A new report by Moody's has found that the packaging sector in Europe by and large has had low exposure to the COVID-19 pandemic, although some companies are more vulnerable than others.
According to the report, most the the aggregate revenue of the 15 European non-paper packaging companies that are rated by Moody's is generated from the food, beverage and pharmaceutical end markets, which are 'demonstrating resilience' in the current pandemic situation.
However, it said that companies that produce packaging for the cosmetics industry or other 'heavily-affected' sectors, such as hospitality and travel, could 'experience significant volume declines' in these segments, while the prospect of a global recession could also weigh on these markets.
Overall, Moody's said that it expects a 5% decline in the aggregate EBITDA for the sector in 2020, but is expecting a 'rebound' next year.
It also noted that some non-paper packaging manufacturers have or are encountering production and logistical disruptions linked to the pandemic.
Moody's said that in general, liquidity levels remain 'adequate' across the companies that it rates, with debt maturities generally beyond 2022.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.