financial report 2017 people passion packaging

Financial Report 2017

PEOPLEPASSION

PACKAGING

Key Figures

2_Constantia Flexibles Key Figures

Key figures – earnings (in € million) 2017 2016 Change (restated) 2017/2016 in %

Operating sales ....................................................................................................................................................................................................................................................................................................................................................................................................................................1,487.5 ...................................................................................1,461.1 .................................................................................................1.8%Operating EBITDA .............................................................................................................................................................................................................................................................................................................................. .............................................................................................186.3 .............................................................................................181.1 .............................................................................................2.9%Operating EBITDA margin in % ..................................................................................................................................................................................................................................................................................................................................................12.5% .........................................................................................12.4% ...............................................................................................................................

Operating EBIT .................................................................................................................................................................................................................................................................................................................................................................................................................................................. 69.0 .....................................................................................................64.7 .................................................................................................6.6%Operating EBIT margin in % ...........................................................................................................................................................................................................................................................................................................................................................................4.6% .................................................................................................4.4% ...............................................................................................................................

Operating EBIT before PPA amortization ..................................................................................................................................................................................................................................................................................................108.6 .............................................................................................103.9 .................................................................................................4.5%Operating EBIT before PPA amortization margin in % ................................................................................................................................................................................................................................7.3% .................................................................................................7.1% ...............................................................................................................................

Consolidated net income (reported) ...............................................................................................................................................................................................................................................................................................................................287.2 ....................................................................................................(1.3) ...............................................................................................................................

Key figures – balance sheet (in € million) 12/31/2017 12/31/2016 Change 2017/2016 in %

Balance sheet total ...............................................................................................................................................................................................................................................................................................................................................................................................................2,329.0 ...................................................................................3,146.1 .................................................................................(26.0%)Equity .........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,108.1 .............................................................................................856.4 .....................................................................................29.4%Equity ratio in % ......................................................................................................................................................................................................................................................................................................................................................................................................................................47.6% .........................................................................................27.2% ...............................................................................................................................

Liabilities and provisions....................................................................................................................................................................................................................................................................................................................................................................................1,220.9 ...................................................................................2,289.7 .................................................................................(46.7%)Investments in tangible and intangible assets* ......................................................................................................................................................................................................................................................................100.3 .............................................................................................106.7 .........................................................................................(6.0%)Depreciation (without amortization of goodwill and amortization of client lists)* ............................................................................................95.2 .............................................................................................110.8 .................................................................................(14.0%)

Key figures – financing (in € million) 12/31/2017 12/31/2016 Change 2017/2016 in %

Net debt .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................396.9 ...................................................................................1,172.2 .................................................................................(66.1%)Net debt/EBITDA (ratio)** ................................................................................................................................................................................................................................................................................................................................................................................................2.1 .............................................................................................................4.1 .................................................................................(48.5%)

Key figures – liqudity (in € million) 2017 2016 Change 2017/2016 in %

Cash flow from operating activities ....................................................................................................................................................................................................................................................................................................................................128.9 .............................................................................................172.2 .................................................................................(25.1%)Free cash flow*** .....................................................................................................................................................................................................................................................................................................................................................................................................................................773.9 .....................................................................................................52.8 ...............................................................................................................................

Number of employees (FTE, excluding Labels) 2017 2016 Change (restated) 2017/2016 in %

Number of employees (annual average).........................................................................................................................................................................................................................................................................................................7,241 .............................................................................................7,413 .........................................................................................(2.3%)

* Including Labels / ** Net debt/EBITDA (ratio). Previous year’s Net debt/EBITDA figures have not been restated for Labels / *** Includes net proceeds from Labels €783.1 million

Preamble Constantia Flexibles_3

Preamble

This annual financial statements for fiscal year 2017 has been prepared based on the consolidation of Constantia Flexibles Holding GmbH, the top Austrian parent company.

Until December 31, 2016, we published the consolidated financial statements of the parent company, Constantia Flexibles Group GmbH. The consolidated financial state-ments of Constantia Flexibles Group GmbH were pre-pared primarily for those persons who held interests in the bond. The bond was traded on the secondary market of the Vienna Stock Exchange starting May 25, 2012. After a five-year period, the listed bond of Constantia Flexibles Group GmbH was redeemed in May 2017, which ended the listing of the security in official trading. As a result, all ancillary duties arising from the listing cease to apply, in particular the duty to publish half-yearly and annual financial statements.

The expanded consolidation scope gives rise to the follow-ing material differences as compared to the previously published consolidated financial statements:

Goodwill and customer baseGoodwill and intangible assets for the consolidated financial statements of Constantia Flexibles Holding GmbH were identified reported during the acquisition by the Wendel Group. Related expenses are not presented in the con-solidated financial statements of Constantia Flexibles Group GmbH.

External financing External corporate financing is handled by the Holding Company and is only partially passed on within the Group. Not all of the resulting financing expenses are included in the consolidated financial statements of Constantia Flexibles Group GmbH.

Holding company expensesExpenses incurred in connection with the holding function of Constantia Flexibles Holding GmbH are passed on in part to the Group companies.

Highlights 2017

January 2017The manufacturing plants Constantia Tobepal in Spain and Sim’Edit in France are awarded a gold level sustainability rating by the indepen dent EcoVadis institute.

February 2017Constantia Flexibles invests around €3 million in printing technology at its manufacturing site in Wangen im Allgäu, Germany, for the dairy sector.

March 2017Constantia Flexibles acquires Italy’s leading dairy lidding company, TR Alucap S.r.l. (Alucap), in northern Italy.

Constantia Flexibles invests in new printing technology at its pharmaceutical manufac-turing site in Louvain, Belgium.

April 2017Constantia Flexibles wins four AlufoilTrophies from the European Aluminium Foil Association.

May 2017Constantia Flexibles takes part in the Inter-pack trade fair in Düsseldorf, presenting packaging solutions for the challenges of megatrends such as globalization, brandprotection and urbanization.

June 2017Constantia Flexibles takes part in the Pack-aging Day or “Verpackungstag” being cele-brated in Germany, Austria and Switzerland for the third year in a row.

July 2017Constantia Flexibles signs agreement to sell its Labels Division to Multi-Color Corporation (MCC) for around €1.15 billion ($1.3 billion).

August 2017Constantia Flexibles is once again one of the winners of the prestigious annual German Packaging Award. The Company’s film-based product CompresSeal won in the category Sustainability for 2017.

September 2017Constantia Flexibles invests €6 million in new technology to manufacture film-based flexible packaging at its site in Weiden, Germany.

October 2017After regulatory approvals, Constantia Flexibles completes the sale of its Labels Division to MCC.

November 2017Constantia Flexibles announces a double- digit million Euro investment in the expan-sion of capacity at its manufacturing site for pharmaceutical packaging at Constantia Patz, in Austria.

December 2017Constantia Flexibles wins a Gold Pack Award for Nando’s Take-Away Chicken Packaging and five WorldStar Awards for innovative packaging solutions.

4_Constantia Flexibles Highlights 2017

P. 2–6 Key Figures ............................................................................................................................................................................................................................................................................................................................................................................................................................2 Preamble ..........................................................................................................................................................................................................................................................................................................................................................................................................................................3 Highlights 2017 ...................................................................................................................................................................................................................................................................................................................................................................................................4 Report of the Supervisory Board ...........................................................................................................................................................................................................................................................................................................6P. 7–29 Management Report 7 1. Overview of Constantia Flexibles............................................................................................................................................................................................................................................................................................8 2. Economic Development .............................................................................................................................................................................................................................................................................................................................................8 2.1 General Conditions ..............................................................................................................................................................................................................................................................................................................................................8 2.2 Energy and Commodities Market ..........................................................................................................................................................................................................................................................10 2.3 Development of the Market for Flexible Packaging .........................................................................................................................................................10 3. Business Development .........................................................................................................................................................................................................................................................................................................................................10 3.1 Consolidation scope ....................................................................................................................................................................................................................................................................................................................................10 3.2 Financial Performance........................................................................................................................................................................................................................................................................................................................11 3.3 Purchasing.......................................................................................................................................................................................................................................................................................................................................................................................12 3.4 Net Assets and Financial Position .........................................................................................................................................................................................................................................................13 4. Investments ......................................................................................................................................................................................................................................................................................................................................................................................................15 5. Human Resources .................................................................................................................................................................................................................................................................................................................................................................16 6. Sustainability ................................................................................................................................................................................................................................................................................................................................................................................................18 7. Report on Risks and Opportunities .........................................................................................................................................................................................................................................................................22 7.1 Internal Control System ..................................................................................................................................................................................................................................................................................................................22 7.2 Business Risks ................................................................................................................................................................................................................................................................................................................................................................23 7.3 Business Opportunities ...................................................................................................................................................................................................................................................................................................................26 8. Research and Development ...............................................................................................................................................................................................................................................................................................................26 9. Events after the Reporting Period ...............................................................................................................................................................................................................................................................................28 10. Outlook for 2018 ................................................................................................................................................................................................................................................................................................................................................................29P. 31–120 Consolidated Financial Statements ..................................................................................................................................................................................................................................................................31 Consolidated Balance Sheet as of December 31, 2017...................................................................................................................................................................32 Consolidated Income Statement for Fiscal Year 2017 ..............................................................................................................................................................................33 Consolidated Statement of Comprehensive Income for Fiscal Year 2017 ....................................................................34 Consolidated Cash Flow Statement for Fiscal Year 2017 ............................................................................................................................................................35 Consolidated Statement of Changes in Equity for Fiscal Year 2017 ...................................................................................................36 Notes to the Consolidated Financial Statements............................................................................................................................................................................................................38 A. General.............................................................................................................................................................................................................................................................................................................................................................................................................................38 B. Reporting currency and currency translation ....................................................................................................................................................................................................................38 C. Consolidation methods ........................................................................................................................................................................................................................................................................................................................................40 D. Acquisitions and other changes to the Scope of consolidation ..................................................................................................................41 E. Accounting policies ............................................................................................................................................................................................................................................................................................................................................................47 F. Application of new and revised International Financial Reporting Standards ...........................................57 G. Management Judgment and Use of Estimates.......................................................................................................................................................................................................61 H. Notes to the Consolidated Balance Sheet ...............................................................................................................................................................................................................................63 I. Notes to the Consolidated Income Statement ..................................................................................................................................................................................................................88 J. Notes to the Consolidated Cash Flow Statement ............................................................................................................................................................................................94 K. Financial instruments..................................................................................................................................................................................................................................................................................................................................................95 L. Contingent Liabilities/Receivables and Commitments ........................................................................................................................................................113 M. Related party disclosures ..................................................................................................................................................................................................................................................................................................................113 N. Auditors’ fees ...................................................................................................................................................................................................................................................................................................................................................................................115 O. Group entities .................................................................................................................................................................................................................................................................................................................................................................................116 P. Other disclosures.................................................................................................................................................................................................................................................................................................................................................................118 Auditor’s Report ......................................................................................................................................................................................................................................................................................................................................................................................119

Table of Contents Constantia Flexibles_5

Table of Contents

Operating principle of the Supervisory BoardThe Supervisory Board exercises the duties incumbent upon it under statute and the Articles of Association. Its activities are mainly focused on regularly advising the Management Board on the management of the Company and on monitoring the management of Constantia Flexibles Holding GmbH.

The Management Board informs the Super-visory Board verbally and in writing, regularly (at least monthly), promptly and comprehen-sively, on all major developments of the Company, its business policy, financial per-formance, financial position, investments, key performance figures on health, safety, security and environment (HSSE) and other crucial issues relating to corporate gover-nance and budgeting. Transactions of con-siderable importance, planned acquisitions, the Group strategy, and risk situation of the Group are dealt with in detail.

Between the meetings, the Supervisory Board is kept informed by the Management Board of important operations. In urgent matters, circular resolutions are adopted or telephone conferences are held.

The functioning and effectiveness of the Internal Control and Risk Management System are routinely discussed, the current investment projects are approved and the annual budget is reviewed.

Advisory FocusHealth, safety, security and environment (HSSE) was an integral component of each board meeting of the M&A/Operations Committee. The Supervisory Board attri -butes significant importance to this topic.

Measures for implementing the corporate strategy adopted in the fall of 2016 were major topic during 2017.

As part of this mid-term strategy, the deci-sion to sell the Labels Division was made

during the frist half year of 2017. The agree-ments with the acquirer Multi-Color Corpora-tion were signed in July 2017 and the trans-action closed at the end of October 2017. During the bidding process, which lasted several months, the Supervisory Board was also intensively involved outside of formal meetings and supported the option that Constantia Flexibles will continue to play an indirect, leading role in the labels industry as the largest shareholder of Multi-Color Cor-poration with an equity interest of 16.6%.

Concurrently with the sale of the Labels Division, the Company’s debt-to-equity ratio was reduced significantly from the funds from the sales proceeds. The €1.3 billion in-ternationally syndicated line of credit placed in March 2015 was repaid in full, and a new credit facility of €375 million with a 5-year term was taken out at significantly more favorable terms.

Following Constantia San Prospero in 2016, Alucap, another company in northern Italy was acquired the first half of 2017. During the same period, it became unavoidable that a manufacturing site in Romania had to be closed. The Supervisory Board paid particu-lar attention to social compatibility for the affected employees.

