The packaging sector in Europe has overall low exposure to the COVID-19 pandemic, but some companies are more vulnerable than others, Moody’s says in a report published recently.
Most of the aggregate revenue of the 15 European non-paper packaging companies that Moody’s rate is generated from food, beverage and pharmaceutical end markets, which are demonstrating resilience in the current environment. However, companies that produce packaging for more discretionary products like cosmetics or serve heavily affected industries, such hospitality and travel, could experience significant volume declines in these segments.
Some non-paper packaging manufacturers have or are encountering production and logistical disruptions linked to the pandemic. Although this will continue to be a risk, analysts do not expect it to be material. Overall, Moody’s expects a 5% decline in the sector’s aggregate EBITDA in 2020, followed by a rebound in 2021.