Navigating Currency Turbulence: Verallia Alters 2023 Revenue Projections Amidst Argentine Economic Shift
In the wake of a substantial devaluation exceeding 50 percent in the Argentinian peso on December 13, Verallia finds itself reassessing its revenue outlook for 2023. The aftermath of this currency turbulence has prompted a reevaluation, leading the company to revise its projections. Verallia now anticipates challenges in achieving its year-on-year consolidated revenue growth target of at least 20 percent for 2023, primarily due to the conversion impact of its local turnover into euros.
Verallia, as a consequence of the IAS 29 “Hyperinflation” accounting rule applicable to its Argentinian activities, is compelled to convert its entire local income statement into euros for the 2023 accounts. This conversion is based on the closing rate of the period, diverging from the customary average rate. The expected contribution of Argentina to the Group’s 2023 revenue undergoes a significant reduction, halving its projected impact. Despite Argentina constituting a now minor share, approximately 2 percent, of the Group’s revenue, this decline remains unmitigable in the final three weeks before the year-end.
While Verallia faces challenges on the revenue front, it stands firm on its commitment to achieving an adjusted EBITDA target surpassing EUR 1.1 billion in 2023. Despite the economic fluctuations and unforeseen hurdles, the company maintains its strategic focus on sustained operational excellence and financial resilience.
Source: Verallia with additional information added by GlassBalkan