In the second half of the year, the Super-visory Board increasingly evaluated potential acquisitions for continuing on the previous growth path, now with a focus on the Food and Pharma Divisions. Supervisory Board CommitteesThe Supervisory Board has formed three standing committees from among its members: an Audit Committee, a Nomination and Compensation Committee and an M&A/Operations Committee. The latter committee meets monthly to address the operational business development, to discuss appropri-ate measures with the Management Board in the event of deviations from the budget goals and to prepare for the approval of im-portant investment and acquisition projects.

Supervisory Board meetingsA total of six meetings of the Supervisory Board and 19 committee meetings were held in 2017. Written circular resolutions were adopted in urgent cases.

Term of office of the Supervisory BoardThe term of office of all members ends at the Annual General Meeting that decides on the formal approval of the actions of the Management Board for fiscal year 2017.

Audit and approval of the financial statements for 2017The financial statements and the manage-ment report as well as the consolidated financial statements and Group manage-ment report of Constantia Flexibles Holding GmbH prepared by the Management Board were audited and given an unqualified audit opinion by PwC Wirtschaftsprüfung GmbH as auditor appointed pursuant to Section 270 UGB (Austrian Commercial Code).

The Supervisory Board analyzed the annual financial statements, including the manage-ment report, the consolidated financial state-ments, including the Group management report, the recommendation for distribution of the profits of Constantia Flexibles Holding GmbH, and the auditor’s management letter with the audit findings in the presence of the auditor, reviewed them in accordance with Section 30k GmbHG (Austrian Limited Lia-bility Companies Act) and approved them on April 26, 2018. The regularly submitted activity reports of the Group’s Internal Audit department showed that no risks had been identified that might have a significant impact on the existence or financial per-formance of the Company. Overall, there were no grounds for the Supervisory Board to raise any objections.

Vienna, April 25, 2018Bernard GautierChairman of the Supervisory Board

Report of the Supervisory Boardin accordance with Section 30k GmbHG (Austrian Limited Liability Companies Act) for fiscal year 2017

6_Constantia Flexibles Report of the Supervisory Board

MANAGEMENTREPORT2017

8_Constantia Flexibles Management Report / Overview of Constantia Flexibles

1. Overview of Constantia Flexibles

2. Economic Development

The Group and its business segmentsConstantia Flexibles is the world’s fourth-largest produc-er of flexible packaging. Based on the guiding principle of “People, Passion, Packaging,” some 7,200 employees manufacture tailor-made packaging solutions at 32 sites in 18 countries. 68% of Constantia Flexibles sales are generated in Europe, 19% in the Americas (USA/Mexico), 7% in the Middle East and Africa and 6% in the Asia- Pacific region. Many international companies and local market leaders from the food and pharmaceutical indus-tries choose the sustainable and innovative products of Constantia Flexibles.

Constantia Flexibles is a global market leader in a number of product lines, such as confectionery packaging, die-cut lids for dairy products and aluminum packaging sys-tems for human and pet food. Globally, Constantia Flexi-bles is the second largest player in blister foils and cold-form foils. In the past few years, Constantia Flexibles has evolved from a European provider to a global Group that is growing through its long-term relationships with glob-al key accounts, offering a range of aluminum-based and film-based products.

In 2017, the Company took a strategic decision to sell its Labels Division for €1.15 billion to Multi-Color Corporation (MCC) in the US. Constantia Flexibles has used the trans-action proceeds to deleverage its balance sheet and will target further acquisitions in the dynamic and consolidat-ing flexible packaging industry. Part of the purchase price

2.1 General Conditions

Global The global economy grew by 3.4% in 2017. Forecast for 2018 is another solid year of economic growth of 3.6%, supported by the ongoing recovery in global trade, andrecoveries in consumption and investment, across devel-oped and emerging markets. Growth in 2019 is expected

was a 16.6% interest in MCC, making Constantia Flexi-bles the largest shareholder in the American company.

In addition, the Company decided that as of January 1, 2018, it will operate with two global divisions – Food and Pharma – and that it will close the regional offices in Houston (responsible for the North America region) and in Dubai (responsible for the CIS, Asia and Africa region) to reduce costs and the organization.

In 2017, the Company pursued its mid-term strategy “Focus21”, which concentrates on selective end-markets in attractive regions. The three pillars of “Focus21” are: defending and extending the Company’s leading positions in the flexible packaging industry; focusing more strongly on growing businesses in which the Company is not yet a leader and making targeted acquisitions.

The strategy is supported by a Value Creation Program that focuses on seven work streams: Procurement, Complex-ity Reduction, Information Technology, Innovation, Manu-facturing Optimization, Commercial Excellence and Cost Management. Constantia Flexibles also takes the topic of Health & Safety very seriously, engaging in pro active measures to achieve “Zero Loss – No Harm.”

The Wendel Group is the majority shareholder of Constan-tia Flexibles, with an equity holding of approximately 61%. Other shareholders are the Arepo Foundation, with a 27% holding and Maxburg Capital Partners with 11%.

to weaken slightly moderatly to 3.4%, mainly as a result of the expected slowdown in the US. Sources: Unicredit, Raiff eisen, World Bank, Deutsche Bank

EuropeEurozone GDP increased by 2.4% in 2017. Rising em-ployment and wages resulted in solid private consumption, while business sentiment is at a decade high, supported

Economic Development / Management Report Constantia Flexibles_9

by rising profitability, good liquidity and lower cost of capi-tal. Economic recovery will likely continue in 2018, with GDP forecast to increase by 2.4% in 2018. Key uncer-tainty to consumption is the future direction of the savings rate, which is presently close to historical lows. In Germa-ny, the economy expanded 2.5% in 2017, with major driv-ers being exports and internal demand. The German econ-omy will likely grow by 2.3% in 2018. Private consumer spending should continue to rise, supported by increases in jobs and wages as well as soft inflation pressure. In view of the likely slowdown in the US and lower momen-tum in global trade, growth in the eurozone is expected to weaken to 1.8% in 2019.

The recovery in consumption, a drop in inflation, ruble sta-bility and recovery in oil prices helped Russia exit reces-sion and return to growth of 1.8% in 2017. The outlook for 2018 growth is estimated at 1.5%, given current poli-cies and weak short-term growth drivers. A large policy stimulus, lifting of the Russian sanctions, improved trade with the EU and the return of Russian tourists helped Turkish economy rebound strongly in 2017. However, in-flation rose to a 14-year high and the lira continued to depreciate. In 2018, Turkish growth is expected to weaken to 3.6%. Elevated inflation and lira volatility will likely continue. Sources: Unicredit, Raiffeisen, World Bank, ECB, Deutsche Bank

North America2017 was another good year for the US economy, with GDP increasing by 2.3%. The National Purchasing Man-ager Index (ISM) for the manufacturing sector continued to increase in the last quarter of 2017, with strong figures seen in key categories – new orders and production. In 2018, the economy is forecast to grow by 2.5%, benefit-ing mainly from lower corporate tax rates, which are ex-pected to provide a significant positive impact on the prof-itability of large US firms in 2018. The tax reform will likely not result in higher long-term economic growth. In 2019, the economy is forecast to grow by 2.1%, as the third longest expansion in US history slows down. Forecast weaker employment growth, higher inflation and a more stable savings rate will likely impact consumption. Key

parameters which had already turned before the economic downturn and are showing signs of deterioration include rising default rates for consumer loans, weaker demand for commercial real estate loans and the flat interest curve. Sources: Unicredit, Raiffeisen, Deutsche Bank

Emerging MarketsStrong growth in developed markets, improving global trade and an increase in commodity prices have had a positive impact on growth in emerging markets. The ma-jority of the growth in 2018 in these markets is expected to come again from China and India, which account for 47% of the GDP in emerging markets.

China’s GDP likely expanded by 6.9% in 2017, on the back of stronger exports and investments in infrastructure and manufacturing. In 2018, the economy is forecasted to grow by 6.4%. The economy of India grew by 6.7% in 2017, despite the remaining effects from the so-called “demonetization” at the beginning of the year. Private con-sumption was solid, but adjustments by businesses to the newly introduced goods and services tax (GST), corporate debt overhang and increased non-performing loans in the banking sector continued to weigh on weak private invest-ment. The forecast for 2018 is growth of 7.3%, backed by strong private consumption and services, improved private investment as the corporate sector adjusts to the new GST and government mitigation of weak corporate bal-ance sheets. Economic growth in sub-Saharan Africa im-proved to 2.4% in 2017 as commodity prices increased, global financial conditions remained favorable and slowing inflation lifted household demand. The region is expected to grow by 3.2% in 2018. South Africa exited recession in 2017 but GDP growth was modest at 0.8%. The main contributors to the recovery in South Africa were strong growth in the agricultural sector, expansion in the mining sector and a rebound in manufacturing. In 2018, gradual recovery in production and exports is expected to contin-ue, buoyed by solid global growth and commodity prices. GDP is forecast to grow by 1.1% in 2018. Sources: Uni-credit, Raiffeisen, World Bank, Nedbank

10_Constantia Flexibles Management Report / Economic Development

3. Business Development

3.1 Consolidation scopeThe sale of the Labels Division to Multi-Color Corporation (MCC) for an enterprise value of around €1.15 billion ($1.3 billion) was successfully completed on October 31, 2017. All competent regulatory authorities approved the transaction. Constantia Flexibles received a cash payment of around €830 million and an equity stake of 16.6% in MCC. Up to the deconsolidation date on October 31, 2017, the division generated sales of €521.9 million and EBITDA of €85.6 million.

Constantia Flexibles expanded their regional presence in the southern European pharmaceuticals and dairy markets by two acquisitions in Italy (acquisition of Constantia San Prospero S.r.l. at the end 2016 and Constantia Alucap S.r.l. in the first quarter of 2017). The newly acquired compa-nies contributed sales of €27.1 million in 2017.

2.2 Energy and Commodity Market At a price of $66 per barrel (Brent-Europe), the price of oil increased by 20% in 2017. At the end of 2017, the price of aluminum (3-month London Metal Exchange (LME) Officials) stood at $1,970 per metric ton, or an average monthly price of €1,756 per metric ton, which represents an increase of 8% in Euros. The annual LME forecast for 2018 is $2,090 per metric ton. The forecast price for oil is $67 per barrel for 2018. Sources: Harbor, INTL FCStone, FastMarkets, Goldman Sachs, Bank of America, Morgan Stanley, Federal Reserve Bank

2.3 Market Development of Flexible PackagingAccording to PCI, the global flexible packaging market grew by 4% in 2017. Developed markets grew by 2% in Europe and 4% in North America. Emerging market growth continued to be significantly higher, reaching as much as 8% in Southeast Asia and 14% in India. The mar-ket volume was diversified, with about 20% in Europe, ap-proximately 30% in North America and the remainder in the rest of the world, with a significant proportion coming from emerging Asia. At present, the market is still highly fragmented with markets global and regional competitors. The five largest suppliers hold a combined market share

of about 20% worldwide. A clear trend towards market consolidation continued in both the markets of developed countries in Europe and the United States, as well as in emerging markets. Major developments driving growth in-clude new printing technologies, as well as sustainable packaging structures, with a focus on recyclability. Sources: PCI Films Consulting, internal estimates

Food and pet foodGlobal demand for flexible packaging for food and pet food products increased by around 4% in 2017. Wider usage of stand-up pouches, bags, coffee pod and capsule systems were among the main growth drivers. Sources: PCI Films Consulting, internal estimates

PharmaceuticalsWorldwide growth in the pharmaceutical sector in 2017 ranged from low single digits in Europe up to double-digit growth in the emerging markets of Asia. Competition be-tween manufacturers of originator and generic drugs as well as ongoing industry consolidation continued to play an important role in the market dynamics. Sources: PCI Films Consulting, internal estimates

Business Development / Management Report Constantia Flexibles_11

(in € million) 2017* 2016** (restated)

Operating sales ....................................................................................................................................................................................................................................................................................................................................................................................................................................1,487.5 ...................................................................................1,461.1Operating EBITDA ............................................................................................................................................................................................................................................................................................................................................................................................................................186.3 .............................................................................................181.1EBITDA margin .........................................................................................................................................................................................................................................................................................................................................................................................................................................12.5% .........................................................................................12.4%Operating EBIT***................................................................................................................................................................................................................................................................................................................................................................................................................................108.6 .............................................................................................103.9EBIT margin ...................................................................................................................................................................................................................................................................................................................................................................................................................................................................7.3% .................................................................................................7.1%

* Result for fiscal year 2017 adjusted for €27.7 million in one-time effects (net effect from non-recurring income and expenses) (mainly strategy costs, M&A costs, reorganization and restructuring costs) / ** Results for fiscal year 2016, adjusted for (€1.4) million in one-time effects (net effect from non-recurring income and expenses), mainly M&A costs, reorganization and restructuring costs and the gain on deconsolidation from the disposal of Constantia Aluprint Plegadizos) / *** EBIT adjusted for €39.6 million in amortization of customer bases (2016: €39.2 million)

Consolidated Associates companies

As of 1/1/2017...........................................................................................................................................................................................................................................................................................................................................................................................................................................................96 .......................................................................................................................3First consolidation of Constantia San Prospero S.r.l...................................................................................................................................................................................................................................................................1 .......................................................................................................................0 First consolidation of Constantia Alucap S.r.l. .......................................................................................................................................................................................................................................................................................................1 .......................................................................................................................0 Formation of Parikh Flexibles Private Limited .....................................................................................................................................................................................................................................................................................................1 .......................................................................................................................0 Deconsolidation of Labels Division ..............................................................................................................................................................................................................................................................................................................................................(36) .......................................................................................................................0 As of 12/31/2017...........................................................................................................................................................................................................................................................................................................................................................................................................................................63 .......................................................................................................................3

Constantia Flexibles generated Group sales of €1,487.5 million in 2017 (2016: €1,461.1 million).

