (loss) of associates

1.4

(0.7)

Total changes

1.4

0.0

Closing
Gross amount

2.0

0.6

Impairment——

Investments in associates – Net amount

2.0

0.6

16

The table below presents the main financial information concerning associated investments (presented
at 100%)(in € million)

Year ended 31 December
2020

2019

Equity6.6(1.6)

Total assets
Total revenue

32.4
30.4

39.7
48.3

Net profit (loss) for the year

2.0

(0.5)

NOTE 4 –SEGMENT INFORMATIONACCOUNTING PRINCIPLESDefinition of operating segments
In accordance with IFRS 8 Operating Segments, segment reporting must reflect the operating
segments for which results are regularly reviewed by the chief operating decision-maker (CODM) inorder to make decisions about resources to be allocated to the segments and to assess theirperformance.

4.1

BASIS FOR SEGMENTATION

In accordance with the provisions of IFRS 8 Operating Segments, the Group has identified thefollowing 3 operating segments corresponding to the geographical areas in which the assets arelocated:•Southern and Western Europe, including production sites located in France, Italy, Spain,
Portugal and Algeria (until May 2018). Verallia’s operations in this region are focused mainly
on bottles of still and sparkling wines and spirits containers, which are market segmentscharacterised by export-driven growth.

•

Northern and Eastern Europe, comprising sites located in Germany, Russia, Poland andUkraine. The Group’s activities in Northern and Eastern Europe are focused mainly on beerbottles, particularly in Germany, as well as food jars and bottles, largely for local markets.

•

Latin America, comprising sites located in Brazil, Argentina and Chile. The Group’s
activities in Latin America are focused mainly on bottles for still wines, a market segment
dominated by exports, as well as beer bottles, particularly in Brazil.

The above operating segments correspond to the reporting segments in the absence of consolidationby the Group.
This sector breakdown reflects the Group’s management organisation set up at the time of the initialpublic offering in 2019 and its internal reporting system as submitted to the Board of Directors, which
is Verallia’s chief operating decision-maker (“CODM”). This reporting method makes it possible toassess the performance of the operating segments, based on adjusted EBITDA, and to decide on the
allocation of resources, particularly investments.

17

KEY PERFORMANCE INDICATORS

4.2

The Group uses the following aggregates to assess the performance of the operating segments
presented:–

revenue, corresponding to the revenue presented in the consolidated financial statements.

–

capital expenditure, corresponding to the Group’s acquisitions of property, plant and equipment
and intangible assets.

–adjusted EBITDA, an indicator for monitoring the underlying performance of businesses adjusted
for certain non-recurring expenses and/or income liable to distort the company’s performance.

Adjusted EBITDA is calculated based on operating profit adjusted for depreciation, amortisation andimpairment, restructuring costs, acquisition and M&A costs, hyperinflationary effects, management
share ownership plans, subsidiary disposal-related effects and contingencies, plant closure costs andother items.
As it is an aggregate not directly presented in the consolidated statement of income, a reconciliation
with the consolidated financial statements prepared under IFRS is presented in accordance with theprovisions set out in IFRS 8:(in € million)

Notes

Year ended 31 December
2020

2019

Net profit (loss) for the year

209.6

124.6

Net financial income

45.8

115.9

Income tax

62.4

53.8

Share of net result of associates

(1.4)

0.7

Operating profit

316.4

295.1

Depreciation, amortisation and impairment

A

276.4

283.5

Restructuring costs

B

19.8

2.9

Acquisition and M&A costs

C

0.1

(2.1)

2.9

1.6

IAS 29, Hyperinflation (Argentina)
Management share ownership plan and associated costs

D

5.8

11.5

Closure of Sao Paulo plant

E

—

2.4

Other

F

4.3

20.3

625.7

615.2

Adjusted EBITDA

A.

Includes depreciation and amortisation of intangible assets and property, plant and equipment(Note 5.2), amortisation of intangible assets acquired through business combinations (Note6.1) and depreciation of property, plant and equipment (Note 6.2).

B.

Corresponds to transformation plan costs (Note 6.2), primarily in France in 2020.

C.

Corresponds to acquisition and M&A costs (Note 6.1). In 2019, this mainly includes thereversal of a provision for accrued RETT expenses recognised as part of the acquisition of the
Packaging division from Compagnie de Saint-Gobain in 2015.

D.

Corresponds to share-based compensation plans (Notes 5.2 and 19.3).

E.

Corresponds in 2019 to the closure of the Sao Paulo site (Brazil).

F.

Corresponds to various other non-recurring items:18

•in 2020, primarily donations and purchases of personal protection equipment made by theGroup during the Covid-19 crisis.

•

in 2019, primarily costs incurred due to the Group’s initial public offering.

Note that the Group does not monitor any segment liability indicator as financial debt is managed
centrally and not at the level of the three reporting segments.
4.3

SEGMENT INFORMATION
Year ended 31 December 2020(in € million)

Notes

Northern andEastern Europe

Southern andWestern Europe

Latin
America

Eliminations

Group
total
2 535.9554.4

1 744.5

237.0—Inter-segment revenue

10.4

2.4

0.4

(13.2)—

Total segment revenue

564.8

1 746.9

237.4(13.2)

2 535.9
625.7

Revenue from activities with external customers

5.1

126.5

419.1

80.1

—

o/w impact of IFRS 16

2.2

16.2

1.2

—

19.6

Capital expenditure*

54.2

175.2

21.1

—

250.5

Notes

Northern andEastern Europe

Southern andWestern Europe

Latin
America

Eliminations

Group
total

5.1

2 585.9

4.2

Adjusted EBITDA*Excluding rights of use under IFRS 16
Year ended 31 December 2019(in € million)

567.6

1 753.7

264.6—Inter-segment revenue

12.7

2.5

—

(15.2)—

Total segment revenue

580.3

1 756.2

264.6(15.2)

2 585.9
615.2

Revenue from activities with external customers

124.9

411.5

78.8

—

o/w impact of IFRS 16

2.4

16.6

1.2

—

20.2

Capital expenditure*

41.2

166.8

44.5

—

252.5

4.2

Adjusted EBITDA*Excluding rights of use under IFRS 16

4.4

BREAKDOWN OF REVENUE BY “END MARKET”

In accordance with IFRS 8.32, the Group presents below a breakdown of revenue according to the use
expected to be made of its glass packaging (notion of “end market” as defined internally):
Year ended 31 December(in € million)

2020

Still wines
Sparkling wines
Spirits
Beers
Food
Soft drinks
Others
Revenue

4.5

855.1
275.0
277.5
322.8
452.0
294.4
59.1
2 535.9

2019

838.8
307.5
318.6
328.5
425.7
300.3
66.5
2 585.9

ENTITY-LEVEL INFORMATION

In accordance with IFRS 8.33, revenue generated in France and internationally is presented in Note
5.1.
In addition, the geographical breakdown of non-current assets other than goodwill, customer
relationships and fair value adjustments to property, plant and equipment, as well as financial
instruments, deferred tax assets and post-employment benefit assets, is presented below.

19

Year ended 31 December(in € million)

2020

285.9
336.1
220.8
191.9
251.9
1 286.6

FranceItaly
Spain
Germany
Other countries
Total

2019

288.7
330.2
198.7
190.7
285.7
1 294.0

The Group does not monitor customer relationships by country, so they were excluded from theanalysis of non-current assets by country.
4.6

INFORMATION ABOUT THE MAIN CUSTOMERSNone of the Group’s customers individually accounted for more than 10% of revenue in 2020 or
2019.

NOTE 5 –5.1

OPERATING INCOME AND EXPENSES
REVENUEACCOUNTING PRINCIPLES
Verallia’s operations mainly concern the manufacture of glass packaging for beverages and foodproducts (bottles and jars).
In accordance with commercial practices and norms in the Group’s markets, commercial agreementswith customers generally do not involve a commitment in respect of purchase volumes or significant
penalties in the event of cancellation. In addition, no significant initial lump sum payments are
made. Thus, each order combined with a possible framework agreement represents a contract within
the meaning of IFRS 15. Contracts generally run for less than one year so, under the terms of IFRS
15, the order book is not presented. The costs of obtaining contracts are not material.
Each agreement contains a performance obligation corresponding to the delivery of bottles and jars.
The revenue generated from the sale of bottles and jars is recognised when the control of the asset istransferred to the customer, i.e. when the product is shipped or delivered, according to the incoterms.
In its operations, the Group does not resort to any intermediaries when selling goods to its customers
other than transport services. As a result, agent/principal analysis is not relevant.
Revenue is the amount receivable for goods provided in the normal course of business, excluding
amounts collected on behalf of third parties, such as sales taxes, goods and services taxes, and value
added taxes.

20

Moulds are recognised as property, plant and equipment insofar as their purchase does not constitutea separate performance obligation (no transfer of control to customers).
Contracts have no funding component since the time between revenue recognition and payment isgenerally short. As a result, the Group does not adjust the transaction price based on the time valueof money. Moreover, contract assets and liabilities are not material.

Revenue by country of origin
Year ended 31 December(in € million)

2020

2019

730.6
525.5
416.2
381.1
482.5
2 535.9

France
Italy
Germany
Spain
Other countries
Total revenue

760.0
514.5
407.3
388.7
515.4
2 585.9

The country of origin is the location of the entity invoicing the sales.
5.2

EXPENSES BY FUNCTION AND BY NATURE

ACCOUNTING PRINCIPLES
Cost of sales
Cost of sales includes all costs directly or indirectly related to the products sold. The main
components are the cost of raw materials, energy, wages and transport, and the depreciation of
production equipment.
Selling, general and administrative expense
Selling, general and administrative expenses include all expenses relating to general management,
marketing, finance and accounting, computer, legal, human resources, technical, and research anddevelopment activities.

The breakdown of cost of sales and selling, general and administrative expenses by type of expense is
as follows:(in € million)

Notes

Raw materials, energy, transport and other production costs

Year ended 31 December
2020

2019

(1 414.1)(1 506.8)

Personnel expenses

A(501.1)(485.1)

Depreciation and amortisation

B(213.8)(222.5)

Total cost of sales and selling, general and administrative expensesC(2 129.0)(2 214.4)

21

A.

Personnel expenses include:– €3.3 million in 2020 and €10.5 million in 2019 in respect of costs relating to postemployment benefits (Notes 19.1 and 19.2).
– €5.8 million in 2020 and €11.5 million in 2019 in respect of costs relating to share-based
compensation plans (Note 19.3).

B.

Includes amortisation of intangible assets and property, plant and equipment (Notes 10 and11), with the exception of customer relationships which are recognised in “Acquisitionrelated items”.

C.

Includes research and development expenses of €4.5 million in 2020 and €4.9 million in
2019.

NOTE 6 –6.1

OTHER OPERATING INCOME AND EXPENSESACQUISITION-RELATED ITEMSACCOUNTING PRINCIPLES
Acquisition-related items mainly cover the impact of the adjustments recognised in connection withthe purchase price allocation (amortisation of assets exclusively recognised through businesscombinations, such as customer relationships), as well as acquisition costs including miscellaneous
fees and due diligence costs in connection with actual or prospective acquisitions. These items arepresented separately from “selling, general and administrative expenses” on account of theirmateriality.

(in € million)

Notes

Year ended 31 December
2020

2019

Acquisition and M&A costs

A

(0.1)

2.1

Amortisation of intangible assets acquired through business combinations

B(60.3)(61.5)(60.4)(59.4)

Acquisition-related items

A.

The “Acquisition and M&A costs” line in 2019 consists primarily of the reversal of theprovision (€2.1 million) for German real estate transfer tax (RETT) relating to the acquisition
made in 2015.

B.

Represents the amortisation of customer relationships (original gross amount of €740 million)
over a 12-year useful life.

22

6.2

OTHER OPERATING INCOME AND EXPENSES

ACCOUNTING PRINCIPLESOther operating income and expenses reflect significant events occurring during the period that may
distort the reading of the company’s performance. They mainly include gains and losses on
disposals, impairment losses, significant litigation outside the normal course of business,
restructuring costs incurred upon the disposal or closure of operations, and costs in relation to
downsizing measures.
Other operating income and expenses break down as follows:(in € million)

Notes

Gains on disposals of assets

A

Reversals of asset impairment
Other income
Restructuring costs

B

Losses on disposals of assets and scrapped assets

Year ended 31 December
2020

2019
0.2

3.2

—

1.3

0.2

4.5

(19.8)

(2.9)

(3.4)

(1.9)

Impairment of assets

B

(2.3)

(2.0)

OthersC(4.8)(14.7)

Other expenses(30.3)(21.5)

Other expenses – net(30.1)(17.0)A.

In 2019, gains from asset disposals mainly concerned insurance refunds received relating toasset claims.

B.

In 2020, restructuring costs and asset impairments corresponded mainly to the transformation
plan carried out in France, including the costs related to the non-reconstruction of the furnace,asset impairments and redundancy aid measures totaling €19.8 million.

C.

This item consists mainly of donations and purchases of industrial protective equipment during
the Covid-19 public health crisis.
In 2019: mostly consisting of €10.3 million of external advisors’ fees in relation to the Group’s
initial public offering.

23

NOTE 7 –FINANCIAL INCOME AND EXPENSEACCOUNTING PRINCIPLES
Financial income and expense mainly includes interest expense on borrowings, accretion of financial
assets and provisions, financial expense related to pension plans and other post-employment
benefits, factoring fees, bank charges, changes in the fair value of derivative instruments notdesignated as hedging instruments, and unrealised and realised foreign exchange gains and losses. It
also includes interest on lease liabilities determined in accordance with IFRS 16 for all leases(excluding exemptions).
Financial income is mainly comprised of cash and cash equivalents.
Year ended 31 December(in € million)

Note

Interest expense excluding lease liabilities

A

2020

2019

(42.1)(75.5)

Interest expense related to lease liabilities

(1.7)

(2.1)

Amortisation of debt issuance costs, and other *(11.7)(16.2)—

3.1

Financial income from cash and cash equivalents and other

10.0

9.3

Cost of net debt

(45.5)(81.4)

Other debt-related gains and losses

B

Refinancing costs

C—(23.0)

Foreign exchange gains and losses

D

8.0

(0.2)

Net interest expense related to pension plans and other benefits

19.1

(0.9)

(1.8)

Profit (loss) on net monetary position in Argentina (IAS 29)

2.5

(7.4)

(9.5)

(45.8)(115.9)Net financial income (expense)*

Other: mainly corresponding to the amortisation of funding costs and debt issuance premiums, as well as factoring fees andother bank charges.

