Stock Analysis & Valuation Verallia S.A. (VRLA.PA)

• Previous Close: €22.10
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	26.61	20
Intrinsic value (DCF)	14.41	-35
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Verallia SA (VRLA.PA) is a leading global producer of glass packaging solutions for the beverage and food industries. Headquartered in Courbevoie, France, and founded in 1827, the company specializes in manufacturing bottles and jars for still and sparkling wines, spirits, beers, soft drinks, mineral water, and food products. Operating in the Packaging & Containers sector under the Consumer Cyclical industry, Verallia serves a diverse clientele worldwide, emphasizing sustainability and innovation in glass packaging. With a market capitalization of approximately €3.29 billion, Verallia plays a critical role in the circular economy, promoting recyclable and eco-friendly packaging solutions. The company’s extensive product portfolio and long-standing industry expertise position it as a key player in the glass packaging market, catering to premium and mass-market segments alike.

Investment Summary

Verallia presents a compelling investment case with its strong market position in the glass packaging industry, consistent revenue generation (€3.46 billion in FY 2023), and solid profitability (net income of €235.7 million). The company’s focus on sustainability aligns with growing consumer and regulatory demand for eco-friendly packaging, enhancing its long-term growth prospects. However, investors should consider risks such as high total debt (€2.25 billion) and exposure to cyclical demand in the beverage and food sectors. The dividend yield (€1.7 per share) and stable cash flow from operations (€587.6 million) add to its appeal, but capital expenditures (€324.2 million) indicate ongoing reinvestment needs. Verallia’s beta of 0.905 suggests lower volatility compared to the broader market, making it a relatively defensive play in the Consumer Cyclical sector.

Competitive Analysis

Verallia’s competitive advantage lies in its specialization in glass packaging, a segment with high barriers to entry due to capital-intensive production and stringent regulatory requirements. The company benefits from its long-standing industry presence, extensive distribution network, and strong relationships with global beverage and food brands. Its focus on sustainability—glass being 100% recyclable—positions it favorably amid increasing environmental regulations and consumer preferences for green packaging. However, Verallia faces competition from alternative packaging materials (plastic, aluminum) and other glass manufacturers. Its scale allows cost efficiencies, but regional competitors with lower production costs could pressure margins. The company’s innovation in lightweight glass and premium packaging designs helps differentiate its offerings, particularly in the wine and spirits segments. Verallia’s European base provides stability, but its global expansion strategy must navigate varying market dynamics and raw material cost fluctuations.

Major Competitors

• Ardagh Group S.A. (ARD.PA): Ardagh Group is a major competitor in glass and metal packaging, with a strong presence in North America and Europe. Its diversified portfolio (including metal cans) provides resilience, but Verallia’s pure-play glass focus allows deeper specialization. Ardagh’s larger scale offers cost advantages, but its higher debt load (post-acquisitions) may limit financial flexibility compared to Verallia.
• O-I Glass, Inc. (OI): O-I Glass is a global leader in glass packaging with a significant footprint in the Americas. Its innovation in sustainable packaging rivals Verallia’s, but O-I’s recent restructuring efforts and higher leverage pose execution risks. Verallia’s stronger profitability (O-I reported net losses in recent years) and European market dominance give it an edge in stability.
• Vetropack Holding AG (VETO.VI): Vetropack is a regional competitor focused on Central and Eastern Europe. Its niche in premium glass packaging for beverages aligns with Verallia’s strengths, but its smaller scale limits global reach. Vetropack’s lower debt and family-owned structure provide stability, but it lacks Verallia’s diversified client base and innovation capacity.
• Bayerische Flaschen-Glaswerke GmbH (part of Gerresheimer AG) (BAYN.DE): Gerresheimer’s pharmaceutical glass packaging segment differs from Verallia’s focus, but its beverage glass operations compete in Europe. Gerresheimer’s high-margin pharma business diversifies risk, but Verallia’s scale in food and beverage glass gives it broader market penetration. Both emphasize sustainability, but Verallia’s pure-play model offers clearer investor exposure.