Organic sales growth, adjusted for exchange rate differ-ences and changes in consolidation scope, was €22.9 mil-lion or 1.6% in the fiscal year, resulting primarily from strong growth in the global pharmaceutical market offset by challenges in the food sectors of some emerging markets in the food markets.

In addition to the increase in sales, Constantia Flexibles ... increased its operating EBITDA through a combination of

Constantia Flexibles consolidation scope changed as follows during fiscal year 2017:

organic growth, the acquisition of Constantia San Prospe-ro and Constantia Alucap as well as the full-year impact of the consolidation of Oai Hung. Consequently, operating EBITDA at the Group level increased by €5.2 million to €186.3 million in 2017. This corresponds to an operating EBITDA margin of 12.5% (2016: 12.4%).

Constantia Flexibles most significant currency effects during fiscal year 2017 were from the South African rand, the Russian ruble, the US dollar and the British pound. The impact on sales growth from the appreciation of the rand and ruble against the euro exceeded the effects from the depreciation of the US dollar and British pound.

3.2 Financial Performance

12_Constantia Flexibles Management Report / Business Development

The Constantia San Prospero acquisition was initially con-solidated as of January 1, 2017, and Constantia Alucap as of March 1, 2017 – both companies are therefore not included in the 2016 annual results. They contributed €27.1 million to Group sales in fiscal year 2017. The Constantia Oai Hung acquisition was consolidated as of July 1, 2016, and therefore, only contributed 6 months to the 2016 annual results.

Constantia Flexibles posted positive growth rates globally in 2017, with the individual markets demonstrating differ-ent market dynamics.

The Europe region was characterised by modest organic growth in 2017. In terms of volume, growth was slightly positive, driven primarily by highly specialized pharmaceu-tical products and film products (e.g. confectionery pack-aging) with multinational customers as well as major regional customers. Organic growth was supported by the acquisitions in lidding solutions for the dairy sector through the acquisi tions of Constantia Alucap and San Prospero in the Pharma Sector. the acquisition of Constantia San Prospero.

The Emerging Markets region saw only stable growth dur-ing the fiscal year, resulting from difficult market circum-stances in our core countries such as Russia, India and South Africa. In additional, the weather in South Africa had a negative effect on our business in the first half of the year, above all in the construction segment. However, with their attractive population trends and economic potential, these regional growth markets outside of Europe remain in our strategic focus with targeted increases in capacity and the exploration of additional export opportunities, both by local and European plants to outside markets.The America region also posted positive growth year-on-year in 2017. Sales were increased further, above all in

the United States in the segment for blister foils, cold-form foils and lidding solutions for pet food and dairy products. Business in Mexico was less satisfactory and operating measures were launched to improve perfor-mance.

3.3 PurchasingSince the start of 2017, a dramatic deterioration has been witnessed in regard to the supply of raw materials. The resulting price movements on the market have particularly impacted solvents and inks due to fires at two major sup-pliers and massive shortage on the market and substantial price increases. The rise in the London Metal Exchange (LME) and anti-dumping and anti-countervailing duties in the US have led to upward movement in the aluminum market. However, Constantia Flexibles has guaranteed its supply across major areas thanks to the Company’s long-term hedged contracts.

Now that the global economic engine is starting to heat up, demand for energy and transport services has in-creased significantly. The of logistics sector has experi-enced noticeable capacity bottlenecks, especially in road transport, due to the shortage of drivers. All energy com-modities have seen steady energy price increase, driven in part by uncertainty regarding the CO2 trading system reforms recently adopted.

The purchasing organization of Constantia Flexibles was reorganized during the course of 2017 with the objective of strengthening strategic procurement. In the end, strate-gic procurement was put under the purview of a separate purchasing company. This was a key prerequisite for prop-er implementation of the Group’s “Focus21” project and for making a significant contribution to the Company by en abling an optimal leveraging of synergies and improved supplier relationships. In addition, comprehensive risk management allows purchasing risks such as severe price fluctuations, supplier dependencies and supply bottle-

Business Development / Management Report Constantia Flexibles_13

necks or disruptions to be reduced to a minimum. To this end, all procurement workflows were reorganized to en-sure transparent and efficient cooperation with the operat-ing purchasing departments and other Company divisions. Another focus last year was implementing our cost- saving targets. More than 900 initiatives aim to improve working capital and avoid costs in addition to realizing EBITDA-related savings. In the area of working capital, supply chain financing was implemented for direct materi-als with additional strategically important suppliers and payments terms for suppliers were generally extended. The Company also initiated a project designed to harmo-nize payment terms relating to indirect materials. The pro-ject involved reducing some 170 different payment terms approximately 20, which not only contributes to improving

Changes in total assetsThe reduction in total assets by €817.1 million is essen-tially attributable to the divestment of the Labels Division.

In addition to the disposal of the Labels Division’s non- current assets, currency translation differences reduced goodwill, intangible assets and tangible assets.

The amortization of customer bases (€49.8 million) reduced intangible assets. Depreciation of tangible assets (€88.6 million) was in line with the level of capital expenditures (€88.5 million).

working capital but also simplifies administrative process-es.

A key factor in the success of the new purchasing com-pany is the skills of our employees. That’s why 32 employ-ees took part in an extensive course last year at our Pro-curement Academy, which they completed with the title of “Certified Procurement Professional.”

We expect the commodity market to remain volatile for the most part in 2018, which will bring challenges for our pur-chasing department. However, our new purchasing struc-ture now enables more focus to be placed on procure-ment strategies and working closely together with the Group’s other departments will make a substantial contri-bution to Constantia Flexibles reaching its corporate targets.

The 16.6% stake in Multi-Color Corporation acquired dur-ing the course of the sale of the Labels Division and de-posits at banks caused the increase in other non-current assets.

The declines in inventories, trade receivables and trade payables are essentially due to the sale of the Labels Division.

The sales proceeds from the Labels Division were usedto reduce existing long-term financial liabilities. The listed bond issued in 2012 (ISIN AT0000A0V7Q0) was re-deemed in May 2017 (€129.1 million), which resultedin a reduction of current financial liabilities.

3.4 Net Assets and Financial Position

(in € million) 2017 2016 Change

Total assets ..........................................................................................................................................................................................................................................................................................................................2,329.0 ...................................................................................3,146.1 .............................................................................(26.0%)Equity* ....................................................................................................................................................................................................................................................................................................................................................1,108.1 .............................................................................................856.4 .........................................................................................29.4%Equity ratio in % ......................................................................................................................................................................................................................................................................................................47.6% .........................................................................................27.2% ...............................................................................................................................

Net debt .....................................................................................................................................................................................................................................................................................................................................................396.9 ...................................................................................1,172.2 .................................................................................(66.1%)Net gearing ratio** .............................................................................................................................................................................................................................................................................................................2.1 ............................................................................................................4.1 ...............................................................................................................................

Gearing***.......................................................................................................................................................................................................................................................................................................................................35.8% .................................................................................136.9% ...............................................................................................................................

* Including non-controlling interests/ ** Net debt/Operating EBITDA (2017: €186.3 million) / *** Net debt/equity

14_Constantia Flexibles Management Report / Business Development

The disposal of put options and contingent purchase price liabilities in connection with companies in the Labels Division as well as the reclassification of the put option for the acquisition of additional shares in Parikh Packaging Pvt. Ltd to current other liabilities are the most significant causes for the reduction in other non-current liabilities.

Deferred tax liabilities essentially include deferred taxes on customer bases presented in intangible assets. The deconsolidation of deferred taxes recognized in connec-tion with the amortization of customer bases at the Labels Division reduced deferred tax liabilities.

The sale of the Labels Division and the change in obliga-tions from company acquisitions in recent years (payment of contingent purchase price liability from the acquisition of the Spear Group and the Constantia Oai Hung Manu-facturing Joint Stock Company resulted in a decline in other liabilities.

Changes in equityThe increase in equity essentially resulted from the posi-tive net income for the year of €287.2 million, which in-cludes the deconsolidation gain of €343.9 million from the sale of the Labels Division. This is offset by a negative ef-fect from other comprehensive income of (€34.0) million mainly arising from the fair value measurement of the shares in Multi-Color Corporation acquired in connection with the sale of the Labels Division.

When the equity interests in the Afripack Group and Oai Hung were acquired in fiscal year 2016, the non-con-trolling shareholders were granted the right to sell the remaining shares to Constantia Flexibles. The present value of the put option as of the first consolidation date was determined to be €12.8 million and €35.9 million, respectively.

Changes in net debtBecause the sales proceeds were used to settle existing financial liabilities, net debt declined from €1,172.2 million to €396.9 million and the gearing changed from 136.9% to 35.8%. The ratio of net debt to operating EBITDA for the last 12 months improved from 4.1x to 2.1x.

Cash flow

(in € million) 2017 2016 Change

Cash flow from operating activities ....................................................................................................................................................................................................128.9 .............................................................................................172.2 .................................................................................(25.1%) Cash flow from investing activities ....................................................................................................................................................................................................644.9 ....................................................................................(119.4) ...............................................................................................................................

Cash flow from financing activities ...........................................................................................................................................................................................(830.0) ............................................................................................................6.8 ...............................................................................................................................

Cash and cash equivalents as of December 31, 2017 were €64.7 million.

Investments / Management Report Constantia Flexibles_15

The (€43.3) million decline in cash flow from operating activities is attributable mainly to a decrease in reported EBITDA from €280.2 million to €223.0 million (including the Labels Division and before a deconsolidation gain). The reduction of interest and tax payments by €8.0 million had a positive effect.

Cash flow from investing activities includes payments of contingent consideration in connection with the acqui-sition of Oai Hung (€14.3 million) and the Spear Group (€2.5 million) and the payment for the acquisition of Con-stantia Alucap S.r.l. (€19.8 million). Positive effects result-ed from the receipt of the proceeds of €825.1 million for the sale of the Labels Division, net of the Labels Division’s cash and cash equivalents disposed of (€42.0 million), as well as from the balances of cash and cash equivalents taken over from Constantia Alucap S.r.l. and Constantia San Prospero S.r.l. as part of their first-time consolidation (€1.3 million).

Also included are expenditures of €103.9 million for investments in tangible and intangible assets (2016: €110.3 million). The previous year’s figure mainly included a payment of contingent consideration of €35.9 million in connection with the acquisition of the Spear Group, a pay-ment of €15.1 million for the acquisition of Oai Hung, a €6.8 million payment for the acquisition of the assets of Constantia San Prospero S.r.l., Italy, as well as receipt of the payment for the sale of Aluprint Plegadizos of €40.6 million, net of cash and cash equivalents disposed of.

Cash flow from financing activities in the amount of (€830.0) million essentially resulted from the settlement of long-term borrowings that were financed from the proceeds of the sale of the Labels Division. In the previous year, cash flow from financing activities contained borrowings used to fund the contingent consideration and acquisition of Oai Hung. The cash outflows concern dividend payments of €2.2 million to non-controlling interest shareholders (2016: €5.6 million) and €2.4 million in payments for the acquisi-tion of non-controlling interests (2016: €7.7 million).

Additions to tangible and intangible assets during the re-porting period were €100.3 million (2016: €106.7 million). €27.9 million was attributable to the Labels Division dur-ing the reporting period (2016: €35.5 million).

The most important projects during the reporting period were:

• Footprint project in Germany• Narrow web printing press and laminating equipment in

Spain • Rotogravure printing press and land in India• Combination laminator in South Africa

More than 30% of the investments are associated with growth and productivity gains. All other investments served maintenance and replacement purposes and/or were due to regulatory requirements (e.g., environmental regulations).

Depreciation and amortization amounted to €146.8 million in 2017 (2016: €174.0 million). Of that amount, €88.1 million is attributable to tangible assets (2016: €104.6 million.) and €58.8 million to intangible assets (2016: €69.4 million). Depreciation and amortization attributable to the Labels Division was €29.2 million until the end of June 2017 (2016: €57.6 million for 12 months); depreciation and amortization are presented in net income from discon tinued operations.

4. Investments

5. Human Resources

Thanks to their skills and performance, the employees of Constantia Flexibles are at the core of the Company’ssuccess. Besides actively supporting organizational and change processes, the main task of our Human Resources department is to recruit personnel strategically and to foster our employees’ development. Selecting the right personnel and supporting the advancement of each and every employee are the key to the long-term financial success of Constantia Flexibles.