A.

Interest expenses on borrowings (Note 17) decreased by €33.4 million. This decrease wasmainly attributable to the capitalisation of the shareholder loan in September 2019 and thedebt refinancing arranged.

B.

In 2019, this item corresponded to IFRS amortisation of the fair value of the floor on the
repaid Term Loan B.

C.

In 2019, this item included accelerated amortisation of debt issuance costs relating to repaid
borrowings.

D.

The change mainly corresponds to local-currency foreign exchange impacts on the Brazilian
and Russian subsidiaries, and the effects of variations in foreign exchange derivatives.

24

NOTE 8 –INCOME TAXACCOUNTING PRINCIPLES
Income tax expense represents the sum of current tax and deferred tax.
Tax expense is calculated based on the tax laws in force or substantively in force as of the reporting
date in the countries where the Company and its subsidiaries operate.
The amount of current tax payable (or recoverable) is determined based on the best estimate of theamount of tax that the Group expects to pay (or recover) and reflecting any potential associateduncertainties.
The Group is subject to income tax in France, Spain, Germany, Italy and several other jurisdictions.
Current tax and deferred tax are recognised in profit or loss unless they relate to items that have beenrecognised in other comprehensive income or directly in equity. If current tax or deferred tax arises
from the initial recognition of a business combination, the tax effect is included in the recognition of
the business combination.
Deferred tax assets and liabilities are recognised on the basis of temporary differences between the
carrying amounts of assets and liabilities on the balance sheet and their respective tax values (withsome exceptions).
The impact of a change in tax rates and tax laws on deferred income tax assets and liabilities isgenerally recognized as tax income/expense over the period that the change was substantively ineffect. Deferred tax assets and liabilities are measured at the expected tax rates for the period ofrealization of the asset or settlement of the liability, based on tax rates and tax laws prevailing or
substantively in force on the reporting date.
Deferred tax assets are recognised in respect of deductible temporary differences, unused tax losses
and unused tax credits only if it is probable that the Group will have sufficient future taxable profits
against which they can be used. They are reviewed at each reporting date and are impaired if it nolonger appears likely that sufficient future taxable income will be available. To determine whether
deferred tax assets should be recognised in respect of tax loss carryforwards, the Group applies
various criteria that take into account the likely recovery period based on economic projections andthe strategy for recovering tax losses over the long term applied in each country.

ESTIMATES AND ASSUMPTIONS MADE BY MANAGEMENTManagement’s judgement is necessary to determine the extent to which tax losses can be recoveredby the Group, resulting in the recognition of a deferred tax asset. In assessing the recognition ofdeferred tax assets, Management considers whether it is more likely than not that they will be used.
Ultimately, deferred tax assets will be used if sufficient taxable income is available during periods inwhich temporary differences become deductible. Estimates of taxable profit and the use of tax loss
carryforwards are based on the earnings forecast in the budget, the medium-term plan and, if
necessary, supplementary estimates.

25

8.1

INCOME TAX

The table below shows the breakdown of income tax expense:
Year ended 31 December(in € million)

2020

2019

France

(8.4)

(8.2)

Outside France(64.6)(62.8)

Current tax(73.0)(71.0)

France8.3

13.0

Outside France

2.3

4.2

Deferred tax

10.6

17.2

Total income tax(62.4)(53.8)

8.2

ANALYSIS OF DEFERRED TAXES ON THE BALANCE SHEETIn the consolidated balance sheet, changes in net deferred taxes are as follows:Year ended 31 December(in € million)

2020

2019

Opening
Deferred tax (expense)/benefit
Changes in deferred taxes related to actuarial gains and losses IAS19
and the fair value of cash flow hedge
Translation and hyperinflation adjustments
Other(124.3)10.7(149.0)
17.2

(8.8)

7.8

3.6
(0.1)

—
(0.3)

Closing(118.9)(124.3)

The table below shows net deferred taxes by type:
Year ended 31 December(in € million)

2020

2019

Deferred tax assets

27.1

42.3

Deferred tax liabilities(146.0)(166.6)

Net deferred tax(118.9)(124.3)

20.9

19.7

(178.1)(206.7)

28.9

34.5

Other

9.4

28.2

Total

(118.9)(124.3)Pensions
Depreciation and amortisation, accelerated amortisation and regulated
provisions
Tax loss carryforwards

At 31 December 2020, the deferred tax losses carried forward recognised as assets amount to €28.9
million (€34.5 million at 31 December 2019) and are mainly related to France. These tax losses canbe carried forward indefinitely.
Under the Group’s business plans, tax loss carryforwards began being used in 2020 and will continue
to be used for a period of 3 years.
Taking into account the improved prospect of generating taxable earnings in the short term in Russia,
deferred tax assets were recognised in 2019 and 2020 for a portion of the tax losses.

26

Unrecognised deferred tax assets on losses carried forward, for €13.3 million (€15.7 million at 31
December 2019) mainly concern Chile.
8.3

TAX PROOF

The reconciliation between the income tax shown in the consolidated statement of income and thetheoretical tax that would be incurred based on the rate prevailing in the country where the parent
company of the Group (France) resides is as follows:
Notes(in € million)

Year ended 31 December
2020

2019

Profit (loss) before tax

270.6

179.2

Tax rate in France (%)

32.02 %

34.43 %

Theoretical tax expense(86.6)(61.7)

13.6

13.5

Non recognized deferred tax assets

2.3

1.6

Permanent differences

3.9

2.9

(6.9)

(8.6)

(0.3)

(2.1)

11.6

0.6

(62.4)(53.8)

Difference in tax rates between countries

A

Tax not levied on taxable profits

B

Withholding tax
Other

C

Total income tax

A.

This item corresponds mainly to improved earnings generation at subsidiaries with lower tax
rates.

B.

These taxes mainly include the CVAE tax in France and IRAP tax in Italy.

C.

This item corresponds mainly to the Patent Box tax regime in Italy authorised in 2020 withretroactive effect.
8.4

TAX CONSOLIDATIONThe calculation of income tax expense takes into account specific local rules applicable to Verallia
entities, including tax consolidation adopted by Verallia in France and Spain, as well as in Germany
under the country’s Organschaft rules.
In France, Verallia SA is the head of the French tax group.
8.5

UNCERTAINTY REGARDING TAX TREATMENT

Non-current liabilities relating to uncertain tax positions include risk estimations, litigation anddisputes, be they actual or probable, regarding the calculation of income tax. Any of the Group’s
entities may be subject to a tax audit or even be asked by the local tax authorities to makeadjustments. These requested adjustments along with any uncertain tax positions identified by theGroup give rise to the recognition of a liability, the amount of which is reviewed regularly inaccordance with the criteria set out in the IFRIC 23 interpretation Uncertain tax positions.
Following application of IFRIC 23, tax risk provisions have been reclassified to current tax liabilities
since 1 January 2019. These provisions amounted to €9.3 million at 31 December 2020 (€7.8 million
at 31 December 2019) and mainly concerned notifications of income tax adjustments received fromthe tax authorities. No other material uncertainty regarding tax treatment was identified.

27

NOTE 9 –GOODWILLACCOUNTING PRINCIPLESAt the acquisition date, goodwill is measured in accordance with the accounting standards applicableto business combinations, as described in Note 3.1.
For the purposes of impairment testing (Note 12), goodwill is allocated to the cash-generating unit
(or groups of cash-generating units) benefiting from the synergies of the business combination,
depending on the level at which the return on investments is monitored for internal management
purposes. A Cash Generating Unit (CGU) is the smallest identifiable group of assets generating cash
inflows that are largely independent of those generated by the entity’s other assets. CGUs are definedon the basis of industrial organization and correspond to countries.
In view of the Group’s activities, goodwill is tested at the level of groups of CGUs corresponding to
the Group’s operating segments (Note 4).
Goodwill is not amortised but is tested for impairment at each year-end or whenever events orchanges in circumstances indicate that it may be impaired.
Impairment losses affecting goodwill cannot be reversed. The methods applied by the Group to
perform impairment tests are described in Note 12.
The change in the net value of goodwill is as follows:(in € million)
As of 31 December 2019
Gross amount
Net amount
Changes during the year
Translation differences
Total changes
As of 31 December 2020
Gross amount
Net amount

NOTE 10 –Northern andEastern Europe

Southern andWesternEuropeLatin America

Total

99.8
99.8

378.5
378.5

72.6
72.6

550.9
550.9

—
—

—
—

(21.2)(21.2)(21.2)(21.2)

99.8
99.8

378.5
378.5

51.4
51.4

529.7
529.7

OTHER INTANGIBLE ASSETSACCOUNTING PRINCIPLESOther intangible assets mainly include customer relationships, patents, trademarks, software anddevelopment costs. They are carried at historical cost less accumulated amortisation anddepreciation. Intangible assets acquired in a business combination are recorded at fair value at theacquisition date.

28

Customer relationships are measured using the multi-period excess earnings method, in accordancewith IFRS 13 Fair Value Measurement. The useful life of customer relationships is estimated basedon the period during which the economic benefits of the asset are consumed. Customer relationships
identified during the acquisition of Saint-Gobain’s glass packaging division in 2015 are being
amortised on a straight-line basis over an estimated useful life of 12 years.
Costs incurred for in-house software development – mainly configuration, programming and testing
costs – are recognised as intangible assets and are generally amortised over a period of 5 years.
Patents and purchased computer software are amortised over their estimated useful lives, notexceeding a period of 20 years for patents and 3 to 5 years for software.
Research costs are expensed in the year in which they are incurred. Process development costs
meeting the recognition criteria of IAS 38 are included in intangible assets and amortised over theirestimated useful lives (not exceeding 5 years) from the date of first sale of the products to which
they relate.
Other intangible assets break down as follows:(in € million)
As of 31 December 2019
Gross amount
Cumulative amortisation and impairment
Net amount
Changes during the year
Changes in scope and transfers
Acquisitions
Disposals
Translation differences
Amortisation and impairment
Total changes
As of 31 December 2020
Gross amount
Cumulative amortisation and impairment
Net amount

NOTE 11 –Customer
relationships

Software

Other

Total

739.2
(258.3)480.9

24.3(14.3)

9.6
(1.3)

773.1
(273.9)

10.0

8.3

499.2

—
—
—
(11.4)(60.2)(71.6)

4.8
0.6
—
(0.1)
(4.1)

(4.7)
7.6
(0.2)
—
(0.6)

0.1
8.2
(0.2)
(11.5)(64.9)

1.2

2.1(68.3)

727.8(318.5)409.3

29.6(18.4)

12.3
(1.9)

769.7
(338.8)

11.2

10.4

430.9

PROPERTY, PLANT AND EQUIPMENTACCOUNTING PRINCIPLES• Property, plant and equipment
Property, plant and equipment is recorded at historical cost less accumulated depreciation andimpairment. This cost includes incidental expenses directly attributable to the acquisition. Property,
plant and equipment acquired in a business combination is carried at its fair value on the acquisition
date. Borrowing costs incurred for the construction and acquisition of property, plant and equipment
requiring a long period of preparation before it can be used are included in the cost of the associatedasset. Property, plant and equipment other than land is depreciated using the component approach ona straight-line basis over the estimated useful lives of:29

Main plants and office buildings
Other buildings
Machinery and other production equipment
VehiclesFurniture, accessories, computer and office equipment

30-40 years
15-25 years
5-16 years
3-5 years
4-16 years

Equipment notably includes the moulds used in the product manufacturing process. They are
depreciated on the basis of “beaten costs”, i.e. production units.
Government grants for purchases of property, plant and equipment are recognised as deferredincome under “Other current liabilities” and recorded in the statement of income as the asset isamortised.
• Leases
IFRS 16 defines a lease as a contract, or part of a contract, that conveys the right to control the use of
an identified asset for a period of time in exchange for consideration.
So it was decided that certain logistics management contracts including materials handling andinventory management services as well as the rental of sites dedicated to Verallia contain a lease
component in that the dedicated site corresponds to an identified asset, the Group obtains
substantially all the economic benefits generated by this asset and it has the right to control the useof the dedicated site.
The Group records a right-of-use asset and a lease liability on the lease’s start date. The right-of-use
asset is initially measured at cost then, subsequently, at cost less any cumulative depreciation andany cumulative impairment losses. The amount may be adjusted according to any remeasurement of
the lease liability.
The lease liability is initially measured at the present value of the lease payments outstanding at thelease’s start date. The discount rate applied corresponds to the interest rate implicit in the agreement
or, if that rate cannot be readily determined, at the incremental borrowing rate (based on terms andnot maturities). It is the latter that the Group generally applies as its discount rate.
The lease liability is subsequently increased by the interest expense and reduced by the amount ofrent paid. It is remeasured in the event of an amendment to future lease payments resulting from achange in an index or rate used to determine those payments, a new estimate of the amounts
expected to be paid under a residual value guarantee or, where applicable, a remeasurement on theexercise of an option to purchase the underlying asset or extend the lease term or on the non-exercise
of a termination option (which thus become reasonably certain).
The Group has opted to analyse assets and liabilities together in order to determine its deferred taxes.
A deferred tax liability was thus recognised for the net amount of taxable and deductible temporary
differences.
The Group’s main leases cover warehouses, offices, forklift trucks and other industrial equipment,
and vehicles, with the Group owning substantially all its property, plant and equipment. They are
essentially fixed-rent agreements (possibly with index clauses).
Lease terms for warehouses and offices vary by country.

30

The Group takes the following into account when assessing the reasonable certainty of renewal or
termination options being exercised:–

the financial conditions for the optional periods (attractive rents),–

with regard to property, their location (strategically located near Group factories and/or
client sites) and any alterations made to the layout,–

in some cases, the Group’s operational plans and their impact on the use of a leased property.

For equipment and vehicles, lease terms generally range from 3 to 6 years.
Property, plant and equipment break down as follows:Year Ended
31 December
2020
1 242.9
45.6
1 288.5

Note
Assets owned
Assets leased
Property, plant and equipment

A.

