Revenue boom for battery maker despite Covid-19
Varta acquired the Varta consumer battery business from Energizer Holdings Inc. on January 2, 2020 and these sales were included in the group accounts for the first time in 1Q20 but the exceptionally strong quarter was also in evidence in organic growth.
Varta said it does not, at present, expect any adverse impacts for its outlook due to Covid-19 but that it could not rule the possibility out.
The group’s sales were €198.5 million, an increase of 170.3 percent compared with 1Q19 and EDITDA was €46.6 million, almost triple what they were a year before. Organic sales alone – taking out Varta consumer batteries – were up 68.2 percent.
Varta confirmed that it expects to sell between €780 million €800 million in batteries in 2020. At the mid-point this would represent a doubling of annual sales by 118 percent compared with 2019. Organic revenue growth (excluding VARTA Consumer) is set to stand between 32 and 38 percent. The adjusted group EBITDA is expected to come in at €175 million and €185 million.
Backed by these strong growth in sales and profits Varta is planning for 2020 capital expenditure of between €300 million and €330 million.
“Together with Varta Consumer, we have made a very positive start to the new fiscal year and have again accelerated our high growth momentum,” said Herbert Schein, CEO of Varta, in a statement. “The pleasing result is primarily attributable to sustained strong demand for our lithium-ion cells, while we significantly increased sales by rapidly expanding production capacities. Our business model is also proving to be highly robust, while the high level of discipline we have shown in implementing protective measures against Covid-19 has meant we have been able to continue production without any restrictions so far.”
The strongest revenue growth is being seen in the market for rechargeable lithium-ion batteries for high-tech consumer products, particularly premium true wireless headsets, Varta said. However, the newly combined company is investing heavily in solid state battery technology.
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