Constantia Flexibles is a leading manufacturer of flexible packaging worldwide. In fiscal year 2017, it again en-hanced its attractiveness as an employer. A corporate culture focused on employee development, a perfor-mance-based compensation system and attractive benefits are the Company’s bedrock.

Excluding the Labels Division, the annual average number of employees (FTE) was 7,241 in fiscal year 2017.

methods over a time span of 24 months. The ELP was created in order to provide our key managerial staff with the tools they need to implement the Group’s “Focus21” strategy, in the interest of achieving profitable growth all over the world. The program aims to enable change pro-cesses to be handled more efficiently than in the past and to position our Company as a high performer in a con-stantly changing market and social climate by establishing a joint management philosophy and a “common language” among managers. Executive Committee members took part in an intensive training program. In 2017, the first two groups successfully completed the first part of the ELP. The training initiative is set to continue in 2018. It consists of in-person training events supplemented by virtual train-ing and project work.

Constantia Flexibles training program – the Training Tool-box – continued to be rolled out in 2017. To support skills-based employee development, the selection of the training modules was fully aligned with the Company’s competency model to ensure that a separate training module was de-signed for each skillset. In 2017, we added online training courses that our employees can access via WebEx or video conferencing to supplement the in-person training events.

The entire model, which now comprises 23 competencies, maps out the skills, attitudes and characteristics that Constantia Flexibles employees are expected to utilize in order to make an optimum contribution to the Company’s success. This approach is rooted in the Company’s three core competencies:

• Driving Customer Value• Fostering Collaboration• Passion for Results

These principles guide all activities associated with organi-zational performance and human resources development.

In 2017, more than 400 employees from nearly 20 coun-tries participated in training sessions all over the world.In addition to the management-level training initiatives described above and the Company’s regular training programs, we have also established a Sales Academy. In 2017, training was provided to the first 75 employees from sales and sales-related departments following a highly competitive selection process. The multi-year train-

Development of organizational structure and human resources As in past years, the Group continued to focus on human resources initiatives and changes to the organizational structure in 2017.

Human resources developmentIn 2017, we initiated a new Executive Leadership Program (ELP). The program is based on the Constantia Flexibles competency model and involves training the Company’s top 150 managers in uniform leadership principles and

63.5%Europe11.7%America (USA/Mexico)10.8%Asia14.0%Middle East/Africa

Employees by region (in %)

12

3

4

Total FTE7,241

16_Constantia Flexibles Management Report / Human Resources

ing courses are directed at employees in our sales depart-ments as well as those responsible for technical product management and customer service.

The objective of the Sales Academy – apart from ensuring that our customers are given the best possible service – is to provide employees with the best possible conditions for achieving success in a challenging global market environ-ment by offering training modules such as “Soft Skills and Competencies,” “Technical Knowledge,” “Finance” and “Intercultural Awareness.”

All training sessions were provided via Constantia Univer-sity’s global digital learning platform as of the second half of 2016. This new learning environment aims to enable communication between learners and instructors world-wide – at any time and at any place – and to provide standardized content. It offers a centralized space that transcends the function of a mere training database and enables interactive employee development.

Organizational developmentAfter having made fundamental changes in 2017 to the structure of the Company’s sales organization and the technical organization of the Food Division (now broken down into three regional Food organizations and one inde-pendent key-account organization), new structures were also defined in the areas of job titling and compensation within the framework of the Constantia Flexibles grading system. In addition to ensuring a uniform system for as-signing job titles, the grading system is designed to facili-tate global compensation management and the integration of future acquisitions. The classification of roles and job families into pre-defined “grades” will also facilitate inter-nal and external comparability and contribute to Constan-tia Flexibles’s continued ability to compete in the market.

Additional changes were made to the structure of the Food Division in order to increase customer value even more. The changes centered on guaranteeing an ex-change of knowledge across regional and divisional bor-ders in particular, as well as enhancing our customer focus. This will ensure that customers have global access to one of Constantia Flexibles most important areas in the future as well.

In 2017, we focused on the exchange of knowledge as well as on knowledge management across borders bycreating a variety of forums for exchanging ideas. This will make us both faster and more innovative.

Development of the compensation systems and the IT environment in Human ResourcesWe also continued to support the planned, systematic ex-pansion of our IT system structure in Human Resources on the basis of SAP’s online Success Factors HR platform. This represents yet another step in the digitization of Constantia Flexibles HR landscape.

As in the past, our HR activities in 2018 will contribute to the core elements of Constantia Flexibles Human Resources strategy:

• Development of our employees at all levels• Diversity and equal opportunity• A value-driven performance culture• Ongoing development of a global corporate culture

We will be systematically pursuing these many initiatives in 2018. One of the key steps in our ongoing employee de-velopment programs is the continued implementation and expansion of our Constantia University Executive Leader-ship Program and Sales Academy, which also benefits our customers.

With respect to our technology, our main focus is on ex-panding the IT platforms in Human Resources. A uniform IT system will serve to advance the ongoing and targeted development of Human Resources at Constantia Flexi-bles. Introduction of a uniform system across the Group will enable us to establish globally standardized HR pro-cesses and leverage synergies in handling transactional processes.

Equal opportunity is just as important to Constantia Flexibles Human Resources strategy as employee de-velopment is. Constantia Flexibles integrates people from many different countries, cultural backgrounds, religious affiliations, genders and ages. This results in differing mentalities, perspectives, skills and experiences – all of which contribute to our Company’s competitiveness in the long term.

Human Resources / Management Report Constantia Flexibles_17

Annual energy consumption per output (MWh/per million m2)

Total energy consumption Electricity consumption Consumption of fossil fuels

200

150

100

50

0

2006 20102007 20112008 20122009 2013 2015 2016 20172014

18_Constantia Flexibles Management Report / Sustainability

6. Sustainability

We have consciously made responsibility for the environ-ment an integral part of our entrepreneurial activity based on the following principles:

• the need to be aware of and to minimize potential environmental risks in connection with the selection of production technologies;

• the need to utilize environmentally friendly commodities and input materials in our product portfolio;

• the need to use every opportunity to reduce air, soil and water pollution as well as greenhouse gas emissions and waste through suitable measures; and

• the need to maximize the use of resource-efficient and environmentally friendly technologies alongside the on-going optimization of material use.

Continuous improvements in the consumption of used materials – primarily aluminum, polymers, paper, varnishes and inks – are a major concern for us. Given both the steady increase in the consumption of energy and the growing scarcity of water worldwide, measures aimed at optimizing the consumption of electricity, natural gas and water are key to our success – including in economic terms.

We also continuously monitor not just the data on our con-sumption of energy and solvents, for example, but also our emissions data. Both the prevention and the disposal of waste are subject to constant monitoring. The Company has been measuring its direct and indirect emissions in accordance with the Greenhouse Gas Protocol since 2005.

A detailed analysis indicates that – through the efforts not only of Constantia Flexibles as a Group but also of individ-ual plants – the key performance indicators (KPIs) for the products generated have remained constant. Even despite the latest acquisitions and the sale of the Labels Division the trend remains stable. The following charts show that we succeeded in achieving improvements of up to 24% during the observation period.

Compared with 2005, total savings in energy consumption have surpassed 16% per output unit.

Sustainability / Management Report Constantia Flexibles_19

Change in annual energy consumptioncompared to the previous year

600,000

400,000

200,000

02016 2017

800,000

24.33%Total reduction

Electricity, steam and hot waterConsumption of fossil fuels

40,000

30,000

20,000

10,000

02016 2017

50,000

17.16%Total reduction

Change in annual solvent consumption per outputcompared to the previous year

In fiscal year 2017, the use of organic solvent could be reduced by almost 12% compared to 2005. Constantia Flexibles relies on recycling the solvents used as well as removal of emissions using regenerative thermal oxidizers in order to reduce solvent emissions. Over half of all plants in the Group have installed such equipment.

If this trend is viewed in absolute numbers, this indicates an overall reduction in energy consumption by more than 24% compared to 2016, which is attributable in particular to the sales carried out in the fiscal year.

The outcome of both the direct and the indirect effects of these efforts to boost efficiency is reflected in the carbon footprint for the Group. The goal of achieving a 40% re-duction in total Scope 1 and 2 emissions (per output) by 2023 has not changed despite the sale of the Labels Divi-sion. In 2017, Constantia Flexibles made a commitment to the Science-Based Targets Initiative and thus to defining

ambitious CO2 reduction targets taking into account the findings of climate research. The sale of the Labels Divi-sion, where the expenses per output produced are lower than in the other divisions, resulted in a slight increase in the per-output view while the emissions per sales could be further reduced.

20_Constantia Flexibles Management Report / Sustainability

120

100

80

60

40

2006 20102007 20112008 20122009 2013 2014 201720162015

Change in annual CO2emissions (base year 2005 = 100%) (in %)

Total CO2 emissions per output Scope 1 emissions per output Scope 2 emissions per annual sales

Total CO2 emissions per annual sales Scope 2 emissions per output Scope 1 emissions per annual sales

Constantia Flexibles emissions overview

Unitt CO2 equiv.

Scope 1

2016161,843.52

2016201,701.93

2017130,612.13

2017145,885.60

Change(19.30%)

Change(27.67%)

Scope 2

1 www.aluminium-stewardship.org

The following chart shows the development of individual direct and indirect emissions.

In addition to measuring the direct and indirect emissions – produced by the activities of Constantia Flexibles – and adopting measures to reduce these emissions, Constantia Flexibles also relies on numerous initiatives aimed at re-ducing Scope 3 emissions (which are caused by the up-stream value chains). Initiatives such as the Aluminium Stewardship Initiative (ASI)1 have been created to improve

the performance of raw materials at all levels of sustain-ability and along the entire value chain. Constantia Flexibles is also an active member of NPEC (New Plastics Econo-my) and the CEFLEX (Circular Economy for Flexible Packaging) initiative with the mission of further promoting the recyclability of flexible packaging in Europe and throughout the world.

Sustainability / Management Report Constantia Flexibles_21

As far as the publication of the aforementioned consump-tion and emissions data is concerned, Constantia Flexibles has decided to stick to an open communications strategy. CDP2 gave Constantia Flexibles a high Climate Score Rating in fiscal year 2017 for its highly transparent cli-mate reporting as well as for its performance in connec-tion with climate change activities. Constantia Flexibles is among the top 11% of the companies evaluated by CDP. This reflects our emissions-reduction strategy, which goes hand in hand with our commitment to the highest stand-ards of transparency in reporting.

HSSE – Health, Safety, Security & Environment Constantia Flexibles promotes the constant development of health and safety at work with the aim of continuously improving the work environment by properly managing hazards and risks to avert any potential adverse effect to people, finances, our reputation and the environment.

Acting as a global team, Constantia Flexibles integrates this approach to HSSE in our daily life. We strive to achieve our goal of “ZERO LOSS – NO HARM” for pro-tecting all our assets.

Constantia Flexibles began establishing a HSSE frame-work in 2016 to bring about specific improvements by im-plementing Group standards and providing safety leader-ship training for senior management. In 2017, Constantia Flexibles Management Board included health and safety

criteria in their own individual bonus targets. Moreover, this was applied to line management within the production network, with the goal of encouraging preventive mea-sures and creating a culture of safety within each organi-zational unit.

As part of our ongoing efforts to avert such harmful loss-es, we provide our employees and lease personnel with training to increase awareness of and better understand the hazards attached to their work.

The global HSSE community, which is directly subordinate to the executive level of the Group, consists of competent HSSE experts who support line management at all organi-zational levels in fulfilling their responsibilities by continu-ously developing and implementing safety initiatives as well as by sharing lessons learned from previous mistakes and incidents in order to prevent their reoccurrence.

Constantia Flexibles tracks the safety results Group wide using industry standard criteria: the Lost Time Injury Frequency Rate (LTIFR; per 1 million hours worked). Our safety performance improved remarkably in recent years. The LTIFR was at 7.93 at the end of 2017, compared to 10.23 in 2016. But we want to continue to learn and be-come even better because we see our responsibility for HSSE as an integral part of our daily business and co n-sider it our duty to create and maintain a safe and sustain-able work environment for our employees.

2 CDP (Carbon Disclosure Project: www.cdp.net)3 Excluding Labels Division

22_Constantia Flexibles Management Report / Report on Risks and Opportunities

7. Report on Risks and Opportunities

A systematic risk management system that serves to identify and assess risks and opportunities for Constantia Flexibles and to manage them in ways that keep them in balance is integral to the Company’s business activities.Constantia Flexibles risk management entails identifying strategic and operational risks and analyzing those Group-wide factors that are necessary for the Group’s success in the long term.

Internal management systems and communications chan-nels ensure that the risk management system is effective and efficient in handling individual identified risks. The Group’s aggregate risk position is extrapolated and as-sessed based on individual risks. The risk position of the Group has not changed fundamentally since the previous year, nor do we see at present any evidence of develop-ments that might pose a threat to the continuity of the Group’s operations in the future.

Group Internal Audit is part of the internal monitoring sys-tem within the three-lines-of-defense model. It provides support to both the Management and the Supervisory Board of Constantia Flexibles by ensuring that risks and opportunities are properly managed. The annual internal audit program ensures the regular analysis and assess-ment of the risk profiles of the Group’s operational work-flows and organizational structure. Moreover, Management is also free to call upon Group Internal Audit as necessary in connection with ad-hoc events. Regular risk-based audits of all business units safeguard the Group’s assets and support its ability to create value.