A
B

31 December
2019
1 247.0
52.3
1 299.3

The property, plant and equipment owned by the Group break down as follows:(in € million)

As of 31 December 2019
Gross amount
Cumulative depreciation and impairment

Land

Buildings

Machinery andequipment

Assets inprogress

Total

65.8

259.3

1 706.0

135.5

(0.9)

(83.7)(832.5)(2.5)

2 166.6(919.6)

Net amount
Changes during the period
Changes in scope and otherAcquisitions
IAS 29, Hyperinflation
Disposals
Translation differences
Depreciation and impairment
Transfers

64.9

175.6

873.5

133.0

1 247.0

—

0.2

1.9

—

2.1

—

1.6

42.9

197.8

242.3

0.4

3.4

4.2

0.5

8.5

—
(1.9)

(0.6)
(17.1)(2.0)(35.9)

—
(6.7)

(2.6)
(61.6)(0.1)(16.3)(176.4)(0.1)(192.9)

—

16.4

110.4

(126.7)0.1

Total changes
As of 31 December 2020
Gross amount
Cumulative depreciation and impairment(1.6)(12.4)(54.9)

64.8

(4.1)

64.1

249.3

1 779.7

199.8

2 292.9(0.8)(86.1)(961.1)(2.0)(1 050.0)

Net amount

63.3

163.2

818.6

197.8

1 242.9

B.

Rights of use break down as follows:
Buildings

Machineryand equipment

Net carrying amount as of 31 December 2019

39.4

12.9

—

52.3

Additions during the period

12.4

7.6

—

20.0

Reductions during the period

(7.1)

(1.3)

—

(8.4)

Depreciation during the period(10.9)(7.4)—(18.3)Net carrying amount as of 31 December 2020

33.8

11.8

—

45.6

(in € million)

31

OthersTotal

NOTE 12 –IMPAIRMENT OF GOODWILL AND FIXED ASSETS

The carrying amounts of goodwill and intangible assets with indefinite useful lives are tested for
impairment at least annually and whenever events or changes in circumstances indicate that they
may be impaired. Other fixed assets are tested for impairment whenever events or changes incircumstances indicate that they may be impaired. Such events or situations are related to material
and adverse changes affecting the economic environment and the assumptions or objectives
identified at the time of acquisition.
Fixed assets are tested at the level of the CGUs, corresponding generally to their respective
countries.
Goodwill is tested at the level of CGU groups, corresponding to the operating segments, i.e.
Southern and Western Europe, Northern and Eastern Europe, and Latin America. The breakdown of
goodwill generated at the time of the acquisition of Compagnie de Saint-Gobain’s packaging
activities in 2015 was based on the contribution of each group of CGUs to EBITDA.
When the carrying amount of CGUs or groups of CGUs exceeds their recoverable amount, an
impairment loss is recognised and allocated first to the carrying amount of any goodwill allocated to
the groups of CGUs.
The recoverable amount of the CGUs or groups of CGUs is the greater of the fair value net of exit
costs and the value in use, which is measured against their expected future discounted cash flows.
Impairment losses recorded against goodwill cannot be reversed through profit or loss. For property,
plant and equipment and other intangible assets, impairments recognised in previous periods may bereversed, taking into account the depreciation adjustment, if there is an indication that the loss ofvalue no longer exists and that the recoverable amount of the asset is greater than its carrying
amount.

ESTIMATES AND ASSUMPTIONS MADE BY MANAGEMENT
The assumptions, judgements and estimates on which impairment tests are based are the main
assumptions used to estimate recoverable amounts when calculating value in use (discount rate,
perpetual growth rate, expected cash flows), all of which depend on an assessment of the economic
and financial environment.
At 31 December 2020 and 2019, the recoverable amount of the groups of CGUs was determined on
the basis of value in use. No goodwill impairment was recognised in financial years 2020 or 2019.
Impairment tests were carried out based on revised future discounted cash flows reflecting theGroup’s current best estimate of the impact expected from the public health crisis and the economic
conditions expected to prevail post-crisis.
Cash flow projections
Projections of future cash flows correspond to the budget for the coming year, the strategic plan for
the following 2 years and an extrapolation for the fourth and fifth years.
The Group uses a number of macroeconomic assumptions to determine its cash flows: exchange rates,
GDP growth, inflation, and variations in commodity, energy and packaging prices. As regards energy,

32the Group establishes its assumptions based on expected variations in underlying energy price data
(Brent, TTF, NCG). These assumptions are determined using external data and by incorporating thehedging arrangements made.
In addition, the Group takes into account the schedule for maintenance stoppages (furnaces andmachines) and for rolling out the Performance Action Plan.
The extrapolation carried out for the two test years (years 4 and 5) is based on growth and margin
rates and WCR that are relatively close to those of the last year of the Plan.
Cash flows beyond this five-year period are extrapolated using a constant perpetual growth rate
determined on the basis of past performance and market growth forecasts.
The assumptions used to execute the plan are based on economic growth assumptions and consistent
with past performance.
Main assumptions used to estimate the value in use of each group of CGUs
Year ended 31 December
2020

2019

Southern and Western Europe
Discount rate
Perpetual growth rate

5.8 %
1.5 %

5.8 %
1.5 %

Northern and Eastern Europe
Discount rate
Perpetual growth rate

5.5 %
1.5 %

5.7 %
1.5 %

Latin America
Discount rate
Perpetual growth rate

12.5 %
1.5 %

9.1 %
1.5 %

The discount rate is the segment’s weighted average cost of capital (WACC) for each group of CGUs.
When carrying out impairment tests on the Latin America group of CGUs, uncertainty about the
inflation rate applicable in Argentina for the long term and the proven capacity of Argentine entity
Rayen Cura in 2020 to pass hyperinflation onto its selling prices prompted the Group to conduct
impairment tests based on the euro, as it did in 2019. A perpetual growth rate of 1.5% was used.
Sensitivity analysis
The Group has analysed the sensitivity of its impairment tests to the main assumptions used todetermine the recoverable amount of each group of CGUs to which the goodwill is allocated, namely
the discount rate, the long-term growth rate used to determine the terminal value and the terminalyear cash flows as they represent a significant portion of the recoverable amount.
For 2020, and for each of the three groups of CGUs, no impairment losses would be recorded in theevent of a 1 percentage point increase in the WACC, a 0.5 percentage point reduction in the perpetual
growth rate or a 10% decline in terminal-year cash flows.

33

NOTE 13 –OTHER NON-CURRENT ASSETS

The table below shows the breakdown of other non-current assets:
Year ended 31 December(in € million)

Notes
2020

2019

Equity securities

21

6.3

6.5

Loans, deposits and guarantees

21

20.7

26.8

19.1.2

3.8

4.1

—

0.1

30.8

37.5

Pension plan surpluses
Other
Total other non-current assets

Loans, deposits and guarantees include collateral and guarantee accounts for factoring agreements(Note 14.4). The table below shows changes in the net carrying amount of other non-current assets:(in € million)
As of 31 December 2019
Gross amount
Impairment
Net amount
Changes during the year
Increase (decrease)
Impairment
Translation differences
Transfers and other movements
Total changes
As of 31 December 2020
Gross amount
Impairment
Net amount

Equity securities

Loans, deposits
and guarantees

7.0
(0.5)
6.5

33.8
(7.0)
26.8

4.1
—

0.1
—

45.0
(7.5)

4.1

0.1

37.5

(0.1)
(0.1)
—
—
(0.2)

(5.2)
—
(0.9)
—
(6.1)

—
—
—
(0.3)

—
—
—
(0.1)

(5.3)
(0.1)
(0.9)
(0.4)

(0.3)

(0.1)

(6.7)

6.9
(0.6)
6.3

27.7
(7.0)
20.7

3.8
—

—
—

38.4
(7.6)

3.8

—

30.8

34

Pension plansurpluses

Other

Total

NOTE 14 –CHANGE IN NET WORKING CAPITAL

The change in net working capital in 2020 and 2019 was as follows:(in € million)

Notes

Inventories

14.1

Operating receivables
Operating liabilities

31 December
2019

Foreign
Impact of cash
exchange and
flows
other

31 December
2020

455.2

(55.3)(13.0)

14.2

169.0

(9.9)

(15.3)

143.8

14.3

(528.5)1.0

15.2(512.3)

Debts to suppliers of fixed assets
Operating working capital

386.9(91.8)(2.8)

3.2(91.4)

3.9(67.0)(9.9)(73.0)

Other receivables (non-operating)

14.2

9.9

(1.9)

6.9

14.9

Other liabilities (non-operating)

14.3(40.4)

1.3

25.3(13.8)

1.7(19.1)

0.6(16.8)

Total working capital(24.9)(86.7)

22.9(88.7)

Change in working capital(60.1)

Current tax assets and liabilities(63.8)

Reconciliation with the condensed consolidated
statement of cash flows:
Change in inventory

55.3

Change in trade receivables, trade payables and otherreceivables/payables

15.8

Current tax expense

73.0

Income taxes paid

(60.2)

Increase (decrease) in debt to suppliers of fixed assets

2.8

Total

86.7

14.1 INVENTORIESACCOUNTING PRINCIPLESInventories are carried at the lesser of their acquisition cost or probable net realisable value. The costof inventories includes purchase costs, production costs and other costs incurred to bring inventories
to their current location and condition. It is generally determined using the weighted average cost
method and, in some cases, the first-in, first-out method (FIFO). The probable net realisable value isthe sale price in the ordinary course of business, less estimated completion and sale costs. Inventory
acquired in a business combination is carried at its fair value on the acquisition date. The impact of
the sub-activity is excluded from inventory valuation.
Inventory can be impaired to reflect the loss in value of inventories. For inventories of finishedproducts, the provision generally relates to inventories whose realisable value is lower than the net
carrying amount, inventories not meeting marketing quality standards, and inventories whose slow
turnover is liable to result in deterioration.

35

The change in net inventories is as follows:
31 December(in € million)

2020

2019

Gross

Depreciation

Net

Gross

Depreciation

Net

Raw materials

130.3(19.0)

111.3

133.4

(16.9)

116.5

Inventories of work in progress

2.2

(1.8)

0.4

3.0

(1.9)

1.1

Finished goods

285.7(10.5)

275.2

345.6

(7.9)

337.6

Total inventories

418.2(31.3)

386.9

482.0

(26.7)

455.2

14.2 TRADE RECEIVABLES AND OTHER CURRENT ASSETSACCOUNTING PRINCIPLES
Accounting: Trade receivables are initially recognised at fair value and then measured at amortised
cost using the effective interest rate method, net of impairment losses (if any). As trade receivables
are generally due within one year, their nominal value is close to their fair value.
On the other hand, receivables with recourse (receivables that are not guaranteed by the factor
because they exceed the provisions of either the insurance or factoring arrangement) included in thefactoring programme are managed based on the “hold to collect and sell” business model and aremeasured at fair value in the balance sheet with a corresponding entry in other comprehensive
income.
Impairment: The impairment policy for trade receivables and related accounts is described in Note
21.
Year ended 31 December(in € million)

2020

2019

Trade receivables and related accounts

99.3

114.7

Advances to suppliers

4.1

4.6

Prepaid social security contributions

0.2

0.4

Other taxes paid in advance and recoverable (other than income taxes)

30.7

31.5

Other operating receivables

9.4

17.7

Other non-trade receivables

15.0

10.0

Other current assets

59.4

64.2

Trade receivables and other current assets

158.7

178.9

The change in the impairment of trade receivables is as follows:Year ended 31 December(in € million)

2020

2019

Opening balance

7.4

8.2

Additions

5.7

3.0

Reversals

(2.5)

(3.8)

Translation differences

(0.3)

—

Closing balance

10.3

7.4

36

The table below shows the ageing of trade receivables at 31 December 2020 and 2019:31 December(in € million)

2020

2019

Accounts receivable not yet due

90.8

106.1

Accounts receivable past due

8.5

8.6

Under 30 days

6.7

6.3

Between 30 and 90 days

0.5

0.9

Beyond 90 days

1.3

1.4

99.3

114.7

Total trade receivables (net amounts)

14.3 TRADE AND OTHER CURRENT LIABILITIESACCOUNTING PRINCIPLES
Trade payables and other current liabilities are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest rate method. Trade payables and related
accounts, other payables and accrued liabilities are generally due within one year, such that theirnominal value is close to their fair value.
Trade payables and other current liabilities break down as follows:
31 December(in € million)

2020

2019

Trade payables

367.5

383.6

Customer down payments

18.8

11.5

Debts on fixed assets

91.4

91.8

Grants received

5.3

6.2

Accrued personnel expenses

87.5

91.6

Tax liabilities (other than income tax)

11.7

16.5

Derivative liabilities

8.5

34.5

Other

26.8

25.0

Other current liabilities

250.0

277.1

Total trade payables and other current liabilities

617.5

660.7

37

14.4 FACTORINGACCOUNTING PRINCIPLES
Under a non-recourse factoring agreement, when the Group has transferred substantially all the risks
and rewards of ownership of the receivables, the receivables are derecognised from the consolidatedbalance sheet. When trade receivables are sold with limited recourse and substantially all the risks
and rewards of these receivables are not transferred, the receivables remain in the consolidatedbalance sheet. Cash inflows and outflows related to factoring agreements for which the Group does
not derecognise receivables are presented on a net basis as cash flows related to financing activities.
Contracts through which the Group derecognises receivables result in changes in trade receivables,
which are recognised as cash flows from operating activities.
In September 2015, the Group arranged a pan-European factoring programme with Eurofactor for a
maximum amount of €400 million (maturing in 2022) and covering the receivables of certain entities
within its two European segments. The Group also has local lines in certain countries (primarily
Brazil, Argentina and Russia) giving it access to additional financing of up to €50 million.
In accordance with IFRS 9, transferred receivables are derecognised when the factoring agreementtransfers the constructive rights to the cash flows and substantially all the associated risks and rewards(transfers of non-recourse receivables) to the assignee.
Year ended 31 December(in € million)

2020

2019

Assignment of receivables without recourse

302.4

313.9

Assignment of receivables with recourse

13.9

10.9

Total receivables assigned

316.3

324.8

Under factoring agreements, the risk of dilution is covered by establishing reserves and escrowaccounts in an amount corresponding to approximately 3% of the receivables transferred in 2020 and
4% of the receivables transferred in 2019. The amounts thus recorded in “Other non-current assets” at
31 December 2020 and 31 December 2019 were €11.2 million and €12.0 million, respectively.
In addition, the Group has entered into various reverse factoring programs offered by some of its
clients and amounting to €25.7 million in 2020 and €32.6 million in 2019.

