Stock Analysis & Valuation Vetropack Holding AG (VETN.SW)

• Previous Close: CHF22.60
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	19.82	-12
Intrinsic value (DCF)	10.98	-51
Graham-Dodd Method	13.36	-41
Graham Formula	0.69	-97

Strategic Investment Analysis

Company Overview

Vetropack Holding AG is a leading European manufacturer of high-quality glass packaging solutions for the food, beverage, pharmaceutical, and cosmetics industries. Founded in 1911 and headquartered in Bülach, Switzerland, the company operates production facilities across Switzerland, Austria, the Czech Republic, Croatia, Slovakia, Ukraine, Italy, and Moldova. Vetropack specializes in glass bottles and jars, offering sustainable and recyclable packaging solutions that cater to premium and mass-market brands. With a strong focus on innovation and environmental responsibility, Vetropack serves a diverse clientele, including major beverage producers and luxury cosmetic brands. The company’s strategic presence in Central and Eastern Europe provides a competitive edge in cost efficiency and regional market penetration. As sustainability trends drive demand for eco-friendly packaging, Vetropack is well-positioned to capitalize on the growing preference for glass over plastic.

Investment Summary

Vetropack Holding AG presents a mixed investment case. The company benefits from stable demand in the food and beverage packaging sector, with glass packaging favored for its sustainability and premium appeal. However, its financial performance shows modest profitability (net income of CHF 13.7 million in the latest period) and significant capital expenditures (CHF 85.5 million), which may pressure cash flows. The dividend yield (~1.6% based on a CHF 1 per share payout) is modest but sustainable. Risks include exposure to energy price volatility (glass production is energy-intensive) and geopolitical uncertainties in Eastern Europe, where Vetropack has substantial operations. The stock’s beta of 0.95 suggests market-aligned volatility, making it a moderate-risk play in the consumer cyclical sector.

Competitive Analysis

Vetropack’s competitive advantage lies in its regional diversification, cost-efficient production footprint in Eastern Europe, and strong relationships with multinational beverage brands. Unlike global giants such as Owens-Illinois, Vetropack focuses on European markets, allowing for localized supply chains and lower logistics costs. Its sustainability initiatives, including energy-efficient furnaces and high recycling rates, align with EU packaging regulations and client ESG goals. However, the company faces stiff competition from larger players with greater R&D budgets for lightweight glass and alternative materials. Vetropack’s smaller scale limits its ability to compete on price in commoditized segments, but its niche in premium glass packaging (e.g., for spirits and cosmetics) provides pricing power. The war in Ukraine poses operational risks to its Ukrainian facility, though its diversified base mitigates this. Overall, Vetropack’s regional focus and sustainability credentials are strengths, but it lacks the global reach and material innovation capabilities of top-tier competitors.

Major Competitors

• Owens-Illinois Inc. (OI): Owens-Illinois is the world’s largest glass container manufacturer, with a global footprint and scale advantages. It leads in R&D for lightweight glass and serves blue-chip clients like Diageo and Heineken. However, its high exposure to the Americas and debt load (over $4 billion) are risks. Vetropack’s European focus and cleaner balance sheet offer a contrast.
• Ardagh Group S.A. (ARD.XE): Ardagh is a diversified packaging giant with strong positions in both glass and metal containers. Its scale and client diversification are strengths, but its complex corporate structure (post-2021 spin-offs) and reliance on North America limit its overlap with Vetropack’s core European markets.
• Vidrala S.A. (VIDE.SW): Vidrala is a key European competitor with a focus on Iberia and the UK. It boasts higher margins than Vetropack due to automation but lacks Vetropack’s Eastern European cost advantages. Its recent acquisitions (e.g., Encirc) expand its reach in sustainable glass solutions.
• BA Glass B.V. (BAER.SW): A major private player in European glass packaging, BA Glass competes directly with Vetropack in Central Europe. Its ownership by private equity firm Bain Capital provides financial flexibility, but its lack of public disclosures makes comparisons difficult. Vetropack’s listed status offers transparency advantages.