7.1 Internal Control SystemConstantia Flexibles has incrementally revised and broad-ened its internal control system in order to facilitate early detection, monitoring and proactive prevention of risks. This system is based on the standards of the international-ly proven Internal Control – Integrated Framework (COSO I) of the Committee of Sponsoring Organizations of the Treadway Commission for internal control systems. It links

the internal control system to the risk management system in line with the Enterprise Risk Management – Integrated Framework (COSO II) for Group-wide risk management systems.

These are the main characteristics of the internal control and risk management system relevant to the financial re-porting process (disclosures pursuant to Section 243a (2) Austrian Commercial Code (UGB)).

Management is responsible for establishing a suitable internal control and risk management system relevant to the financial reporting process. To this end, Management has adopted regulations and policies that must be applied Group-wide with respect to both material business risks and the financial reporting process.

The entire process model is subject to strict rules and reg-ulations that manage the risks associated with the respec-tive processes and define control activities. Among other things, these measures and rules include segregation of duties, signature authority matrices, collective signing authority for payments that is restricted to a small number of individuals and IT-supported checks based on the soft-ware in use (e.g. SAP or Microsoft Dynamics AX). Man-agement is kept informed of all relevant issues by means of a standardized, Group-wide financial reporting system as well as ad-hoc reporting on significant events. Group Internal Audit monitors compliance with the internal con-trols through its audits based on the internal audit plan that is coordinated with Group Management. The areas to be audited are selected such that business units with significant risk profiles are regularly audited. Any weak-nesses identified in the audits are analyzed in detail and improvements are developed; their implementation is mon-itored and assured. The internal control system is evaluat-ed on a continuous basis to ensure its relevance and adapted as necessary. The audit findings are reported to local management and Group Management.

In addition to the audits by Group Internal Audit, a Control Self-Assessment (CSA) has also been introduced in the Group to enable self-assessments of the internal control and risk management system. The CSA covers all of the Group’s production companies and is carried out by the local administrative heads in coordination with local man-

Report on Risks and Opportunities / Management Report Constantia Flexibles_23

agement. Group Internal Audit uses spot-checks to review the CSA findings. Steps aimed at counteracting identified weaknesses are coordinated and their implementation is tracked.

Material risks and uncertaintiesThe international business activities of Constantia Flexibles expose its assets, liabilities and forecast transactions to risks and opportunities from changes in foreign exchange rates, interest rates and stock market prices.

Group-wide management of these risks is governed by policies and processes that have not been modified since the close of the previous year. Financial risk management serves to limit and manage market risks through ongoing operational and financial activities. Derivative financial in-struments are used solely as hedging instruments.

7.2 Business RisksNatural hazard risksPreventive structural, technical and organizational meas-ures (e.g. protection against flood and fire as well as oc-cupational accidents) are taken on an ongoing basis to protect against natural hazard risks and they are refined incrementally for individual plants as necessary. All such actions are monitored and tested as to their viability. Fur-thermore, the Group’s insurance management is controlled at the Group level and adjusted accordingly.

Regulatory risksThe increase in legal requirements regarding packaging materials and production processes represents a chal-lenge to the flexible packaging industry, including with respect to continuously improving testing methods. Constantia Flexibles responds to changing parameters through continuous research and development, close co-ordination with international research institutes, ongoing analyses of the latest scientific findings, as well as contin-ual assessments of legal initiatives and requirements at the national and international level. As a member of vari-ous industry committees, the Group also plays an active role in the development of the flexible packaging industry.

Research and development risksResearch and development of products and processes are key to our success in a globally competitive environment. However, there is always the risk that R&D activities may not be timely or geared to market requirements. Constan-tia Flexibles counteracts R&D risks by commissioning rec-ognized experts, by entering into partnerships and espe-cially by maintaining close proximity to both markets and customers. The rapid increase in the number of patent applications aimed at safeguarding intangible assets and know-how also constitutes a risk. Patents may limit re-search and development activities. As a result, Constantia Flexibles actively monitors the status of its own patents and its own R&D work so that it can decide whether it needs to take action and whether its work must be pro-tected.

Production risksThe production sites of Constantia Flexibles are exposed to the risk of business interruptions due to machine fail-ures or potential product defects. The Group is expanding its emergency and crisis management to handle business interruption risks and uses regular maintenance and em-ployee training to counteract machine failure risk. It also invests in new state-of-the-art machinery in line with inter-nal policies and procedures. Business interruptions are also covered by insurance.

Production processes are continuously monitored and enhanced to reduce the risk of product defects. Risks are mitigated even further through the implementation of ISO 9001-compliant procedures and processes as well as through compliance with Good Manufacturing Practices (GMP). The Group’s production processes are also subject to frequent reviews by quality management, customers, as well as external audit and certification companies.

24_Constantia Flexibles Management Report / Report on Risks and Opportunities

Information processing risksTo ensure adequate data security and the availability of the Group’s information technology, Group-wide processes require all Group companies to perform basic IT controls with respect to IT security, IT operations and IT backup. Moreover, Group Internal Audit considers information technology as an important element and thus performs regular IT audits in connection with the Group’s annual internal audit program. Corporate-wide IT systems (e.g. ERP systems) are operated in IT shared service centers with redundant data centers. In order to ensure freedom from defects, security and excellent IT processes, all re-levant systems are combined in Group-wide data centers and managed by the IT shared service organization.

Personnel risksSuccession planning that is adjusted on a regular basis is in place for the most important corporate areas. Deputies have been appointed for all key functions. Targeted talent development in all units ensures that our know-how is continuously enhanced. The Group’s Human Resources department maintains a specialized employee training and development team. This specialized team helps to identify young talent in the Group and supports young talent, sales staff and executives through professional development programs.

Procurement risksMaster agreements on raw materials such as aluminum, plastic film, paper and chemical products are in place to minimize procurement risks. This serves to avoid delivery bottlenecks as far as possible, given the ongoing need to license new materials, optimize the supplier portfolio, en-gage in R&D and perform market research. Developments in the procurement and sales markets are regularly dis-cussed across the whole Group and actions are initiated as necessary.

Sales riskSales risks are integral to ordinary business activities. Our strategically broad range of products as well as our excel-lent market and production know-how ensure that we remain independent in our markets. Our ten largest cus-tomers only account for about 30% of Group sales. This means that Constantia Flexibles supplies a wide range of customers worldwide. Master agreements with key customers support our policy of minimizing sales risks. We also expand our product range and markets into attractive niches where innovative solutions and premium quality are a must. The continued high volatility of commodity and en-ergy prices often leads to difficult negotiations and pricing discussions with customers. Constantia Flexibles counter-acts this trend by focusing on innovative products, tech-nologies and manufacturing processes that are tailored to customers’ needs and by entering into long-term mas-ter agreements. Most of our products are delivered to cus-tomers in relatively non-cyclical sectors such as the food, pet food and pharmaceutical industries.

Legal, antitrust and competition law risksWe monitor all applicable legal requirements and develop-ments, because the activities of Constantia Flexibles take place in different jurisdictions. A comprehensive quality assurance program minimizes product liability risks. Prod-uct liability insurance and contractual arrangements counteract any remaining product liability risks.

Constantia Flexibles is also committed to fair competition. All employees of Constantia Flexibles must comply with fair competition principles and rules pursuant to EU re-quirements as well as local antitrust and competition laws. Constantia Flexibles has adopted appropriate policies regarding antitrust and competition laws to this end and monitors compliance with them. Employees are also regu-larly trained with respect to the relevant Group regulations and policies.

M&A integration risksMerger & Acquisition activities are integral to the growth strategy of Constantia Flexibles. They require significant investments and pose different risks. Constantia Flexibles carries out a structured due diligence process with the help of internal and external experts prior to every acqui-sition. The Group’s post-merger integration process begins as soon as the decision to pursue an acquisition has been made. Acquisitions in new markets also require focusing on cultural differences; the Group’s M&A process takes this into account as necessary. Constantia Flexibles integration process follows a defined procedure that is based on standardized tools and clearly delineated responsibilities.

Country risksConstantia Flexibles operates and maintains production sites in 18 countries. Requirements, business environ-ments, cultural norms and consumption trends can differ substantially in individual countries that form a part of the Company’s portfolio at present or may do so in the future. The business prospects, earnings and financial perfor-mance of Constantia Flexibles could be materially ad-versely affected if economic and political country risks were to materialize. Constantia Flexibles proactively moni-tors all countries and associated regions in which it oper-ates. Furthermore, local management teams are put in place in all countries to ensure proximity to each country’s regulatory environment. An internationally renowned ser-vice provider has been commissioned to protect our em-ployees. It consults on medical and security issues and maintains a 24/7 emergency service for all employees.

Financial risksForeign currency risk: The Group enters into forward currency transactions to minimize the foreign currency risk associated with cash flows from operating activities and the financial portfolio. Foreign currency risks are managed and measured using the at-risk approach. Risk indicators are calculated periodically per currency pair and consolidated at the Group level. Overall, 33 currency pairs are analyzed at the Group level.

The EUR/USD risk could have a currency translation ef-fect of €0.3 million on the consolidated income statement as of December 31, 2017. Given the uncertainty and high volatility of the ZAR, the risk from the EUR/ZAR ex-change rate is €0.5 million.

The risk that all 33 currency pairs will experience a nega-tive development simultaneously amounts to €3.1 million. Current foreign currency hedges will mature in 2019.

Liquidity risk: Liquidity risk denotes the risk of being un-able to raise funds at all times in order to settle financial liabilities. Hence the Group ensures that sufficient liquidity is available and/or that the necessary funding is secured through adequate credit facilities. Committed credit facilities of €165 million are available to the Constantia Flexibles Group as of December 31, 2017, to minimize the liquidity risk; €165 million thereof were undrawn as of the reporting date.

Interest rate risk: Euro interest rate swaps and interest caps that qualified as cash flow hedges were in place as of the reporting date. Under the swap contracts, Constantia Flexibles pays interest at a fixed rate on the notional value of each swap and receives a variable interest rate on the same principal in return. These interest rate swaps offset the impact on cash flows from the underlying variable-rate financial liabilities resulting due to future changes in inter-est rates. Interest rate caps limit the risk from rising inter-est rates. An interest rate of 3.02% on average is paid on financial liabilities.

A facility agreement is a significant source of funding. The funding consists of a long-term loan of €250 million and a revolving credit facility (RCF) of €125 million as of the reporting date, both maturing on October 5, 2022.

Report on Risks and Opportunities / Management Report Constantia Flexibles_25

26_Constantia Flexibles Management Report / Research and Development

Sensitivity analysis: If the interest rates in the eurozone were to increase by 1.0%, there would be an additional interest expense of €1.7 million for the financial liabilities with variable rates. A simultaneous increase in all interest rates by 1.0% would incur €2.4 million in additional inter-est expense for variable rate financial liabilities.

7.3 Business OpportunitiesBoth internal and external growth in recent years have created many opportunities for the Group on the whole as well as with respect to the optimization and diversity of our production sites. Constantia Flexibles will increasingly ex-ploit these opportunities by creating centers of excellence – not just at the production level but also at the administra-tive level. Establishing these shared services centers enables all European Group companies to benefit from the cumulated expertise of shared services experts in finance, controlling and IT from the start.

Opportunities from business growth driversThe development of new middle classes in emerging markets with rising living standards and the associated increase in the demand for our solutions – especially in the food, pet food and pharmaceutical industries – offers new opportunities for Constantia Flexibles. Additional op-portunities arise from demographic trends such as smaller households and longer life expectancy, and hence the steadily rising demand for even greater product variety and quality also need to be taken into account.

Strategic business opportunitiesThe fact that individual plants focus on certain product groups under the dedicated plant concept offers certain opportunities. At the same time, the Group is using inno-vative technologies and production processes to diversify into strategic markets and products. This will offer excel-lent opportunities in the long term, particularly in the growth regions of Asia and North America. The expansion of the portfolio and work on common specifications with sup-pliers will create yet more opportunities.

8. Research and Development

Investments in new technologiesConstantia Flexibles has traditionally measured its inno-vative strength on the basis of the many innovation prizes received from external sources as well as on the basis of the Company’s own internal Innovation Award. In 2017, the number of submissions reached a new record high of 43 contributions from 18 sites across all regions and business divisions. Sales of more than €1 million were gen-erated within just a few months of launching award-win-ning submissions such as the “Easy-Tear Pouch” from Asas̨ – very easy-to-open, straight-line packaging – and the “PBT Capsule Lidding” from Hueck – the world’s first plastic lid for PBT coffee capsules capable of withstand-ing brewing pressures of up to 12 bar.

Constantia Flexibles also received awards from external sources for its innovations. In addition to the Alufoil Trophy, which has practically become a tradition in the area of aluminum foil, the Company also received the German Packaging Award in the category of “Sustainability” for an innovation in the field of plastics. Last year’s winner of the Company’s internal award – the Constantia CompresSeal product – uses a specially developed micro embossing, which not only makes the usual PE and PP sealing foils up to 30% lighter in weight, but also enables customers to speed up their packaging processes and manufacture denser packaging due to the com-pressible sealing layer.