38

NOTE 15 –CASH AND CASH EQUIVALENTS

ACCOUNTING PRINCIPLESCash and cash equivalents
Cash and cash equivalents consist of cash and short-term deposits held with other banks. Cashequivalents are short-term, highly liquid investments that are readily convertible into a known
amount of cash and subject to an insignificant risk of change in value.
Statement of cash flows
The statement of cash flows is prepared using the indirect method on the basis of consolidated net
income/loss and is broken down into three categories:–

Cash flows from operating activities: including taxes, acquisition costs relating totakeovers and payments received as grants;–

Cash flows from investing activities: in particular in the event of a takeover (excluding
acquisition costs), a loss of control (including transaction costs), acquisitions and disposals
of non-consolidated investments, associate companies and joint ventures, as well as
acquisitions and disposals of fixed assets (including fees and deferred payments) excluding
leases;–Cash flow from financing activities: including issuance and repayment of loans, issuanceof equity instruments, shareholder equity transactions (including transaction costs and any
deferred payments), interest paid (cash flows related to financial expense), treasury sharetransactions and dividends paid.

The balance of cash and cash equivalents is as follows:Year ended 31 December(in € million)

2020

2019

Cash

433.1

155.9

Cash equivalents

43.1

63.3

Total cash and cash equivalents

476.2

219.2

The Group has access to a portion of the cash held by certain subsidiaries through the payment ofdividends or through inter-company loans. However, local constraints may delay or restrict thisaccess, including monetary restrictions in some foreign jurisdictions.
The Verallia Group’s policy is to centralise the liquidity of its subsidiaries at Verallia Packaging where
possible.
Bank guarantees are disclosed in Note 23.2.

39

NOTE 16 –EQUITY

16.1 SHARE CAPITAL
The change in the number of shares and share capital was as follows:(in €)

Number of shares

Face value

Share capital

As of 31 December 2019

118 393 942

3.38

400 171 524

Capital Increase / Issue of ordinary share (25 June 2020)

1 064 999

3.38

3 599 697

Capital Increase / Issue of ordinary share (9 july 2020)

3 813 878

3.38

12 890 908

As of 31 December 2020

123 272 819

3.38

416 662 128

At 31 December 2020, the share capital amounted to €416,662,128.22 and consisted of 123,272,819
ordinary shares with a nominal value of €3.38 each.
•

Capital increase for the Group Savings Plan

A capital increase of a nominal amount of €3,599,696.62 was carried out on 25 June 2020 by issuing
1,064,999 ordinary shares with a nominal value of €3.38 each; the capital increase (share premiumincluded) thus amounted to €20,096,531.13 in total.
•

Capital increase for receiving dividends in the form of new shares

A capital increase of a nominal amount of €12,890,907.64 was carried out on 9 July 2020 by issuing
3,813,878 ordinary shares with a nominal value of €3.38 each; the capital increase (share premiumincluded) thus amounted to €87,490,361.32 in total.
Liquidity agreement
On 9 November 2020, the Company signed an amendment to the AMAFI liquidity agreement it hadreached with Rothschild Martin Maurel on 20 December 2019 for market-making purposes withrespect to its own shares on the regulated market of Euronext Paris. The liquidity agreement had taken
effect on 6 January 2020 for an initial term of 12 months, renewable by tacit agreement for successive
12-month periods.
An amendment to the liquidity agreement was signed on 9 November 2020 to increase the liquidity
account to €3.4 million. At 31 December 2020, the Company did not own any treasury shares.
16.2 TRANSLATION RESERVE
In financial year 2019, the €6.7 million increase in the translation reserve was primarily due to theappreciation of the Russian rouble and Ukrainian hryvnia.
In financial year 2020, the €104.8 million decrease in the translation reserve was primarily due to thedepreciation of the Brazilian real and Russian rouble.

40

16.3 EARNINGS PER SHARE
16.3.1 Basic earnings per share
Basic earnings per share were calculated based on the profit attributable to ordinary shareholders andthe weighted average number of ordinary shares outstanding:Year ended 31 December
2020
2019
Group’s share of net profit (loss) (in € million)
Number of shares

202.1

115.6

120 773 979

115 502 924

1.67

1.00

Basic earnings per share (in €)16.3.2 Diluted earnings per share
Diluted earnings per share were calculated based on the profit attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding after adjusting for the effects of all
potential dilutive ordinary shares:
Year ended 31 December
2020
2019
Group’s share of net profit (loss) (in € million)
Diluted number of shares

202.1

115.6

120 817 304

115 511 989

1.67

1.00

Diluted earnings per share (in €)The Group factored in the dilutive impact resulting from shares allocated under the share ownershipplans implemented in March 2020 and July 2019.

NOTE 17 –BORROWINGS AND FINANCIAL LIABILITIES

17.1 NET FINANCIAL DEBTNet financial debt includes all financial liabilities and derivatives on current and non-current financial
liabilities, minus the amount of cash and cash equivalents.
The table below shows the change in net financial debt:(in € million)
Non-current financial liabilities andderivatives
Current financial liabilities and derivatives
Gross debt
Cash and cash equivalents
Net debt

Note

Year ended 31 December
2020

2019

17.2

1 569.1

1 583.9

17.2

185.7
1 754.8(476.2)
1 278.6

225.9
1 809.8(219.2)
1 590.6

15

41

17.2 CHANGE IN GROSS FINANCIAL DEBT
Term Loan A
On 7 October 2019, the Group arranged a Term Loan A of €1,500 million refundable via a bullet
payment and maturing in October 2024. The applicable margin was initially set at Euribor + 175 basepoints (floor rate of 0%) with an upward or downward adjustment mechanism (margin ratchet). Thisratchet mechanism was activated with the applicable margin reduced to 150 base points starting fromthe month of August 2020. Since April 2020, the Term Loan A has been indexed to the 6m Euribor
rate.
Negotiable European Commercial Paper
The outstanding amount issued at 31 December 2019 was €188.2 million bearing an average interest
rate of 0.25%.
The outstanding amount issued at 31 December 2020 was €146.4 million bearing an average interest
rate of 0.26%.
Revolving credit facilities: changes and characteristics
At 31 December 2019, the Group had a single undrawn revolving credit facility of €500 million(RCF1).
–

On 20 March 2020, the Group drew €200 million from RCF1 for a 6-month period in case it
was unable to renew its maturing Neu CP since the market had almost closed down by theend of March. This draw was entirely repaid in September 2020.

–

On 24 April 2020, the Group arranged an additional €250 million revolving credit facility(RCF2) with a one-year maturity, extendable by six months at the Group’s discretion. The
margin applicable to this additional revolving credit facility was set at Euribor + 195 basis
points (floor rate of 0%). The following fees will also be due on the revolving credit facility:(i) a commitment fee due for the available credit commitment made by each lender under the
revolving credit facility agreement at a rate of 35% of the applicable margin and (ii)utilisation fees of 15 basis points, 25 basis points and 50 basis points above the margin for
amounts drawn from the revolving credit facility of less than 33.1/3%, between 33.1/3% and66.2%/3%, and above 66.2/3%, respectively.

–

At 31 December 2020, RCF1 and RCF2 remain undrawn.

42

Gross financial debt at 31 December 2020
At 31 December 2020, the two revolving credit facilities had not been drawn.
(in € million)

Notes

Revolving credit facility (floor0%) RCF2
Revolving credit facility (floor0%) RCF1
Term Loan A (floor 0%)

Notional or
maximum
amountCurrency

250.0

EUR

500.0

EUR

1 500.0

EUR

Contractualinterest rate

Euribor +1,95%
Euribor +1,10%
Euribor +1,50%

Effective
interest
rate

Final maturity

1.95%

Carrying amount as of 31
December 2020

Type offacility

Deferred
expenses andbond premiums

24/04/2021

Revolving

0.3

—

—

—

1.10%

07/10/2024

Revolving

2.4

—

—

—

1.64%

07/10/2024

Maturity

7.1

1 490.6

6.1

1 496.7

Non-current

Current

Total as of
31 December
2020

Lease liabilities
Other borrowings
Total long-term debt

17.5

30.6
41.3
1 562.5

16.3
4.5
26.9

46.9
45.8
1 589.4

Financial derivatives

20.1.2

6.6

0.3

6.9

1 569.1

27.2

1 596.3

146.4

146.4

12.1
158.5
185.7

12.1
158.5
1 754.8

Total long-term debt andderivative financial instruments
Negotiable commercial paper(NEU CP)
Other borrowings
Total short-term debt
Total borrowings

400.0

EUR
—
1 569.1

43

Gross financial debt at 31 December 2019
At 31 December 2019, the revolving credit facility had not been drawn.
Notional or
maximum
amountCurrency

Revolving credit facility

500

EUR

Term Loan A (floor 0%)

1500

EUR

(in € million)

Notes

Contractualinterest rate
Euribor +1,35%
Euribor +1,75%

Effective
interest
rate

Final maturity

Type offacility

Deferred
expenses andbond premiums

1.35%

07/10/2024

Revolving

3.0

1.90%

07/10/2024

Maturity

9.0

Carrying amount as of 31
December 2019Non-current
Current

Total as of
31 December
2019—
1 488.0

2.7

1 490.7

36.3

17.0

53.3

Other borrowings

50.4

6.5

56.9

Total long-term debt

1 574.7

26.2

1 600.9

9.3

0.3

9.6

1 584.0

26.5

1 610.5

188.2

188.2

11.2

11.2

—

199.4

199.4

1 584.0

225.9

1 809.9

Lease liabilities

Financial derivatives
Total long-term debt and derivative
financial instruments
Negotiable commercial paper (NEU
CP)

17.5

20.1.2400

EUR

Other borrowings

Total short-term debt
Total borrowings

44

17.3 THE GROUP’S DEBT STRUCTURE
Interest rates applicable to the Group’s entire portfolio of financial liabilities, after incorporating
derivative instruments, break down as follows:Year ended 31 December
2020
2019

(in € million)
Total fixed-rate borrowings

1 482.2

1 512.1

Total variable-rate borrowings

272.6

297.8

1 754.8

1 809.9

Total borrowings

17.4 DEBT REPAYMENT SCHEDULE
The maturity profile of the Group’s financial liabilities and derivatives is as follows:Year ended 31 December
2020
2019
185.7
225.9
1 548.5
1 559.8
20.6
24.2
1 754.8
1 809.9(in € million)
Less than one year
Between one and five years
More than five years
Total borrowings

At 31 December 2020, borrowings of under a year consisted primarily of €147 million of Neu CP(negotiable commercial paper) versus €188 million in 2019.
17.5 LEASE LIABILITIESAt 31 December 2020, lease liabilities amounted to €46.9 million.
Leases current
Terms Debts(in € million)
31 December 2019
Reductions during the period
Additions during the period
Capitalized Interests
Change in Group Structure
Other
31 December 2020

17.0
(8.5)
6.1
1.7
—
—
16.3

Leases noncurrent Terms
Debts
36.3
(19.6)
13.9
—
—
—
30.6

Lease debts
53.3(28.1)
20.0
1.7
—
—
46.9

The maturity profile for lease liabilities is as follows:(in € million)

Year ended 31 December 2020

Less than one year
In one to five years
In more than five years
Total lease liabilities

16.3
24.0
6.6
46.9

45

17.6 COVENANTS
Senior facilities
The Senior Facilities Agreement contains certain affirmative and negative covenants, for instance theGroup cannot:–

grant collateral;–

enable Group companies that are neither guarantors nor borrowers under the senior facilities
agreement to incur debt for a cumulative amount exceeding 20% of the Group’s consolidated
net debt;–

sell assets;–

conduct certain mergers, demergers, partial asset transfers and similar transactions; or–make changes to the type of business conducted by the Group,with each of these cases subject to stipulated minimum thresholds and exceptions typical in this typeof financing arrangement.
The Senior Facilities Agreement also includes affirmative commitments, for instance to maintaininsurance policies, comply with applicable laws, keep the borrowings at least at the same rank as theunsecured debts of the borrowers and guarantors under the Senior Facilities Agreement, require theGroup’s material subsidiaries to stand as guarantors under the Senior Facilities Agreement and ensurethat the consolidated EBITDA of all Group members standing as guarantors under the Senior
Facilities Agreement together accounts for at least 80% of the Group’s consolidated EBITDA (asspecified in the Senior Facilities Agreement). Last of all, the Senior Facilities Agreement requires
observance of a financial ratio threshold limiting the amount of debt that the Group’s members areable to contract. The Group is required to keep its leverage ratio (total net debt/pro forma consolidated
EBITDA) below or equal to 5x until the Senior Facilities Agreement expires; this ratio is tested at theend of each half-year period.
At 31 December 2020, no payment default had arisen or persisted under the Senior Facilities
Agreement.
Total net debt is defined in the senior facilities agreement as being the Group’s consolidated financial
debt excluding intra-group debt and obligations relating to interest rate and foreign exchange risk
hedging instruments, after deduction of cash and cash equivalents.
17.7 CHANGE IN DEBT
The change in financial debt in 2020 was as follows:
31 December
2019

Cash
inflows

Cashoutflows

Discount effects
and other*

Interest
expenseChange in thescope ofconsolidation

Translationdifferences

31 December
2020

Non-current financial
liabilities and derivatives

1 584.0

207.3(204.6)(13.2)

—

—

(4.4)

1 569.1

Current financial liabilities
and derivatives (excludinginterest)

222.4

(0.3)

(66.4)

22.1

1.7

0.8

(2.1)

178.2

Interest on long-term debt

3.5—

(30.0)

—

33.7

—

0.3

7.5

Current financial liabilities
and derivatives

225.9

(0.3)

(96.4)

22.1

35.4

0.8

(1.8)

185.7

Total financial liabilities

1 809.9207.0(301.0)

8.9

35.4

0.8

(6.2)

1 754.8(in € million)46

* Mainly consists of lease liabilities in application of IFRS 16

Reconciliation with the consolidated statement of cash flows
Increase (reduction) in bank overdrafts and other short-termborrowings
Increase in long-term debt
Reduction in long-term debt
Financial interest paid
Total

NOTE 18 –(40.9)
207.0

207.0

(228.5)(31.6)(301.0)PROVISIONS AND OTHER NON-CURRENT FINANCIAL LIABILITIESThe change in provisions in financial year 2020 breaks down as follows:
Provisions forclaims, litigationand other

Provisions forenvironmental
risks

Provisions for
restructuring andemployee benefit
expenses

Provisions forrisks relating
to associates

Other
risks

Total
provisions

Liabilities
relating toinvestments

Total provisions
and other
liabilities

Current portion

2.2

2.6

8.1

—

39.0

51.9

—

51.9

Non-current portion

5.9

10.4

0.9

3.9

6.1

27.2

15.9

43.1

Total provisions

8.1

13.0

9.0

3.9

45.1

79.1

15.9

95.0

Additions

3.9

0.2

21.6

—

1.6

27.3

—

27.3

Reversals (unused)

(0.5)

(0.2)

(2.9)

—

(1.9)

(5.5)

—

(5.5)

Reversals (used)

(1.7)

(0.2)

(4.4)

—

(7.0)

(13.3)—(13.3)

Other (reclassifications andtranslation differences)

(0.2)

1.5

(1.9)

(3.9)

(0.4)

(4.9)

(15.0)(19.9)

Total changes

1.5

1.3

12.4

(3.9)

(7.6)

3.7

(15.0)(11.3)

Current portion

3.3

2.6

20.4

—

33.6

59.9

—

59.9

Non-current portion

6.4

11.7

1.0

—

3.9

23.0

0.9

23.9

Total provisions

9.7

14.3

21.4

—

37.5

82.9

0.9

83.8

(in € million)

As of 31 December 2019

Changes during the period

As of 31 December 2020

18.1 PROVISIONS AND CONTINGENT LIABILITIESACCOUNTING PRINCIPLES
A provision is made when (i) the Group has a legal or current implicit obligation towards a thirdparty resulting from a past event, (ii) an outflow of resources will probably be necessary for theGroup to extinguish the obligation, and (iii) the amount of the obligation can be reliably estimated.
Provisions primarily concern obligations associated with litigation, restructuring plans and otherrisks identified with respect to the Group’s operations. Provisions with settlement dates that can bereliably estimated are discounted.

47

When a current obligation is unlikely to exist, the Group recognizes a contingent liability, unlessthere is little likelihood of an outflow of resources embodying an economic benefit.
Contingent liabilities assumed during a business combination are recognised at their fair value on theacquisition date.
Under applicable regulations on carbon dioxide (CO2) emission allowances, and in light of theGroup’s allowances deficit, the Group accordingly recorded provisions in financial years 2019 and2020.
When the Group is in deficit (CO2 allowances to be surrendered for CO2 emitted during the year inexcess of the stock of CO2 emission allowances allocated free of charge and featuring in the
securities accounts at the closing date), it recognizes a provision to cover the expected allowances
deficit so as to be able to surrender the allowances in April of the following year. Measurement of
the provision takes into account the price of forward purchases made for the following year and thespot price on 31 December of the current year for the balance not covered by forward purchases.
CO2 emission allowances allocated free of charge or purchased are recognized in the Group’s
inventory of raw materials.

ESTIMATES AND ASSUMPTIONS MADE BY MANAGEMENT
Estimates primarily concern valuations of liabilities and contingent liabilities, especially provisions
for litigation and other Group risks.
18.1.1 Provisions for claims, litigation and other
These provisions mainly concern provisions for claims, litigation and other commercial risks,primarily in France and Italy.
Litigation between Verallia Italia and Nelson Servizi
In December 2014, Verallia Italia, as a supplier, and Nelson Servizi, as a distributor, renewed theirpreviously agreed distribution contract and established mutual undertakings to sell and buy standard
and customised bottles for the Cuban market for the years 2015, 2016 and 2017.
During the last few months of 2015, the Group decided to cease all commercial activity for the Cuban
market starting from the second half of 2016. Verallia Italia therefore offered Nelson Servizi an outof-court settlement to terminate their ongoing relationship. In response, Nelson Servizi suspended all
payments to Verallia Italia.
In February 2016, Verallia Italia informed Nelson Servizi that said distribution contract would becancelled if Nelson Servizi did not settle its debts towards it. That same month, Verallia Italia received
a summons from Nelson Servizi ordering it (i) to fulfil its obligations under the distribution contractthat was renewed in December 2014, (ii) to compensate Nelson Servizi for damages resulting fromthe breach of the distribution contract and from Verallia Italia’s behaviour, and (iii) to compensate
Nelson Servizi for damages resulting from Nelson Servizi’s economic dependence on Verallia Italia.
Nelson Servizi thus requested that Verallia Italia be ordered to pay damages amounting to €11 million.
At the closing date, the litigation launched by Nelson Servizi remains under investigation.

48

The provision recognised in respect of this litigation stood at €4.3 million at 31 December 2020 and2019.
18.1.2 Provisions for environmental risks
Provisions for environmental risks cover the costs of environmental protection measures, asbestosrelated costs and the costs of waste disposal relating to the reconstruction of furnaces.
Asbestos-related litigation
Charges of gross negligence (inexcusable fault)
In France, since the late 1990s, several former and current employees of the Group or their assignees
have filed lawsuits against the Group’s French subsidiary, Verallia France, for gross negligence; theiraim has been to obtain damages, in addition to the compensation they received from the French social
security authorities, along with an increase in said compensation for occupational illnesses resulting
from their alleged exposure to asbestos-containing materials. In recent years, the French courts have
responded favourably to some of their demands.
At 31 December 2020, the amount provisioned in respect of these claims stood at €1.1 million.
Claims for compensation for anxiety
At 31 December 2020, 87 lawsuits had been filed by employees or former employees of the Group
claiming compensation for anxiety caused by their alleged exposure to asbestos-containing materials
at the Group’s French facilities.
At the closing date, none of the plaintiffs had claimed to have fallen ill as a result of exposure toasbestos-containing materials.
At 31 December 2020, the amount provisioned in respect of these claims stood at €1.5 million.
18.1.3 Provisions for restructuring and personnel expenses
Provisions for restructuring and personnel expenses amounted to €21.4 million at 31 December 2020and €9 million at 31 December 2019.
They mainly concern the transformation plan carried out in France, after the oldest of the threefurnaces at the Cognac facility was decommissioned, and redundancy aid measures.
18.1.4 Provisions for other risks
Provisions for other risks mainly concern the provision relating to the Group’s deficit with respect to
its CO2 allowances for the period covering Phase III (2013-2020) of the “Quotas Directive”, amended
by Directive 29/2009/EC.
With respect to provisions for CO2 allowance deficits, emission projections were calculated for Phase
III of the European plan ended in 2020 and based on the detailed estimates made periodically by theGroup’s industrial management. Management measures the Group’s capacity utilisation according toenergy prices (fuel and gas), the markets and any upgrades made to its production facilities.
Moreover, in order to secure the prices at which it will have to acquire allowances in 2021, and in
preparation for the end of Phase III, the Group has made forward purchases of carbon dioxide49allowances on the market for a total amount at 31 December 2020 of €28.5 million, corresponding to
its expected deficit. The settlement of forward purchases and delivery of allowances will result in acash outflow for the Group in 2021.
The Group’s allowances deficit recognised in 2020 was €31.1 million (€37.7 million in 2019).
Measurement of the provision takes into account the price of forward purchases made by the Groupand the spot price at the closing date for the balance not covered by forward purchases.
Under Phase IV (2021-2030), as defined by the Quotas Directive, the amount of allowances allocatedto the Group free of charge will be known precisely in the course of 2021 for the 2021-2025 period
and the start of 2026 for the 2026-2030 period. Despite the uncertainty surrounding the number ofallowances that will be allocated to it free of charge under Phase IV, the Group already expects thenumber allocated to it free of charge to be slightly lower than under Phase III and, in any case, it
believes it will probably not be allocated enough to meet its allowance return obligations in respect ofits carbon dioxide emissions, which means it will have to continue purchasing large amounts ofallowances on the market.
In preparation for Phase IV, the group has already made forward purchases of carbon dioxide
allowances on the market for a total amount at 31 December 2020 of €27.6 million.
18.1.5 Risks relating to associates
Context
In 2013, Verallia Brasil, a Company subsidiary, set up a joint venture governed by Brazilian law(Industria Vidreira de Nordeste – “IVN”) with a local partner, Ipiaram Empreendimentos e
Participações Ltda (Ipiaram). Verallia Brasil held a majority stake in this joint venture, the purpose ofwhich was to build and operate a glass manufacturing facility in the Brazilian state of Sergipe. The
plant came onstream in 2015.
Verallia Brasil’s shareholding was equity-accounted and then sold in October 2018.
Bank guarantees / Shareholder loans
In addition, at 31 December 2016, the shareholder loans traditionally granted to IVN by Verallia
Brasil were fully impaired in the amount of 55.6 million Brazilian reals (corresponding to €15 million
at the average exchange rate in 2016). In 2018, this impairment loss was fully recovered following thedisposal of the shareholding in the amount of 55.6 million Brazilian reals (corresponding to €13
million at the average exchange rate of 2018).
Disposal
The Group and Ipiaram completed the disposal of their shareholdings in IVN on 26 October 2018. A€14 million gain was recognised in financial year 2018 in respect of this disposal.
Arbitration
In January 2017, Ipiaram launched arbitration proceedings with the International Chamber ofCommerce (ICC) against Verallia Brasil regarding the interpretation of certain provisions in thepartnership agreements signed by the two parties; Ipiaram felt entitled to exercise the undertakings topurchase granted by Verallia Brasil under these partnership agreements. At the closing date, these
arbitration proceedings were still under way.

50

At 31 December 2019, Ipiaram’s claim was estimated at 104 million Brazilian reals in total damages(i.e. approximately €23 million at the closing exchange rate on 31 December 2019); the Group,
meanwhile, considered that there were no grounds for the claim.
On 18 June 2020, the court of arbitration delivered its final ruling and rejected all the claims made by
Ipiaram against Verallia Brazil. Ipiaram submitted a request for clarification with the aim ofoverturning the arbitration decision, but the request was rejected on 15 October 2020 and the ruling
was delivered to the parties concerned on 3 November 2020. The arbitration proceedings were
declared closed on 15 December 2020.
On 3 December 2020, Ipiaram commenced proceedings to annul the court of arbitration’s final ruling
and also requested interim proceedings to suspend the effects of the court of arbitration’s decision.
The court rejected this second request on 18 December 2020.
The Group deems it unnecessary to recognise any provisions in respect of this arbitration case given
the decisions handed down by the court of arbitration and legal authorities.
18.2 OTHER NON-CURRENT FINANCIAL LIABILITIESACCOUNTING PRINCIPLES
The other non-current financial liabilities primarily consist of put options granted to minority
shareholders in subsidiaries and liabilities relating to the acquisition of securities in the Group’s
companies, including additional considerations for acquisitions made. Liabilities relating to the put
options correspond to the present value of their estimated exercise price, with a corresponding
decrease in interests not conferring control and in equity attributable to owners of the parent
company. Any subsequent change in the fair value of the liability is recognised through an
adjustment to equity.
Verallia Deutschland AG
On 31 December 2019, other non-current financial liabilities included a liability towards Verallia
Deutschland AG’s minority shareholders.
At 31 December 2020, the Group held 96.76% of the capital and voting rights in Verallia Deutschland
AG, its German-listed subsidiary (96.74% at 31 December 2019).
In December 2016, Verallia Deutschland AG, as the controlled entity, and Horizon Holdings Germany
GmbH, as the controlling entity, signed a Domination and Profit & Loss Transfer Agreement(“DPLTA”) approved by the local authorities.
After signing this agreement, and in accordance with applicable German law, Horizon Holdings
Germany GmbH had agreed to purchase all the Verallia Deutschland AG shares it did not already own
for €433.02 per share, but certain minority shareholders in Verallia Deutschland AG disputed thevaluation on the basis of which this price per share had been established. A liability relating to the
obligation to buy out these minority shareholders had been recognised for a total present value of€12.9 million at 31 December 2019. This amount was based on the assumption that 100% of minority
shareholders would tender their shares to the offer made by Horizon Holdings Germany GmbH topurchase their shares for €433.02 per share as proposed in 2016.
Moreover, the Domination and Profit & Loss Transfer Agreement provides for annual flat-ratecompensation (in the form of dividends per share paid each year) payable to Verallia Deutschland51

AG’s minority shareholders. A liability relating to the obligation to pay this compensation for 5 years
had therefore been recognised in 2016 for a total present value of €2.1 million at 31 December 2019.
The minority shareholders also disputed the amount of annual flat-rate compensation provided for insaid agreement.
On September 24, 2018, the Stuttgart district court rejected the requests made by the minority
shareholders. The minority shareholders appealed, and the case was sent to the Stuttgart regional highcourt which rejected the appeal filed by the minority shareholders on 4 May 2020. No further recourse
has been possible since July 2020.
As a result, in July 2020, the liability in respect of the obligation to buy out minority interests wasreversed at its current value (i.e. €14 million) with a corresponding increase in shareholders' equity.

NOTE 19 –PROVISIONS FOR PENSIONS AND OTHER EMPLOYEE BENEFITS

Provisions for pensions and other employee benefits break down as follows:(in € million)

Notes

Annuities payable to plan beneficiaries
Flat-rate compensation
Post-employment medical benefits
Provisions for pensions and other liabilities
Other long-term benefits
Provisions for pensions and other employee benefits

19.1
19.2

31 December
2020

2019

82.2
41.5
6.3
130.0
4.0
134.0

80.8
42.1
5.9
128.8
4.2
133.0

The Group’s workforce breaks down as follows:
31 December
2020
Managers

2019
968

903

Administrative employees

2 199

2 207

Other employees

6 468

6 595

Total

9 635

9 705

The workforce presented corresponds to the average number of people employed by the Group over
the year.

52

19.1 PENSION LIABILITIES AND OTHER POST-EMPLOYMENT BENEFIT LIABILITIESACCOUNTING PRINCIPLESDefined benefit plans
Defined benefit pension plans refer to plans where the Group is committed officially or through animplicit obligation to an amount or level of benefits and therefore bears the associated medium- or
long-term risk.
After retiring, the Group’s former employees are entitled to pension benefits in accordance withapplicable laws and regulations in the respective countries in which the Group operates.
Supplemental pension liabilities also apply in some of the Group’s companies, in France and also inother countries. The group’s liabilities with respect to pensions and retirement benefits are
established at the end of the reporting period with the assistance of independent actuaries, on an
actuarial basis, using the projected unit credit method which incorporates projected final salaries onretirement and economic conditions in each country. These liabilities can be funded by pension
funds or plan assets, and a provision is recognised in the consolidated balance sheet for the portion
not funded by assets.
The Group contributes to defined benefit plans which determine the level of retirement benefits anemployee will receive on their retirement. These plans mainly concern Germany, Spain, Italy andFrance.
In France, employees receive retirement benefits depending on their years of service and their lastsalary on the date of their retirement. This flat-rate amount is determined according to the applicablecollective agreement.
Retired former employees in Spain and Germany receive benefits other than retirement benefits, forinstance for healthcare. The Group’s obligations under these plans are calculated on an actuarial
basis and provisions are recognised accordingly in the consolidated balance sheet.
Remeasurements of the net defined benefit liability (asset), comprising actuarial gains and losses, thereturn on plan assets (excluding amounts factored into the calculation of net interest on net
liabilities) and the change in the effect of the asset ceiling (if any, excluding amounts factored into
the calculation of net interest on net liabilities), are recognised immediately in “Other
comprehensive income”.
Provisions are also made, on an actuarial basis, for other long-term employee benefits such as longservice awards and bonuses in various countries. Actuarial gains and losses relating to these otherlong-term benefits are recognised immediately in the statement of income.
Interest expenses relating to these liabilities and returns on the corresponding plan assets are valuedby the Group using the discount rate applied to estimate the liability at the start of the period, and arerecognised in financial income as “net interest expense relating to pension plans and other benefits”.
Defined contribution plans
Defined contribution pension plans are those for which the Group’s only obligation is to pay acontribution, but the Group has no obligation as regards the level of benefits paid.
Contributions into defined contribution plans are expensed as incurred.