Research and Development / Management Report Constantia Flexibles_27

This year’s Alufoil Trophy related to the following products:

• CONSTANTIA Unshredded Wrap (category: Consumer Convenience) This product involves an aluminum foil wrapping for con-fectionery products, for example for seasonal products, where tear resistance can be significantly improved by applying a viscous, elastic coating. The chocolate chips can therefore be unwrapped all at once, in a consumer-friendly manner, without ripping the packaging.

• Bone-Shaped Container (category: Marketing & Design, submitted jointly with our Saturn Petcare customer) Development and marketing of a new type of container for wet pet food that displays the product prominently on store shelves. The bone-shaped aluminum container is additionally provided with an attractive motif on the out-side of the packaging via scatter printing. This allows any slight deformations that may have occurred during trans-port to be rendered “invisible” so that the packaging al-ways appears perfect on the shelf. This is of particular interest for the US market in which the product is sold.

• Cakees – Ready-to-Eat Cakes (category: Product Protection) Attractive, sustainable display packaging for a bakery product with a minimum shelf-life of one year. The prod-uct contains no artificial preservatives and can be dis-played and consumed right out of the package.

• Capsule for Beer Flavor Dispenser (category: Overall Excellence, submitted jointly with ABInBev) ABInBev has launched a completely new beer dispens-ing technology on the market that enables bars and restaurants to dispense individually flavored beers from a single keg. In addition to being 100% recyclable and having excellent barrier properties thanks to the alumi-num structure of the capsules, this technology meets the highest standards for design and puncture resist-ance in dispensing systems.

The outstanding development work being undertaken at the Competence Center for Aluminum Foil and Foil Laminates in the area of efficient pre-treatment of alumi-num foil now not only enables the production of BPA-free, sterilizable laminates for containers, for example, but also

results in a generally higher level of laminate solidity, even without using special primers. An investment in a produc-tion-scale facility was approved after successful comple-tion of the pre-development work.

Constantia Flexibles is also part of the “NanoPack” EU research project. The Company is the sole converter in a consortium made up of renowned research institutions and branded manufacturers in various market segments whose R&D activities are subsidized by the European Commission. Approved at the start of 2017, the project aims to make use of new types of nano technologies to create packaging with antimicrobial characteristics, includ-ing in the headspace, i.e., with no direct contact between the product and the packaging.

The renovation work on the Teich site laboratory building was used to enable new technologies such as ultrasound sealing as well as a tensile testing machine for high tem-peratures.

The Competence Center for Polymer Films and Film Laminates reached a new capacity utilization record in the area of analytics. This relates not only to the number of measurements conducted but also to the internal cus-tomer breadth, which now covers nearly all Group loca-tions and regions.

Good progress was also made in the ongoing develop-ment of our standardized range of PE sealing foils in con-nection with reducing complexity. A new production facility as well as a facility for testing the efficient production of small batches and specialty products were commissioned on schedule around the end of the first half of 2017. This allows PE foils to be immediately developed and techni-cally approved not only for Hueck itself, but also for its affiliate sites in Poland, Spain and Turkey.

The PE foils are being developed in close collaboration with our team at the Parikh (India) site, particularly with respect to the strategically important area of recycling- friendly packaging made of 100% PE. In order to rein-force the network formally as well and create a closer network between the respective experts, a second Com-petence Center for Polymer Films and Film Laminates was officially inaugurated in the fall of 2017 at the Group’s annual R&D Conference.

28_Constantia Flexibles Management Report / Events after the Reporting Period

Final purchase price for the sale of the Labels Division agreed onConstantia Flexibles successfully completed the sale of its Labels Division to Multi-Color Corporation at the end of October for an enterprise value of around €1.15 billion. The final purchase price has been calculated and both parties have accepted this calculation.

Increase in production capacity in IndiaConstantia Flexibles announced the investment of a double-digit million euro amount in the expansion of capacity of its Indian sub si diary, Parikh Packaging in Ahmedabad, Gujarat. The groundbreaking ceremony took place in mid-2017 at a new location near Parikh Packaging’s existing plant.

Increase shareholding in Parikh Packaging in IndiaConstantia Flexibles increased the stake in its Indian sub-sidiary, Parikh Packaging in Ahmedabad, Gujarat, in 2018 from 75% to 100%.

Acquisition of shares in Creative Polypack Ltd in IndiaIn March 2018, Constantia Flexibles buy a majority (70%) stake in Creative Polypack Ltd in India. This will further expand the market position of the Constantia Flexibles Group in the Indian market. Subject to the approval by the relevant competition authorities, the acquisition will be completed in the coming weeks. The parties have agreed to keep the financial details of the transaction confidential.

9. Events after the Reporting Period

Substantial progress was also achieved in certain areas of plastics barrier foil development, for example in the development of a PE-based, recycling-friendly barrier foil. Due to these results, the Management Board approved an investment at the Hueck site in a metallization system that additionally enables barrier coating using transparent, ceramic aluminum oxide.

In the Pharma Division, a brand new Product Excellence Center for Laminates (PEC Laminates) was opened in January 2017. The Pharma Division takes advantage of this product-based R&D platform to make excellent tech-nical support available to both manufacturers and custom-ers and as a basis for developing additional innovations in the area of laminates.

With further support provided by PEC Laminates, this has made it possible to develop a new generation of

child-proof, senior-friendly packaging whose production is optimized and ultimately commercialized. The Pharma Division also succeeded in tapping into a new market seg-ment by developing laminates for tubular bags with valves – for instance for foam dispensers – which must meet the strictest standards in this market.

In addition, the Pharma Division hosted the Constantia Flexibles annual R&D Conference at Constantia Tobepal in Burgos (Spain) in 2017.

Expenditures for research and development amounted to €13.3 million during the reporting period (2016: €10.5 million). Of this amount, €9.0 million was recog-nized in the income statement and €4.3 million was capi-talized in the balance sheet for the reported period. After the sale of the Labels Division, 81 people were employed in R&D at the end of fiscal year 2017.

Outlook for 2018 / Management Report Constantia Flexibles_29

Market outlookConstantia Flexibles is active in the fl exible packaging market, which is largely independent of cyclical fl uctua-tions. The long-term growth factors are driven by the glob-al megatrends, which promote the substitution of rigid packaging through fl exible packaging solutions. These megatrends include urbanization, sustainability, healthcare, and emerging middle classes.

The packaging industry is expected to experience further growth in 2018, with strong growth rates in the emerging markets and a recovery in mature markets such as Europe and North America:

• Europe: 1–2% • North America: 3–4% • South America: 3–4%• India: approx. 12%• Africa: 5–6%• Southeast Asia: 8–9%Sources: PCI, internal management forecasts

Company outlookIn 2018, we will drive forward the implementation of our “Focus21” strategy to strengthen profi tability and competi-tiveness, as well as secure our role as preferred supplier to our customers worldwide. We will also maintain a strong cost discipline and strengthen our centralized procure-ment activities, as well as our sales initiatives with a focus on innovations. The year 2018 will see us pursue targeted acquisitions in the Food and Pharma Divisions. In addition, we will continue to strengthen our fi lm-based portfolio of products through investments in new technology and site expansions. We will additionally continue to roll out our ex-tensive information technology project to modernize and harmonize our existing infrastructure and networks.

The Management of Constantia FlexiblesVienna, April 4, 2018

Alexander BaumgartnerChief Executive Offi cer

Stephan KühneChief Financial Offi cer


10. Outlook for 2018

IFRSCONSOLIDATED

FINANCIALSTATEMENTS

2017

32_Constantia Flexibles xxxxxxxxx

Consolidated Balance Sheet

32_Constantia Flexibles IFRS Consolidated Financial Statements / Consolidated Balance Sheet

AS OF DECEMBER 31, 2017Assets (in € thousand) Note 12/31/2017 12/31/2016

Goodwill ................................................................................................................................................................................................................................................................................................................................................H1 .............................................................................460,371 .........................................................................770,417 Intangible assets ..................................................................................................................................................................................................................................................................................................H1 .............................................................................508,623 .............................................................................826,999 Tangible assets ..........................................................................................................................................................................................................................................................................................................H1 .............................................................................573,950 .............................................................................785,689 Investments in associates .................................................................................................................................................................................................................................................H2 .......................................................................................................773 .............................................................................................1,232 Other non-current and financial assets ..........................................................................................................................................................................H3 .............................................................................281,693 .....................................................................................43,887 Deferred tax assets ..........................................................................................................................................................................................................................................................................................I7 .....................................................................................11,784 .....................................................................................13,577Non-current assets .......................................................................................................................................................................................................................................................................................................................................................................................1,837,194 ....................................................................2,441,800 Inventories....................................................................................................................................................................................................................................................................................................................................H4 .............................................................................215,401 .............................................................................275,846 Trade receivables ...............................................................................................................................................................................................................................................................................................H5 .............................................................................152,220 .............................................................................242,363 Tax receivables............................................................................................................................................................................................................................................................................................................................................................................................................................4,961 .............................................................................................9,620 Other receivables ..............................................................................................................................................................................................................................................................................................H6 .....................................................................................54,537 .....................................................................................53,772 Cash and cash equivalents ...................................................................................................................................................................................................................................................................................................................................................64,717 .............................................................................122,706Current assets .............................................................................................................................................................................................................................................................................................................................................................................................................................491,836 ..............................................................................704,306 Total assets ...................................................................................................................................................................................................................................................................................................................................................................................................................................2,329,030 ....................................................................3,146,107

Equity and liabilities (in € thousand) Note 12/31/2017 12/31/2016

Share capital .........................................................................................................................................................................................................................................................................................................................................................................................................................................................35 ...............................................................................................................35 Reserves ..................................................................................................................................................................................................................................................................................................................................................................................................................................1,105,657 .............................................................................856,136Equity attributable to shareholders ........................................................................................................................................................................................................................................................................................1,105,691 ..............................................................................856,170 Non-controlling interests ......................................................................................................................................................................................................................................................................................................................................................................2,436 .......................................................................................................227Total equity................................................................................................................................................................................................................................................................................................................................................H7 ....................................................................1,108,127 ..............................................................................856,397 Provisions .......................................................................................................................................................................................................................................................................................................................................H8 .....................................................................................61,608 .....................................................................................63,220 Interest-bearing financial liabilities ..................................................................................................................................................................................................H9 .............................................................................505,421 ...................................................................1,154,521 Other non-current liabilities.........................................................................................................................................................................................................................................H9 .....................................................................................60,069 .............................................................................149,776 Deferred tax liabilities ..............................................................................................................................................................................................................................................................................I7 .............................................................................156,497 .............................................................................262,382 Non-current liabilities ...................................................................................................................................................................................................................................................................................................................................................................................783,596 ....................................................................1,629,899 Provisions .......................................................................................................................................................................................................................................................................................................................................H8 .....................................................................................55,088 .....................................................................................58,302 Interest-bearing financial liabilities ..................................................................................................................................................................................................H9 .....................................................................................18,704 .............................................................................155,470 Trade payables .............................................................................................................................................................................................................................................................................................................H9 .............................................................................256,252 .............................................................................308,382 Tax liabilities ...........................................................................................................................................................................................................................................................................................................................H9 .....................................................................................21,946 .....................................................................................26,742 Other current liabilities ...................................................................................................................................................................................................................................H9, H10 .....................................................................................85,319 .............................................................................110,914Current liabilities ...............................................................................................................................................................................................................................................................................................................................................................................................................437,308 ..............................................................................659,810 Total equity and liabilities ..................................................................................................................................................................................................................................................................................................................................................2,329,030 ....................................................................3,146,107

xxxxxxxxxxxxxx Constantia Flexibles_33

Consolidated Income Statement

Consolidated Income Statement / IFRS Consolidated Financial Statements Constantia Flexibles_33

FOR FISCAL YEAR 2017(in € thousand) Note 2017 2016 (adjusted)