53

ESTIMATES AND ASSUMPTIONS MADE BY MANAGEMENT
The present value of defined benefit pension liabilities depends on a certain number of factors thatare determined on an actuarial basis using assumptions about population growth andfinancial/economic factors. The assumptions used to calculate defined benefit pension liabilities andnet pension costs include the discount rate and the rate of future salary growth. To establish theseestimates and assumptions, Management takes advice from external consultants and actuaries. Any
material change in these assumptions could result in a material change in the personnel expenses
recognised in the consolidated statement of income and in the remeasurements recognised in othercomprehensive income offset against equity.
19.1.1 Main economic and financial assumptions used to measure defined benefit pension
liabilities and plan assets
Pension liabilities and other post-employment benefit liabilities are calculated on an actuarial basis
using the projected unit credit method applied to estimated final salaries.
i. Rate assumptions
Assumptions about mortality, staff turnover and salary growth factor in economic conditions andpopulation trends in each individual country.
Discount rates are established by region depending on the bond yields of high-quality companies atthe end of the financial year. The discount rates used for the Group’s main plans are as follows:Year ended 31 December(In %)

2020

Discount rate
Salary increases including long-term inflation

2019

0,5 à 0,7%

0,7% à 0,9%

1,8% à 2,3%

1,8% à 2,5%

1.5 %

1.5 %

Long-term inflation rateii. Sensitivity analysis
The sensitivity analyses carried out imply the following outcomes for defined benefit pension
liabilities:
Year ended 31 December(in € million)

2020

2019

Impact of 0.5% increase in discount rate

(10.0)(11.6)

Impact of 0.5% decrease in discount rate

11.1

13.1

Impact of 0.5% increase in inflation rate

9.3

10.7

19.1.2 Change in pension liabilities and other post-employment benefit liabilities
i Net carrying value of the provision
The table below shows defined benefit pension liabilities relating to the Group’s pension liabilities
and other post-employment benefit plans along with the corresponding plan assets:54

(in € million)

Year ended 31 December

Notes

Provisions for pensions and other post-employment benefit liabilities

2020

19

2019

130.0

128.8

Pension plan surpluses

(3.8)

(4.1)

Net pension liabilities and other post-employment benefit liabilities

126.2

124.7

ii Liability analysis
The total amount of the Group’s pension liabilities and other post-employment benefit liabilities
breaks down as follows:
31 December 2020(in € million)

Spain

Germany

Other
WesternEuropeancountries

31 December 2019

Other

Average duration (in years)
37.7

Defined benefit liabilities - unfunded
plans

5.5

Deficit (Surplus)

Spain

Germany

Other
WesternEuropeancountries

Other

Total

13.3

Defined benefit liabilities - fundedplans

Fair value of plan assets

Total

0.2
82.5

41.4

82.5

40.6

(40.7)
2.5

37.9

42.1

0.6

130.0

3.6

(41.7)(45.4)

0.6

126.2

0.3

(1.0)

Asset ceiling
Net pension liabilities and otherpost-employment benefit liabilities

14.1
0.1
82.7

42.0

82.7

41.1

42.2
0.6

128.9

0.6

124.7

(1.0)

(46.4)

—

—

126.2

124.7

iii. Plan assets
Plan assets primarily consist of insurance policies. They are invested in low-risk assets.
iv. Change in pension liabilities and other post-employment benefit liabilities
Changes in pension liabilities and other post-employment benefit liabilities break down as follows:55

(in € million)

As of 31 December 2018
Fluctuations during the year
Current service cost
Net interest expense
Reductions/settlements
Past service cost*
Contributions to the pension plan
Translation differences
Employee benefit expenses recognised in theincome statement
Payment of benefits
Business combination
Remeasurement of net liabilities (net assets)
Other
Total movements during the year
As of 31 December 2019
Fluctuations during the year
Current service cost
Net interest expense
Reductions/settlements
Past service cost
Contributions to the pension plan
Translation differences
Employee benefit expenses recognised in theincome statement
Payment of benefits
Business combination
Remeasurement of net liabilities (net assets)
Other
Total movements during the year

Notes

7

7

As of 31 December 2020

Pension liabilities
and other post- Fair value of plan
employment
assetsbenefit liabilities

Net pension
liabilities andother postemployment
benefit liabilities

158.3(46.9)

111.4

2.3
2.5
(0.4)
7.1
—
0.1

—
(0.7)
—
—
0.4
—

2.3
1.8
(0.4)
7.1
0.4
0.1

11.5

(0.4)

11.2

(9.1)
—
10.3
—
12.8

3.2
—
(2.3)
—
0.5

(5.9)
—
8.0
—
13.3

171.1

(46.4)

124.7

3.3
1.0
—
—
—
(0.1)

—
(0.1)
—
—
—
—

3.3
0.9
—
—
—
(0.1)

4.2

(0.1)

4.1

(9.7)
—
2.3
—
(3.2)

3.1
—
1.7
—
4.7

(6.6)
—
4.0
—
1.5

167.9

(41.7)

126.2* Service costs expensed in financial year 2019 concern changes to France’s national collective agreement which took effect in October2019.

19.2 OTHER LONG-TERM BENEFITSDefined benefit pension liabilities are generally calculated on an actuarial basis according to the same
method as for pension liabilities.
At 31 December 2020, provisions for other long-term employee benefits primarily included longservice awards payable by the subsidiaries in France amounting to €2.2 million (€2.3 million at 31
December 2019) and bonuses amounting to €1.4 million in Germany (€1.5 million at 31 December2019).

56

19.3 MANAGEMENT SHARE OWNERSHIP PLAN
19.3.1 Share ownership plan
The Group’s compensation policy is aimed at retaining and motivating talented employees, and at
involving managerial staff in its performances, mainly through a long-term incentive plan in the formof bonus share awards subject to performance criteria linked to the Group’s long-term strategy.
For this purpose, when the Group listed on the regulated market of Euronext Paris, it set up a
performance share allocation plan spanning a period of three years from 2019 to 2021 (the“2019/2021 Plan”), corresponding to at most 1% of the Company’s share capital and allocated inthree tranches.
The final allocation of shares each year under the 2019/2021 Plan is decided subject to (a) thecontinued employment of the employee or executive concerned and (b) performance criteria that are(i) 70% dependent on targets set for adjusted EBITDA and net debt before dividend payouts and sharebuybacks, measured over the previous two years combined, and (ii) 30% dependent on theachievement of a share performance target, starting from the Company’s initial public offering,
relative to the share performances of companies listed in the SBF 120 index on Euronext Paris.
A first allocation of shares corresponding to a maximum of 0.33% of the Company’s share capital was
made in July 2019 subject to performance criteria being met.
A second allocation of shares corresponding to a maximum of 0.33% of the Company’s share capital
was made in March 2020 subject to performance criteria being met.
At 31 December 2020, the number of potential ordinary shares under these plans was 523,652.
19.3.2 Management share ownership plan 2015 and 2017
When Compagnie Saint-Gobain’s Packaging division was acquired in 2015, the Company’s
shareholders set up a share ownership plan for Verallia’s Management (“Management ShareOwnership Plan 2015”) in order to align Management’s interests with those of the shareholders and toenable the Company’s Management to share in Verallia’s long-term growth.
Certain key executives were given the opportunity to invest in both ordinary shares and preference
shares in Horizon Intermediate Holdings S.C.A (“Horizon Intermediate”), a holding company
upstream of the Company, on the date of the acquisition, 29 October 2015. Thereafter, in 2017,
another share ownership plan (“Management Share Ownership Plan 2017”) was set up to offer asimilar opportunity to other key managers.
Investments in ordinary shares and preference shares were carried out pari passu and settled in equity
instruments, so they were not expensed in the income statement, in accordance with IFRS 2 Sharebased payment.
On 7 October 2019, the Company carried out the merger-acquisition of Horizon Intermediate
Holdings S.C.A., the Company’s parent company with 100% of its capital. Members of Management
along with other key managers having subscribed to the 2015 and 2017 Management ShareOwnership Plans thereby became shareholders in the Company on that date.
19.3.3 Bonus preference shares
Bonus shares were granted to members of the Management and other key managers, leading to therecognition of costs for share-based payments, based on a number of bonus preference shares I and a57

number of bonus preference shares II obtained in Horizon Intermediate Holdings S.C.A under theManagement Share Ownership Plan 2015 and Management Share Ownership Plan 2017, respectively.
Subsequent to the Company’s merger-acquisition of Horizon Intermediate Holdings S.C.A, theCompany’s parent company, members of the Management and other key managers eligible for bonus
preference share programmes became shareholders in Verallia SA.
19.3.4 Accounting impacts
Fair values applied to these share ownership plans were measured taking the features of these plans
into account. Expenses incurred in relation to these plans and associated costs recognised in the
consolidated statement of income were €5.8 million for the financial year ended 31 December 2020.
Expenses incurred in relation to these plans and associated costs recognised in the consolidated
statement of income were €11.5 million for the financial year ended 31 December 2019.
19.4 GROUP SAVINGS PLANS
In financial year 2016, Verallia Packaging SAS, a fully consolidated subsidiary of the Verallia Group,
set up an employee investment fund, the Verallia FCPE (Fonds Commun de Placement), invested inshares in Verallia Packaging SAS. This fund was an option to invest offered to employees of theGroup’s entities participating in the Group’s savings plan, either through a Group Savings Plan set up
between Verallia Packaging SAS and the Verallia Group’s French entities or an International Group
Savings Plan set up between Verallia Packaging SAS and the Verallia Group’s non-French companies.
In 2019 and 2018, the non-French companies that participated in the International Group Savings Plan
were Spain, Germany, Portugal, Poland and Brazil.
On 7 October 2019, the Verallia FCPE transferred to the Company all the ordinary and preference
shares it held in the capital of the Verallia Packaging subsidiary, i.e. 3.52% of its capital (versus
2.89% at 31 December 2018), in exchange for new ordinary shares in the Company corresponding to
2.74% of its capital.
On 25 June 2020, a capital increase reserved for employees was carried out under the Group Savings
Plan (PEG) and International Group Savings Plan (PEGI). Employees subscribed to the operation
either via the Verallia FCPE in the case of those located in France, Brazil, Poland and Portugal, or
directly in the case of those located in Germany, Spain, Italy and Chile.
The number of shares subscribed under this capital increase was 1,064,999.
At 31 December 2020, employee shareholders - whether direct shareholders or shareholders throughthe Verallia FCPE - held 3.2% of Verallia’s share capital as a result of capital increases reserved for
employees carried out under the PEG and PEGI.

58

NOTE 20 –FINANCIAL RISK MANAGEMENTThe Group’s financial risk management strategy aims to minimise the impact of volatility in interest
rates, energy prices and exchange rates on its costs and cash flows, while maintaining the financial
flexibility the Group needs to successfully roll out its commercial strategies.
20.1 LIQUIDITY RISKIn a crisis scenario, the Group might not be able to obtain the financing or refinancing needed to coverits investment plans from the credit or equity markets, or it might not be able to do so on acceptableterms.
The Group’s overall exposure to liquidity risk is managed by the Group’s treasury and financedepartment. The table below shows the contractual deadlines applicable to the Group’s financial
liabilities, including its interest payments.
31 December 2020
Note

Carrying
amountContractual
cash
flows

Less than
1
year

1 to 2years

2 to 5years

Morethan 5
years

Current and non-current portion of long-term debt (includinginterest)

17

1 589.4

1 697.1

58.9

61.0

1 556.6

20.6

Other liabilities, including derivative financial instruments

17

6.9

5.9

3.7

2.2

Short-term debt

17

158.5

158.5

158.5

Total borrowings

17

1 754.8

1 861.5

221.1

63.2

1 556.6

20.6

Trade payables and related accounts

14.3

367.5

367.5

367.5

Other payables and accrued liabilities, including commodity
derivative financial instruments

14.3

250.0

250.0

249.7

—

0.3

2 372.3

2 479.0

838.3

63.2

1 556.9(in € million)

Total financial liabilities

20.6

The Group had two revolving credit facilities at 31 December 2020, the undrawn €500 million RCF1
and the undrawn €250 million RCF2.
31 December 2019(in € million)

Note

Carrying
amountContractual
cash
flows

Less than1
year

Current and non-current portion of long-term debt (includinginterest)

17

1 600.9

1 749.9

57.8

Other liabilities, including derivative financial instruments

17

9.6

9.6

Short-term debt

17

199.4

199.4

199.4

Total borrowings

17

1 809.9

1 958.9

257.2

Trade payables and related accounts

14.3

383.6

383.6

383.6

Other payables and accrued liabilities, including commodity
derivative financial instruments

14.3

277.0

277.0

277.0

2 470.5

2 619.5

917.8

Total financial liabilities

1 to 2years
50.1

2 to 5years
1 617.8

Morethan 5
years
24.2

9.6

50.1

1 627.4

24.2

50.1

1 627.4

24.2

At 31 December 2019, the Group had a revolving credit facility with an undrawn amount of €500
million.