Continuing operations

Sales ..........................................................................................................................................................................................................................................................................................................................................................................................I1 ....................................................................1,487,465 ....................................................................1,461,149 Cost of sales .................................................................................................................................................................................................................................................................................................................................................................................................... (1,248,923) ...........................................................(1,215,890)Gross profit ..............................................................................................................................................................................................................................................................................................................................................................................................................................................238,543 ..............................................................................245,260 Selling expenses ................................................................................................................................................................................................................................................................................................................................................................................................. (97,302) .............................................................................(97,374) Research and development expenses ......................................................................................................................................................................................................................................................................................(8,981) .....................................................................................(7,312) Administration expenses ...................................................................................................................................................................................................................................................................................................................................................... (97,796) .............................................................................(94,952) Other operating income ...................................................................................................................................................................................................................................................................I2 .....................................................................................11,912 .....................................................................................23,069 Other operating expenses ...................................................................................................................................................................................................................................................I5 ....................................................................................(5,144) .....................................................................................(2,576)Earnings before interest and tax (EBIT) ...............................................................................................................................................................................................................................................................................41,230 ......................................................................................66,115 Interest income ..........................................................................................................................................................................................................................................................................................................................................................................................................................3,849 .............................................................................................1,330 Interest expense ...........................................................................................................................................................................................................................................................................................................................................................................................(118,590) .............................................................................(80,728) Other financial income and expense........................................................................................................................................................................................................................................................................................................4,246 .............................................................................(11,491)Net financial income and expense .............................................................................................................................................................................................................I6 .....................................................................(110,495) .............................................................................(90,890) Income/(loss) from associates .......................................................................................................................................................................................................................................................................................................................................(225) ...............................................................................................................68Earnings before tax (EBT) ...................................................................................................................................................................................................................................................................................................................................................(69,490) .............................................................................(24,707) Current taxes............................................................................................................................................................................................................................................................................................................................I7 ............................................................................ (16,530) .............................................................................(27,003) Deferred taxes ....................................................................................................................................................................................................................................................................................................................I8 .....................................................................................11,671 .....................................................................................13,367Income tax.........................................................................................................................................................................................................................................................................................................................................................................................................................................................(4,860) .............................................................................(13,636)Income after tax continuing operations ................................................................................................................................................................................................................................................................................................................................................................................(74,350) .............................................................................(38,343) Discontinued operations Result discontinued operations....................................................................................................................................................................................................................................................................................................................361,521 .....................................................................................37,060 Net income after tax ..........................................................................................................................................................................................................................................................................................................................................................................................287,171 .....................................................................................(1,283)Thereof attributable to: Equity holders of the parent......................................................................................................................................................................................................................................................................................................................................275,327 .............................................................................(11,133) Non-controlling interests ..............................................................................................................................................................................................................................................................................................................................................................11,844 .............................................................................................9,850


Consolidated Statementof Comprehensive Income

34_Constantia Flexibles IFRS Consolidated Financial Statements / Consolidated Statement of Comprehensive Income

FOR FISCAL YEAR 2017(in € thousand) Note 2017 2016

Net income/(loss) after tax .................................................................................................................................................................................................................................................................................................................................................287,171 .....................................................................................(1,283) Items that will be reclassified subsequentlyto profit or loss under given circumstances...............................................................................................................................................................................................................................................(34,443) ......................................................................................11,466 Effective portion of changes in fair value of cash flow hedges ....................................................K .............................................................................................5,526 .......................................................................................................784 Gain/(loss) through changes in fair value .......................................................................................................................................................................................................................................................12,322 .....................................................................................(2,224) Transfer to profit and loss account ............................................................................................................................................................................................................................................................................................(6,795) .............................................................................................3,009 Change in available-for-sale reserve ................................................................................................................................................................................................K ............................................................................ (29,352) .......................................................................................................................0 Gain/(loss) through changes in fair value .............................................................................................................................................................................................................................................. (29,352) .......................................................................................................................0 Currency translation differences ............................................................................................................................................................................................................................................................................................................(10,002) .....................................................................................12,255 Changes in exchange differences recognized on translation of foreign subsidiaries................................................................................................................................................................................................................................................................................(3,549) .............................................................................................6,436 Transfer to profit and loss account .........................................................................................................................................................................................................................................................................................................(6,453) .............................................................................................5,819Apportioned deferred taxes .............................................................................................................................................................................................................................................................................................................................................................................(615) .....................................................................................(1,573)Items that will not be reclassified to profit or loss ....................................................................................................................................................................................................................................394 .....................................................................................(1,497) Change in employee benefits reserve ................................................................................................................................................................................H8 ..............................................................................................................................................................................................................................................................

Actuarial gains/(losses).........................................................................................................................................................................................................................................................................................................................................................................224 .....................................................................................(2,759) Apportioned deferred taxes ....................................................................................................................................................................................................................................................................................................................................................169 .............................................................................................1,261Other comprehensive income for the period.........................................................................................................................................................................................................................................(34,049) ..............................................................................................9,969Total comprehensive income for the period ...............................................................................................................................................................................................................................................253,122 ..............................................................................................8,686Thereof attributable to: Equity holders of the parent from continuing operations ..................................................................................................................................................................................................................................................................................................................................(121,794) .............................................................................(37,330) Equity holders of the parent from discontinued operations .............................................................................................................................................................................................................................................................................................................................366,049 .....................................................................................34,470 Non-controlling interests ......................................................................................................................................................................................................................................................................................................................................................................8,867 .....................................................................................11,546

xxxxxxxxxxxxxx Constantia Flexibles_35

Consolidated Cash Flow Statement

Consolidated Cash Flow Statement / IFRS Consolidated Financial Statements Constantia Flexibles_35

FOR FISCAL YEAR 2017(in € thousand) Note 2017 2016

Earnings before tax (EBT) ........................................................................................................................................................................................................................................................................................................................................................308,989 ......................................................................................10,453+/(–) Net interest .........................................................................................................................................................................................................................................................................................................................................................................................................119,365 .....................................................................................85,583 +/(–) Profit or loss from associates...................................................................................................................................................................................................................................................................................................................................225 .......................................................................................................(68)+/(–) Depreciation and amortization/(reversal) of tangible and intangible assets .....................................................................................................................................................................................................................................................H1 .............................................................................147,351 .............................................................................173,997 +/(–) Gain/(loss) upon disposal of tangible and intangible assets .....................................................................................................................................................................................................................................................................................................................................................................(343,661) .....................................................................................(7,732)+/(–) Other non-cash (income)/expenses....................................................................................................................................................................................................................................................................................2,080 .............................................................................................5,237Cash flow from the result............................................................................................................................................................................................................................................................................................................................................................234,350 ..............................................................................267,470+/(–) Inventory ....................................................................................................................................................................................................................................................................................................................................................................................................................... (19,278) .............................................................................................1,052+/(–) Trade receivables ......................................................................................................................................................................................................................................................................................................................................................................... (13,248) .............................................................................(11,023) +/(–) Trade payables ...............................................................................................................................................................................................................................................................................................................................................................................................22,633 .....................................................................................32,691+/(–) Other receivables .........................................................................................................................................................................................................................................................................................................................................................................................2,943 .....................................................................................(5,555)+/(–) Provisions .........................................................................................................................................................................................................................................................................................................................................................................................................................(7,126) .............................................................................(14,159)+/(–) Other liabilities ........................................................................................................................................................................................................................................................................................................................................................................................................2,583 .............................................................................................3,666(–) Tax payments .............................................................................................................................................................................................................................................................................................................................................................................................. (30,780) .............................................................................(35,095)+ Interest received ..............................................................................................................................................................................................................................................................................................................................................................................................3,545 .............................................................................................1,356 (–) Interest paid ..................................................................................................................................................................................................................................................................................................................................................................................................... (66,677) .............................................................................(68,174)Cash flow from operating activities..................................................................................................................................................................................................................................................................................................128,944 ..............................................................................172,228 + Sales of tangible and intangible assets ....................................................................................................................................................................................................................................................................1,081 .............................................................................................2,696(–) Investments in tangible and intangible assets.........................................................................................................................................................................................................(103,867) .....................................................................(110,318)+ Disposal of subsidiaries, less cash transferred .......................................................................................................................J .............................................................................783,054 .....................................................................................40,647(–) Acquisition of subsidiaries, less cash transferred ..........................................................................................................J ............................................................................ (35,267) .............................................................................(44,256)+/(–) Proceeds/(payments) other financial investments ...................................................................................................J ......................................................................................................(64) .....................................................................................(8,218)Cash flow from investing activities .....................................................................................................................................................................................................................................................................................................644,936 ......................................................................(119,448)+ Increase of financial liabilities...................................................................................................................................................................................................................J .............................................................................366,524 .....................................................................................42,562(–) Redemption of financial liabilities ..............................................................................................................................................................................................J .......................................................... (1,193,329) .............................................................................(22,489)+ Capital contribution ..............................................................................................................................................................................................................................................................H7 .............................................................................................1,503 .......................................................................................................................0(–) Payments to non-controlling interests ..........................................................................................................................................................H7 ....................................................................................(2,428) .....................................................................................(7,684)(–) Dividends paid to non-controlling interests ................................................................................................................................H7 ....................................................................................(2,234) .....................................................................................(5,577)Cash flow from financing activities ...........................................................................................................................................................................................................................................................................................(829,965) ..............................................................................................6,812 Change in cash and cash equivalents due to exchange rate differences.................................................................................................................(1,904) .............................................................................................1,716Change in cash and cash equivalents ................................................................................................................................................................................................................................................................................(57,989) ......................................................................................61,308 Cash and cash equivalents at the beginning of the period .......................................................................................................................................................................................122,706 .....................................................................................61,398Cash and cash equivalents at the end of the period .....................................................................................................................................................................................................64,717 ..............................................................................122,706


Consolidated Statement of Changes in Equity

36_Constantia Flexibles IFRS Consolidated Financial Statements / Consolidated Statement of Changes in Equity

FOR FISCAL YEAR 2017 ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT(in € thousand)

Share Capital Hedging Available- capital reserve reserve for-sale- reserve

Balance as of January 1, 2017 ................................................................................................................................................................................................35 .........................................................................................0 ...................................................(6,757) .....................................................................................0 Other comprehensive income ...................................................................................................................................................................................................................................................................................................................................................................................................4,997 ...........................................(29,352)Net income after tax ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Business combinations .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Change in consolidated Group .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Transactions with equity holders of the parent .............................................................................................................................................................................................................................................................................................................................................................................................................. Acquisition of non-controlling interests .......................................................................................................................................................................................................................................................................................................................................................................................................................................................... Capital increase ......................................................................................................................................................................................................................................................................................................................................................1,503............................................................................................................................................................................................... Share-based payments ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ Deconsolidation Labels Division................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Dividends ...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Subtotal ...............................................................................................................................................................................................................................................................................................................................................0 ...............................................................1,503.........................................................................................0 .....................................................................................0 Balance as at December 31, 2017 ........................................................................................................................................................................35 ................................................................1,503.......................................................(1,760) .......................................(29,352)

Balance as at January 1, 2016 .................................................................................................................................................................................................35 ................................................927,450.......................................................(6,456) .....................................................................................0Other comprehensive income ....................................................................................................................................................................................................................................................................................................................................................................................................(263) .....................................................................................0Net income after tax ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Business combinations .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Change in consolidated Group .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Transactions with equity holders of the parent ..............................................................................................................................................................................................................................................................................................................................................................................................................

Acquisition of non-controlling interests ....................................................................................................................................................................................................................................................................................................................................(38) .............................................................................................

Call-/Put Options ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Reclassification Verstraete in mould labels N.V. ............................................................................................................................................................................................................................................................................................................................................................................................................. Release of capital reserves .................................................................................................................................................................................................................................................................(927,450)...............................................................................................................................................................................................

Deconsolidation Aluprint Plegadizos ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Dividends ...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Subtotal ...............................................................................................................................................................................................................................................................................................................................................0 .......................................(927,450).........................................................................(38) .....................................................................................0 Balance as at December 31, 2016 ........................................................................................................................................................................35 .........................................................................................0.......................................................(6,757) .....................................................................................0

xxxxxxxxxxxxxx Constantia Flexibles_37Consolidated Statement of Changes in Equity / IFRS Consolidated Financial Statements Constantia Flexibles_37

ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT NON- EQUITY CONTROLLING INTERESTS

Foreign Employee Retained Total currency benefits earnings translation reserve reserve

............................................................(2,309) .................................................................................3,641 .....................................................861,561 ..............................................................................856,170 ...................................................................................227 ..............................................................................856,397

........................................................... (7,110) ...........................................................................................394 ...................................................................................................................................................................................(31,072) ...............................................................(2,977) .............................................................................(34,049)

.............................................................................................................................................................................................................................................................................275,327 ..............................................................................275,327 ................................................................11,844 ..............................................................................287,171

.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................................................................................................................................................................0 .................................................................................................................................................................................................................................0

.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

......................................................................................19 ........................................................................................................................................................................................(111) ......................................................................................................(92) .........................................................................(236) ...............................................................................................(328)

............................................................................................................................................................................................................................................................................................................................................................................................................................1,503 ........................................................................................................................................................................................................1,503

............................................................................................................................................................................................................................................................................................3,855 .............................................................................................3,855 ........................................................................................................................................................................................................3,855

........................................................................................................................................................................................................89 .............................................................................(89) .......................................................................................................................0 ...............................................................(4,188) .....................................................................................(4,188)

.................................................................................................................................................................................................................................................................................................... .................................................................................................................................................0 ...............................................................(2,234) .....................................................................................(2,234)

......................................................................................19 ..................................................................................................89 ...................................................................3,655 .............................................................................................5,266 ...............................................................(6,658) .....................................................................................(1,392)

............................................................(9,400) .................................................................................4,124 ..........................................1,140,543 ....................................................................1,105,691 ........................................................................2,436 ....................................................................1,108,127

....................................................(12,015) .................................................................................5,085 ...................................................(20,621) ..............................................................................893,477 ...............................................................(3,562) ..............................................................................889,915

............................................................10,032 ........................................................................(1,497) ...................................................................................................................................................................................................8,273 ........................................................................1,696 ..............................................................................................9,969

............................................................................................................................................................................................................................................................................(11,133) .............................................................................(11,133) ........................................................................9,850 .....................................................................................(1,283)

.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................................................................................................................................................................0 ................................................................17,151 ......................................................................................17,151