59

20.2 MARKET RISKS
20.2.1 Interest rate risk
The Group’s overall exposure to debt-related interest rate risk is managed by its Treasury and Finance
Department. The subsidiaries using derivative instruments generally do so with Verallia Packaging as
the counterparty. The Group’s policy is to secure the cost of its medium-term debt against the risk ofan increase in interest rates, while optimising its cost.
In August 2018, the Group hedged a large portion of its exposure to a rise in the Euribor rate throughinterest rate swaps of a nominal value of €1,500 million and maturing in August 2022.
In October 2019, after repaying some of its debt, the Group unwound €250 million of interest rate
swaps.
31 December 2020
Interest rates

Interest rate swaps
Total interest rate derivative financial instruments

Notional
amount incurrency
millions
1 250.0

31 December 2019

Fair value

Notional
amount incurrency
millions

Fair value(6.2)

1 250.0

(9.1)

(6.2)

(9.1)

Interest rate derivative instruments: derivative instruments hedging interest rate risk are referred toas cash flow hedging instruments.
The hedging strategy is set up in such a way as to align the main characteristics of the underlying withthose of the derivatives, so the inefficiency to be recorded is non-significant for the periods presented
herein.
Thus, a 50 bp variation in interest rates (6m Euribor for 2020 and 1m Euribor for 2019), projected
forward to the closing date, would have the following impact on profit:(in € million)

2020

2019

Impact of 50 base point (bp) increase

—

(0.4)

Impact of 50 base point (bp) decrease——

20.2.2 Currency risk
Currency risk includes the following:Transaction risk: occurring during the normal course of business. The Group mostly operates
locally, and most of its receivables and payables are denominated in the subsidiary’s functional
currency.
Financial risk: occurring during the normal course of business for certain financial liabilities
denominated in a currency other than the functional currency.

60

31 December 2020
Change - devise

Currency derivatives - EUR/CLP
Currency derivatives - EUR/USD
Currency derivatives - EUR/GBPCurrency derivatives - EUR/ARS
Currency derivatives - USD/ARS
Currency derivatives - USD/BRL

Notional amountin currency
millions

Fair value

22.9/20 739
11.6/13.5
8.6/7.8
1.9/227
4.2/448
6.5/35

(0.8)
0.3
—
(0.1)
(0.4)
(0.2)

Total currency derivative financial instruments(1.0)

31 December 2019
Notional amountin currency
millions

Fair value

Currency derivatives - EUR/BRL

6.6/31.3(0.2)

Currency derivatives - EUR/GBP

7.9/6.9(0.2)

Currency derivatives - USD /BRL

6.2/25.3(0.1)

Currency derivatives - EUR/RUB

18.0/1310(0.7)

Change - devise

Other

0.1

Total currency derivative financial instruments(1.1)

Currency derivative instruments: derivative instruments hedging transaction and financial currency
risks are referred to as fair value hedging instruments.
Translation risk: occurring as a result of the consolidation in euros of the financial statements ofsubsidiaries that have a different functional currency. Any fluctuation in the exchange rates of thesecurrencies against the euro has an impact on the Group’s equity. The Group’s main exposures are to
the Argentine peso, the Brazilian real and the Russian rouble.
2020

Groups's equity
Euro appreciation+10%(13.6)(4.8)(5.6)(in € million)
Brazilian real
Argentine peso
Russian rouble
2019

Euro depreciation
-10%
16.6
5.8
6.8

Groups's equity
Euro appreciation+10%(23.0)(5.0)(7.0)(in € million)
Brazilian real
Argentine peso
Russian rouble

61

Euro depreciation
-10%
19.0
4.0
5.0

20.2.3 Commodity risk
The Group is exposed to variations in the prices of the commodities and energy it uses in its
operational activities. The Group may sometimes limit its exposure to fluctuations in energy prices byusing swaps to hedge some of its energy purchases. Energy hedges (excluding purchases at fixedprices negotiated directly with suppliers by the procurement department) are arranged, as far as
possible, by the Group’s treasury and finance department in accordance with the instructions received
from the Group’s procurement department and in keeping with the directives established by the Boardof Directors.
31 December 2020
Commodities

Notional
amount incurrency
millions

Commodity derivatives fuel swaps (€)
Commodity derivatives gas swaps (€)
Commodity derivatives electricity swaps (€)

Fair value
—
(1.5)
4.9

6.8
105.4
40.0

Total commodity derivative financial instruments

3.4
31 December 2019
Notional
amount incurrency
millions
16.5
124.4
11.1

Commodities

Commodity derivatives fuel swaps (€)
Commodity derivatives gas swaps (€)
Commodity derivatives electricity swaps (€)
Total commodity derivative financial instruments

Fair value
2.8(31.9)(0.9)(30.0)

Energy derivative instruments: derivative instruments hedging the risk of fluctuations in energy
prices are referred to as cash flow hedging instruments. The hedging strategy is set up in such a way
as to align the main characteristics of the underlying with those of the derivatives, so the inefficiency
to be recorded is non-significant for the periods presented herein.
20.2.4 Financial counterparty risk
The Group may be exposed to the risk of a default by one of the banking counterparties that manages
its cash or any of its other financial instruments, as such a default could result in a financial loss for
the Group. Application of IFRS 13, Fair value measurement, requiring the incorporation ofcounterparty risk when measuring derivative instruments, had no material impact on the Group’s
financial statements at 31 December 2020 and 2019.

62

NOTE 21 –FINANCIAL INSTRUMENTS

ACCOUNTING PRINCIPLES
Initial recognition and measurement
Trade receivables are initially recognised when they are created. All other financial assets andliabilities are initially recognised when the Group becomes a party to the contractual provisions of
the instrument.
A financial asset or financial liability is initially measured at fair value plus, in the case of an item
not measured at fair value through profit or loss (“FVTPL”), the transaction costs that are directly
attributable to its acquisition or issue. A trade receivable with no significant financing component isinitially measured at its transaction price.
Classification and subsequent measurement
Financial assets
At initial recognition, a financial asset is classified as having been measured either at amortised cost,at fair value through other comprehensive income (“FVOCI”) with a distinction made between debt
instruments and equity instruments, or at fair value through profit or loss (“FVTPL”).
Financial assets are not reclassified after initial recognition unless the Group changes its businessmodel for managing financial assets, in which case all financial assets affected are reclassified on thefirst day of the first financial year following the change in business model.
A financial asset is measured at amortised cost if it meets the following two conditions and is notdesignated as at FVTPL:–

it is held as part of a business model whose objective is to hold assets in order to collectcontractual cash flows; and–its contractual terms give rise, on specified dates, to cash flows that are solely payment ofprincipal and interest on the principal amount outstanding.

A debt instrument is measured at FVOCI if it meets the following two conditions and is notdesignated as at FVTPL:–

it is held as part of a business model whose objective is achieved both by collecting
contractual cash flows and selling financial assets; and–its contractual terms give rise, on specified dates, to cash flows that are solely payment ofprincipal and interest on the principal amount outstanding.

At initial recognition of an equity instrument that is not held for trading, the Group has theirrevocable option to present subsequent adjustments to the fair value of this instrument in othercomprehensive income. This choice is made for each instrument.
All financial assets not classified as being measured at amortised cost or at FVOCI using the method
described above are measured at FVTPL. This includes all derivative financial assets (see below). At
initial recognition, the Group has the irrevocable option to designate a financial asset that would
otherwise meet the conditions to be measured at amortised cost or at FVOCI as being at FVTPL, if
this designation makes it possible to eliminate or significantly reduce an accounting mismatch thatwould otherwise have arisen.

63

Financial assets – assessing whether contractual cash flows are solely payment of principal andinterest
For the purposes of this assessment, the term “principal” is defined as being the fair value of thefinancial asset at initial recognition. “Interest” is defined as being the consideration of the time valueof money, the credit risk associated with the principal amount outstanding during a particular periodof time, and other basic lending risks and costs (for example, liquidity risk and administrative
expenses), as well as the profit margin.
The Group takes into consideration the instrument’s contractual terms when assessing whether
contractual cash flows are solely payment of principal and interest.
Financial assets – subsequent measurement and gains and losses
Financial assets These assets are then measured at their fair value. Net gains and losses,
at FVTPL
including any interest income or dividends, are recognised through profit or loss.
However, see Note 20 for derivative instruments designated as hedging
instruments.
Financial assets These assets are then measured at amortised cost using the effective interest
at amortised
method. Impairment losses are deducted from the amortised cost. Interest
cost
income, currency gains and losses, and impairment losses are recognised
through profit or loss. Any gains or losses from derecognition are recognised
through profit or loss.
Debt
instruments at
FVOCI

These assets are then measured at their fair value. Interest income calculatedusing the effective interest method, currency gains and losses, and impairment
losses are recognised through profit or loss. Other net gains and losses arerecognised through other comprehensive income. At derecognition, cumulative
gains and losses in other comprehensive income are reclassified to profit or loss.

Equityinvestments at
FVOCI

These assets are then measured at their fair value. Dividends are recognised asincome in profit or loss, unless the dividend clearly corresponds to the recovery
of some of the cost of the investment. Other net gains and losses are recognisedin other comprehensive income and are never reclassified to profit or loss.

Financial liabilities – classification, subsequent measurement and gains and losses
In accordance with IFRS 9, financial liabilities are classified as being measured at amortised cost or
at FVTPL. A financial liability is classified as being at FVTPL if it is considered to be held for
trading, whether it is a derivative or was designated as such at initial recognition. Financial liabilities
at FVTPL are measured at fair value and the resulting net gains and losses, including any interest
expense, are recognised through profit or loss. Other financial liabilities are subsequently measured
at amortised cost using the effective interest method. Interest expense and currency gains and losses
are recognised through profit or loss. Any gains or losses resulting from derecognition are also
recognised through profit or loss.
See Note 20 for financial liabilities designated as hedging instruments.
Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from thefinancial asset expire, or it transfers the rights to receive the contractual cash flows in a transactionin which substantially all the risks and rewards of ownership of the financial asset are transferred, or64

it neither transfers nor retains substantially all the risks and rewards of ownership and does not retain
control over the financial asset.
The Group carries out transactions through which it transfers assets recognised in its balance sheet
but retains all or substantially all the risks and rewards of ownership of the transferred assets. In suchcases, the transferred assets are not derecognised.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged orcancelled, or they expire. The Group also derecognises a financial liability when its terms are
modified and the cash flows of the modified liability are substantially different, in which case a new
financial liability based on the modified terms is recognised at its fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguishedand the consideration paid (including any non-cash assets transferred or liabilities assumed) is
recognised in profit or loss.
When a financial liability measured at amortised cost is modified without being derecognised, a gainor loss is recognised through profit or loss. The calculated gain or loss corresponds to the difference
between the original contractual cash flows and the modified cash flows discounted at the original
effective interest rate.
Derivative financial instruments and hedge accounting under IFRS 9
The Group holds derivative financial instruments to hedge currency risk, interest rate risk,
commodity risk and energy risk. Embedded derivatives are separated from the host contract andconsidered separately if the host contract is not a financial asset and if certain criteria are met.
Derivatives are first measured at their fair value. Subsequent to initial recognition, derivative
instruments are measured at their fair value and changes therein are generally recognised in profit orloss.
The Group designates certain derivative instruments as being hedging instruments to hedge thevariability of cash flows relating to highly probable forecast transactions resulting from movements
in exchange rates, interest rates, commodity prices or energy prices. At inception of a designatedhedging relationship, the Group documents the risk management objective and the strategy forundertaking the hedge. The Group also documents the economic relationship between the hedged
item and the hedging instrument, including whether variations in cash flows from the hedged itemand hedging instrument are expected to offset each other.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes
in the fair value of the derivative is recognised in other comprehensive income and accumulated in
the hedging reserve. The effective portion of changes in the fair value of the derivative recognised inother comprehensive income is limited to the cumulative change in the fair value of the hedged item,
determined using the present value, as from inception of the hedge. Any ineffective portion ofchanges in the fair value of the derivative is recognised immediately in profit or loss.
If a hedged forecast transaction subsequently results in the recognition of a non-financial item, suchas inventory, the amount that has been accumulated in the hedging reserve is included directly in theinitial cost of the non-financial item when it is recognised.
For all other hedged forecast transactions, the amount that has been accumulated in the hedging
reserve is reclassified to profit or loss in the same period(s) as when the hedged forecast future cash
flows affect profit or loss.

65

If the hedge no longer meets hedge qualifying criteria or if the hedging instrument is sold, expires, isterminated or exercised, hedge accounting is then discontinued prospectively. If hedge accounting of
cash flow hedges ceases to apply, the amount that has been accumulated in the hedging reserve
remains recognised in equity until, in the case of the hedging of a transaction giving rise to therecognition of a non-financial item, it is included in the cost of the non-financial item on its initialrecognition or, in the case of other cash flow hedges, until it is reclassified to profit or loss in thesame period(s) as when the hedged forecast cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, the amounts that have been
accumulated in the hedging reserve are immediately reclassified to profit or loss.
Impairment of receivables
The Group recognizes impairment losses for Expected Credit Losses (ECL) for:–financial assets measured at amortised cost; and–contract assets.

Impairments for losses on trade receivables and contract assets are measured at an amount equal tofull lifetime ECL.
To determine whether the credit risk of a financial asset has increased significantly since initialrecognition, and to estimate ECL, the Group considers reasonable and supportable information thatis relevant and available and does not involve undue cost or effort. This consists of quantitative andqualitative information and analyses based on the Group’s past experience and on an informed credit
assessment, including prospective information.
Impairments for losses on financial assets measured at amortised cost are deducted from the grosscarrying amount of the assets.
The gross carrying amount of a financial asset is written off if the Group has no reasonable
expectation of recovering the financial asset in its entirety or a portion thereof. The Group
individually makes an assessment with respect to the timing and amount of write-off based onwhether there is a reasonable expectation of recovery. The Group expects no significant recovery
from the amount written off. However, financial assets that are written off could still be subject torecovery procedures in accordance with the Group’s credit policy.

ESTIMATES AND ASSUMPTIONS MADE BY MANAGEMENT
As indicated above, the Company uses estimates to determine impairments for trade receivables.

66Classification and fair value measurement
Financial assets and liabilities are classified as follows:
31 December 2020
Accounting categories

Amortisedcost(in € million)

Notes

Equity investments - nongroup

13

Loans, deposits and receipts

13

20.7

Trade receivables and related accounts (excluding
current tax receivables)

14.2

138.2

Derivative instruments hedging financial risk
Derivative instruments hedging operating risk (*)
Cash and cash equivalents

Fair value measurement based on:

Fair value
Fair value
through other
Mandatorily atthrough othercomprehensive
fair value
comprehensive
income –throughincome – debt
equityprofit or loss
instruments
instruments

Fair value –hedging
instruments

6.4

Level 1:
pricesquoted on
activemarkets

Carrying
amountLevel 2:significant
observable
inputs6.4

13.9

Level 3:significant
nonobservable
inputs6.4

Total
financial
instruments
at fair value

6.4

20.7

20.7

20.7

152.1

152.1

152.1

20.2

0.1

0.1

0.1

0.1

14.2 & 20.2

11.5

11.5

11.5

11.5

15

Total financial assets

433.1
592.0

43.1
6.4

13.9

43.1

11.6

476.2

462.7

13.5

667.0

462.7

197.9

476.2
6.4

667.0

Term Loan A and revolving credit facility(unused)17(1 496.7)(1 496.7)(1 496.7)(1 496.7)

Financial liabilities on finance leases

17(46.9)(46.9)(46.9)(46.9)

Other long-term liabilities

17(37.8)(45.8)(45.8)

Total long-term debt
Derivative instruments hedging financial risk (**)

(1 581.4)

—

(8.0)

—

(1 581.4)

—

(8.0)

—

20.2

Total long-term debt and instruments
Negotiable commercial paper (NEU CP)

17(146.4)

Other short-term liabilities

17

(6.2)

Total short-term debt
Derivative instruments hedging operating risk (*)(8.0)(152.6)

—
(6.9)

(6.9)

(6.9)

(1 596.3)

(5.9)
—

(5.9)

—

14.3 & 20.2

(1 589.4)

0.0
(8.5)

—

(1 589.4)—(1 596.3)(1 589.4)—(1 596.3)(6.9)(146.4)(146.4)(12.1)(12.1)(158.5)(45.8)——(158.5)(6.9)(146.4)(12.1)—(158.5)

(8.5)

(8.5)

(8.5)

Trade payables and related accounts

14.3(367.5)(367.5)(367.5)(367.5)

Other payables and accrued liabilities

14.3(241.5)(241.5)(241.5)(241.5)

Total financial liabilities(2 343.0)—(13.9)—(15.4)(2 372.3)—(2 372.3)—(2 372.3)

Total(1 751.0)

6.4

—

43.1

(3.8)

(1 705.3)

462.7(2 174.5)

6.4(1 705.3)(*) All commodity swaps are designated as cash flow hedges.

67

(**) Interest rate swaps (payer fixed / receiver variable) taken out by the Group are designated as cash flow hedges.
31 December 2019
Accounting categories(in € million)

Notes

Amortised
cost

Equity investments - nongroup

13

Loans, deposits and receipts

13

26.8

Trade receivables and related accounts (excluding
current tax receivables)

14.2

165.0

Derivative instruments hedging financial risk
Derivative instruments hedging operating risk (*)
Cash and cash equivalents

Fair value –hedging
instruments

6.5

15

10.9
0.1
3.1

155.9
347.7

17

(1 490.7)

Financial liabilities on finance leases

17(53.3)

Other long-term liabilities

17(48.7)

Total long-term debt

(1 592.7)

63.3
6.5

10.9

63.4

(8.2)

—

20.2

Total long-term debt and instruments(1 592.7)

Negotiable commercial paper (NEU CP)

17(188.2)Other short-term liabilities

17

(8.5)

Total short-term debt

(196.7)

—

(8.2)

—

—

14.3

Other payables and accrued liabilities

14.3

Level 1:
pricesquoted on
activemarkets

Level 2:significant
observable
inputs

(2.7)

—

175.9

175.9

175.9

0.1

0.1

0.1

3.1

3.1

3.1
219.2

219.2

171.6

47.6

431.6

171.6

253.5

431.6

(1 490.7)(1 490.7)(53.3)(53.3)(53.3)(56.9)(56.9)(9.6)(1 610.5)(242.7)

6.5(1 490.7)(9.6)(34.4)

6.5
26.8

(9.6)

(383.6)

6.5

Total
financial
instruments
at fair value

26.8(1 600.9)—

Level 3:significant
nonobservable
inputs

26.8

—

(2.7)

14.3 & 20.2

Trade payables and related accounts

3.1

(8.2)
—

Carrying
amount6.5

20.2

Term Loan A and revolving credit facility (unused)

Derivative instruments hedging operating risk (*)

Fair value
Fair value
through other
Mandatorily atthrough othercomprehensive
fair value
comprehensive
income –throughincome – debt
equityprofit or loss
instruments
instruments

14.2 & 20.2

Total financial assets

Derivative instruments hedging financial risk (**)

Fair value measurement based on:—(1 600.9)(9.6)—(1 610.5)(188.2)(188.2)(11.2)(11.2)(199.4)(56.9)——(199.4)(1 600.9)(9.6)—(1 610.5)(188.2)(11.2)—(199.4)(34.4)(34.4)(34.4)(383.6)(383.6)(383.6)(242.7)(242.7)(242.7)

Total financial liabilities(2 415.7)—(10.9)—(44.0)(2 470.5)—(2 470.5)—(2 470.5)

Total(2 068.0)

6.5

—

63.4

(40.9)(2 038.9)

171.6(2 217.0)

6.5(2 038.9)

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants.
Fair value is based on market inputs and commonly used valuation models, and may be confirmed in the case of complex instruments by reference to values quoted by independent financial institutions.

68NOTE 22 –RELATED PARTIESACCOUNTING PRINCIPLES
Under IAS 24 Related party disclosures, a related party is a person or an entity that is related to thereporting entity.
It can be any of the following:–a person or company that has control over the Group;–a Group associate;–a joint venture;–a member of the company’s key management personnel (or a member of that person’sfamily).

A related party transaction is a transfer of resources, services or obligations between the Group andthis related party.
22.1 TRANSACTIONS WITH ASSOCIATES
The scope of associates is defined in Note 3.3.
The amounts shown in the Group’s accounts relating to associates are as follows:Year ended 31 December
2020
2019
—
—
—
1.1

(in € million)

Statement offinancial positionNon-current assets
Current assets
Non-current liabilities
Current liabilities

Income statement

Revenue
Cost of sales
Financial income

—
13.4
—

4.5
1.3
—
1.6
5.2
11.9
—

Transactions were carried out in normal market conditions, that is in conditions similar to those thatwould usually apply between independent parties.
22.2 TRANSACTIONS WITH SHAREHOLDERS

22.2.1 Loan agreement between Verallia Packaging and Bpifrance Financement
On 11 December 2018, Verallia Packaging, a Company subsidiary, and Bpifrance Financement, anaffiliate of Bpifrance Participations, a direct shareholder in the Company, signed an agreement for a€10 million instalment loan aimed at financing and refinancing the cash requirements of Verallia
Packaging and its subsidiaries. The loan carries annual interest at a rate of 0.70%. The loan is
repayable on 31 December 2021.
At 31 December 2020, the loan amount including interest totalled €3.3 million versus €6.7 million at
31 December 2019.

69

22.2.2 Intra-group loan with Horizon Intermediate Holdings:
On 6 August 2020, Verallia Packaging, a Company subsidiary, and Bpifrance Financement, anaffiliate of Bpifrance Participations, a direct shareholder in the Company, signed a partnershipagreement for a total amount of €100,000. The purpose of this agreement was to provide Bpifrancewith financial and logistical support to organise its “BIG Tour” event running from 29 July to 28
August 2020 and the “Bpifrance Inno Génération” event held on 1 October 2020 and open to the
public.
22.2.3 Services contract
The Group has no services contracts with its shareholders.
22.3 TRANSACTIONS WITH MANAGEMENT PERSONNEL
The Group’s key management personnel are its Management team, which includes the following:–

The Chief Executive Officer–

The Chief Financial Officer–

Segment Directors–

The General Secretary–

The Vice-President of Operations–

The Chief Legal Officer

The compensation of key management personnel shown in the statement of income for the period(including employer contributions and excluding social security contributions on bonus share awards)
is as follows:Year ended 31 December(in € million)
2020

2019

Short-term employee benefits

4.7

7.5

Post-employment benefits

0.9

0.6

Other long-term benefits——

Termination benefits——

Share-based payment

2.0

3.5

Total

7.6

11.6

The compensation of members of the Board of Directors (attendance fees) corresponds to the amounts
recorded in the statement of income over the period.
Attendance fees allocated to non-executive officers in respect of their mandates at Verallia SA
amounted to €0.4 million in 2020 versus €0.3 million in 2019.

70

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEETCOMMITMENTSNOTE 23 –23.1 COMMITMENTS OF OPERATING ACTIVITIES(in € million)

Notes

31 December

2020

2019

OPERATING COMMITMENTS GIVEN
Operating lease liabilities
Other operating commitments given
Total operating commitments given

23.1.2

566.6
8.3
574.9

557.5
3.4
560.8

23.1.38.8

11.6

23.1.1OPERATING COMMITMENTS RECEIVED
Commitments received

23.1.1 Non-cancellable purchase commitments
Non-cancellable purchase commitments include firm orders for property, plant and equipment as wellas purchase commitments for commodities and services.
Payments due(In € million)

Non-cancellable purchase commitments- Non-current assets- Commodities and energy- Services- Other

2020

A
B

Less than 1 year

1 to 5 years

More than
5 years

95.8
399.5
62.1
9.2

86.3
264.6
38.5
8.8

9.5
134.2
23.6
0.4

—
0.8
—
—

566.6

398.2

167.6

0.8

Total

Payments due(In € million)

Non-cancellable purchase commitments- Non-current assets- Commodities and energy- Services- Other

2019

A
B

Less than 1 year

1 to 5 years

More than
5 years

96.9
385.5
68.8
6.3

92.3
252.9
48.5
4.7

4.6
130.0
20.3
1.6

—
2.6
—
—

557.5

398.4

156.5

2.6

Total

A. Corresponds mainly to purchase commitments made for the building and rebuilding of
furnaces.
B. Includes CO2 emission allowances futures qualifying for the “own use” exemption.
23.1.2 Other operating commitments given
Other operating commitments given consist primarily of guarantees relating to the environment.
23.1.3 Operating commitments received
Operating commitments received amounted to €8.8 million at 31 December 2020 and to €11.6 million
at 31 December 2019. They consist primarily of guaranteed receivables.

71

23.2 FINANCING COMMITMENTS
The Group’s main borrowing commitments are indicated in Note 17.
The Group’s main commitments with respect to its borrowings and financial liabilities are describedin Note 17.
•

The Group had current assets pledged as collateral in the amount of €43.7 million at 31
December 2020 versus €44.7 million at 31 December 2019. They consisted mainly of bankguarantees and tangible collateral.

•

Other financial commitments given amounted to €15.4 million at 31 December 2020 versus€16.2 million in 2019. These commitments consisted mainly of letters of comfort for local
loan guarantees.

•

Verallia Group also received commitments by way of guarantees in the amount of €758.7
million at 31 December 2020 versus €805.5 million in 2019. These commitments consisted
mainly of credit facilities (see Note 17 for more information).

•

As part of the process of listing the Company’s shares for trading on the regulated market ofEuronext Paris, on 7 October 2019 the Group refinanced the facilities that had been madeavailable to it under the facilities agreement signed on 7 August 2015 (as amended
subsequently) (the “2015 Facilities Agreement”), primarily by drawing on the term loan madeavailable to Verallia Packaging under the facilities agreement of a maximum total principal
amount of €2,000,000,000 (including a term loan of a total principal amount of€1,500,000,000 and a revolving credit facility of a maximum principal amount of€500,000,000) governed by French law and signed on 17 July 2019 with an internationalbanking syndicate (the “2019 Facilities Agreement”). Under the 2019 Facilities Agreement,
the Company stands as joint and several guarantor (the “2019 Guarantor”) for the payment
and repayment obligations of Verallia Packaging (as the borrower) and of the Group’s othercompanies that also adhered to the 2019 Facilities Agreement (as guarantors) (i.e. Verallia
France, Verallia Italia, Verallia Brasil, Verallia Spain, Verallia Portugal and Verallia
Deutschland), for a maximum principal amount of €2,000,000,000 (plus interest, fees andcommissions) and within the legal and contractual limits set out in Article 22.13 (Limitationof Liabilities of French Guarantors) of the 2019 Facilities Agreement.
In addition, on 24 April 2020 the Group signed a revolving credit facility agreement governed
by French law for a total maximum principal amount of €250,000,000 with an internationalbanking syndicate for a 1-year period, extendable by six months (the “2020 Revolving Credit
Facility Agreement”), the purpose of which was to shore up its liquidity during the publichealth crisis. Under the 2020 Revolving Credit Facility Agreement, the Company stands as
joint and several guarantor (the “2020 Guarantor”) for the payment and repayment
obligations of Verallia Packaging (as the borrower) and of the Group’s other companies that
may adhere to the 2020 Revolving Credit Facility Agreement (as guarantors), for a maximum
principal amount of €250,000,000 (plus interest, fees and commissions) and within the legal
and contractual limits set out in Article 16.13 (Limitation of Liabilities of French Guarantors)of the 2020 Revolving Credit Facility Agreement.

72

NOTE 24 –AUDIT FEES
PricewaterhouseCoopers(in € million)

Amount(before tax)

BM&A
Amount(before tax)

%

Other
Amount(before tax)

%

Total
Amount(before tax)

%

%

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

1.3

1.2

95%

49%

0.4

0.3

100%

71%

0.2

0.2

95%

56%

1.9

1.6

96%

52%

Verallia SA

0.4

0.3

28%

—%

0.3

0.2

71%

—%

—

—

—%

—%

0.7

0.5

35%

—%

Fully-consolidated subsidiaries

0.9

0.8

68%

35%

0.1

0.1

29%

15%

0.2

0.2

95%

56%

1.2

1.1

61%

35%

Services other than certification offinancial statements

0.1

1.2

5%

51%

—

0.1

—%

29%

—

0.1

5%

44%

0.1

1.4

4%

48%

Verallia SA

0.1

0.7

4%

—%

—

0.1

—%

—%

—

—

—%

—%

0.1

0.8

3%

—%

Fully-consolidated subsidiaries

—

0.5

—%

20%

—

-

—%

—%

—

—

5%

44%

—

0.6

1%

20%

1.4

2.4

100%

100%

0.4

0.4

100%

100%

0.2

0.3

100%

100%

2.0

3.0

100%

100%

Audit, certification and review of parent
company and consolidated financial
statements

TOTAL

In 2019, services other than the certification of financial statements provided by the Statutory
Auditors of Verallia SA, the consolidating entity, and of its subsidiaries, corresponded primarily to
due diligence conducted for the Company’s initial public offering.

NOTE 25 –EVENTS AFTER THE CLOSING DATE

No significant events occurred after the close on 31 December 2020.

73