.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

......................................................................(326) ..................................................................................................36 ...........................................................(1,170) ....................................................................................(1,498) ...............................................................(3,552) .....................................................................................(5,050)

................................................................................................................................................................................................... ........................................................................(31,850) .............................................................................(31,850) ....................................................... (16,878) .............................................................................(48,728)

....................................................................................................................................................................................................................................................................................(1,099) ....................................................................................(1,099) ........................................................................1,099 .......................................................................................................................0

.............................................................................................................................................................................................................................................................................927,450 .......................................................................................................................0 .................................................................................................................................................................................................................................0

........................................................................................................................................................................................................17 .............................................................................(17) .......................................................................................................................0 .................................................................................................................................................................................................................................0

......................................................................................................................................................................................................................................................................................................................................................................................................................................................0 ...............................................................(5,577) .....................................................................................(5,577)

......................................................................(326) ..................................................................................................53 ....................................................893,315 ............................................................................(34,447) ....................................................... (24,908) .............................................................................(59,354)

............................................................(2,309) .................................................................................3,641 .....................................................861,561 ..............................................................................856,170 ...................................................................................227 ..............................................................................856,397

Notes to the Consolidated Financial Statements

38_Constantia Flexibles IFRS Consolidated Financial Statements / Notes to the Consolidated Financial Statements

A. General

Reporting entityConstantia Flexibles Holding GmbH (“Constantia Flexibles”, the “parent company,” or the “Company”) is a company domiciled in Austria. The address of the registered head-quarters of the Company is 1200 Vienna, Rivergate, Handelskai 92. The Company is registered at the Vienna Commercial Court under the commercial register num-ber FN 425945s. The Company’s consolidated financial statements for the fiscal year ended December 31, 2017, include the Company and its subsidiaries (referred to joint-ly as the “Constantia Flexibles Group” and individually as “Group entities”). The Group is one of the world’s leading manufacturers of flexible packaging, and supplies numer-ous multinational corporations and local market leaders in the food, pet food, pharmaceutical, and beverage in-dustries. In recent years, the Group has evolved from a provider with a regional focus in Europe into a global group with a presence in the most attractive and fastest growing international markets for flexible packaging. Constantia Flexibles represents premium positioning, technology leadership, a customer focus, and highly effi-cient production facilities. The Austrian holding and parent company makes strategic investments in companies within this business sector.

The shareholders of Constantia Flexibles GmbH, the fund advised by One Equity Partners (OEP), and the H. Turnauer Foundation sold their majority stake in the Constantia Flexibles Group to Wendel in a deal that closed on March 26, 2015. Because of this acquisition, the new ultimate Austrian group parent is Constantia Flexibles Holding GmbH. The immediate parent company of Constantia Flexibles Holding GmbH is Constantia Lux S.à.r.l.

The consolidated financial statements of Constantia Flexibles Holding GmbH were prepared because this company is the ultimate parent company in Austria.

Basis of preparationThe consolidated financial statements for the fiscal year from January 1 to December 31, 2017, were prepared in accordance with the International Financial Reporting

Standards (IFRSs) and the interpretations of the Inter-national Financial Reporting Standards Interpretations Committee (IFRS IC) issued by the International Account-ing Standards Board (IASB) as adopted by the European Union, that were required to be applied in 2017, and in accordance with Section 245a of the Austrian Commer-cial Code (Unternehmensgesetzbuch, UGB).

The consolidated financial statements of Constantia Flexibles Holding GmbH are prepared on a going concern basis. Details of the accounting policies, including the changes made to those policies, can be found in Sections E, H, I, and K.

The consolidated income statement was prepared using the cost of sales (function of expense) method in accordance with IAS 1.

B. Reporting Currency and Currency Translation

Functional currency and presentation currencyThese consolidated financial statements are presented in euros, the functional currency of the parent company. The consolidated financial statements are prepared in thou-sands of euros. Numerous amounts and percentages re-ported in the consolidated financial statements have been rounded, so totals may differ from the amounts presented.

Foreign currency transactionsForeign currency transactions are translated into the rele-vant functional currency of the Group entities at the trans-action date using the exchange rate prevailing at that time. Monetary assets and liabilities denominated in a foreign currency at the closing date are translated into the func-tional currency at the closing rate. Non-monetary assets and liabilities measured in a foreign currency at fair value are translated at the exchange rate prevailing at the date when fair value was determined. Currency translation dif-ferences from the translation of transactions are generally recognized in profit or loss for the period.

In the reporting period, income from exchange rate differ-ences (operating result and net financial income and ex-pense) in the amount of €695 thousand was recognized in the income statement (2016: €2,921 thousand).

Notes to the Consolidated Financial Statements / IFRS Consolidated Financial Statements Constantia Flexibles_39

Reference rate at Annual average the balance sheet date rate 2017 12/31/2017

United Arab Emirates Dirham .....................................................................................................................................................................................................................................AED .............................................................................4.40665 .............................................................................4.13964Australian Dollar ...............................................................................................................................................................................................................................................................................................................AUD .............................................................................1.53460 .............................................................................1.47325Canadian Dollar ...................................................................................................................................................................................................................................................................................................................CAD .............................................................................1.50390 .............................................................................1.46544Chinese Yuan/Renminbi....................................................................................................................................................................................................................................................................CNY .............................................................................7.80440 .............................................................................7.61532Czech Koruna ..............................................................................................................................................................................................................................................................................................................................CZK .....................................................................25.53500 .....................................................................26.41292Danish Krone ...............................................................................................................................................................................................................................................................................................................................DKK .............................................................................7.44490 .............................................................................7.43813British Pound ................................................................................................................................................................................................................................................................................................................................GBP .............................................................................0.88723 .............................................................................0.87313Indonesian Rupiah ..........................................................................................................................................................................................................................................................................................................IDR ...........................................16,278.29000 ............................................15,094.47583Indian Rupee ....................................................................................................................................................................................................................................................................................................................................INR .....................................................................76.60550 .....................................................................73.37019Malaysian Ringgit .........................................................................................................................................................................................................................................................................................................MYR .............................................................................4.85360 .............................................................................4.84991New Romanian Leu .............................................................................................................................................................................................................................................................................................RON .............................................................................4.65850 .............................................................................4.56383Polish Zloty .............................................................................................................................................................................................................................................................................................................................................PLN .............................................................................4.17700 .............................................................................4.26218Russian Ruble ...........................................................................................................................................................................................................................................................................................................................RUB .....................................................................69.39200 .....................................................................65.75519Swedish Krona .........................................................................................................................................................................................................................................................................................................................SEK .............................................................................9.84380 .............................................................................9.62213Singapore Dollar ...........................................................................................................................................................................................................................................................................................................SGD .............................................................................1.60240 .............................................................................1.55484Turkish Lira ...............................................................................................................................................................................................................................................................................................................................................TRY .............................................................................4.54640 .............................................................................4.07296US Dollar .......................................................................................................................................................................................................................................................................................................................................................USD .............................................................................1.19930 .............................................................................1.12490Vietnamese Dong .........................................................................................................................................................................................................................................................................................................VND ...........................................27,246.26000 ............................................25,610.97417South African Rand .................................................................................................................................................................................................................................................................................................ZAR .....................................................................14.80540 .....................................................................15.03438

Foreign operationsAssets and liabilities of Group entities whose functional currency is not the euro, including goodwill and fair value adjustments arising on acquisition, are translated into eu-ros at the closing rate at the reporting date. The income and expenses of foreign operations are translated on a monthly basis using the monthly average exchange rate.

Currency translation differences are recognized in other comprehensive income and shown in the currency trans-lation reserve in equity, to the extent that the currency translation difference is not allocated to non-controlling interests.

Upon the disposal of a foreign operation, the correspond-ing cumulative amount in the currency translation reserve

is reclassified to the income statement as part of the dis-posal gain/loss. In the case of only partial disposal without loss of control of the subsidiary, the corresponding por-tion of the cumulative amount of the currency translation difference is allocated to non-controlling interests. If the settlement of monetary items in the form of receivables or liabilities from or to a foreign operation is neither planned nor likely to occur in the foreseeable future, the resulting foreign exchange gains and losses are recognized as part of the net investment in the foreign operation.

Currencies relevant to the GroupThe exchange rates of the currencies relevant to Constantia Flexibles Holding GmbH are as follows:


C. Consolidation Methods

Basis of consolidationThe consolidated financial statements comprise Constantia Flexibles Holding GmbH and the subsidiaries it controls. The Group controls a company in accordance with IFRS 10 if all of the following criteria are met:

• it has power over the investee;• it is exposed, or has rights, to variable returns from the

Group’s involvement in the investee;• it has the ability to use its power over the investee to

affect the amount of the Group’s returns.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control begins and until the date on which control ceases.

If the Group loses control of a subsidiary, it derecognizes the assets and liabilities of the subsidiary and any related non-controlling interests and other components of equity. Any gain or loss is recognized in the income statement. Any retained interest in the former subsidiary is measured at fair value at the date on which control was lost.

The Group treats transactions with non-controlling inter-ests that do not result in a loss of control as transactions with owners of the Group in their capacity as owners. Any difference between the fair value of the consideration paid and the acquired interest in the carrying amount of the net assets of the subsidiary resulting from the acquisition of a non-controlling interest is recognized in equity. Gains and losses arising on the disposal to non-controlling interest shareholders are also recognized in equity.

The annual financial statements of the consolidated enti-ties included in the consolidated financial statements are based on uniform accounting policies. The balance sheet date for the vast number of consolidated companies is December 31, 2017. Parikh Packaging Pvt. Ltd. and Parikh Flexibles Private Ltd. have different balance sheet dates. Additional financial information as of December 31, 2017, has been prepared for consolidation purposes.

Business combinationsThe Group accounts for business combinations using the acquisition method, which is the only method permitted by IFRS 3, on the date when the Group obtains control. The consideration transferred for the acquisition and the iden-tifiable net assets acquired are generally measured at fair value. Any resulting goodwill is tested annually for impair-ment in accordance with IAS 36. A bargain purchase is recognized immediately in profit or loss. Costs related to acquisitions are recognized as expenses in the periods in which they are incurred.

Non-controlling interestsNon-controlling interests are measured at their propor-tionate share of the net identifiable assets of the acquiree at the acquisition date.

Changes in the Group’s investment in a subsidiary that do not result in a loss of control are accounted for as an equity transaction.

Associates and joint venturesAssociates are entities over which the Group has a signi ficant influence, but not control or joint control, in respect of their financial and operating policies. Associates are accounted for using the equity method. The carrying amount of associates is increased or reduced each year to reflect changes in the share of their equity attributable to Constantia Flexibles. Consolidation differences arising on the initial inclusion of equity method investments are accounted for using the same principles as for the con-solidation of subsidiaries. Changes in the Group’s pro-portionate equity interest affecting profit or loss, including any impairment losses on goodwill, are recognized in the share of profits or losses of equity method investments.

A joint venture is an arrangement of which the Group has joint control, whereby it has rights to the net assets of the arrangement instead of rights to its assets and obligations for its liabilities. The Group does not hold interests in any joint ventures at this time.


Transactions eliminated on consolidationIntercompany balances and transactions and any unreal-ized income and expenses arising from intercompany transactions are eliminated when preparing the consoli-dated financial statements. As part of the consolidation of intercompany balances, intercompany trade receivables and other receivables are offset against the corresponding intercompany liabilities.

The material effects from first consolidations and decon-solidations are explained below.

1. Acquisitions

2017 reporting periodFirst consolidation of San Prospero S.r.l., Italy,on January 1, 2017The Constantia Flexibles Group acquired the Italian company Constantia San Prospero S.r.l. on November 7, 2016. A purchase price of €6,772 thousand was agreed

D. Acquisitions and Other Changes to theScope of Consolidation The scope of consolidation of the Constantia Flexibles Group (excluding the parent) changed in the reporting period as follows:

upon. The acquisition of Constantia San Prospero S.r.l. gives the Constantia Flexibles Group better access to the southern European pharma market, extending its industry-leading service close to the customer.

The company is domiciled in Modena and was founded in 1963. Its main service is the cutting of aluminum blister foil and cold-form foil for major pharmaceutical companies. The equity investment was recognized as of December 31, 2016, as an “other financial instrument”; the entity was initially consolidated on January 1, 2017.

Fully consolidated companies Associated companies

Balance as of January 1, 2017 ..........................................................................................................................................................................................................................................................................................................................................................................96 .......................................................................................................................3First consolidation of Constantia San Prospero S.r.l...................................................................................................................................................................................................................................................................1 .......................................................................................................................0 First consolidation of Constantia Alucap S.r.l. .......................................................................................................................................................................................................................................................................................................1 .......................................................................................................................0 Formation of Parikh Flexibles Private Ltd. ..........................................................................................................................................................................................................................................................................................................................1 .......................................................................................................................0 Deconsolidation of Labels Division ..............................................................................................................................................................................................................................................................................................................................................(36) .......................................................................................................................0 Balance as of December 31, 2017.........................................................................................................................................................................................................................................................................................................................................63 .......................................................................................................................3


(in € thousand) Fair value as of 1/1/2017

Intangible assets ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5 Tangible assets .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................4,282 Deferred tax asset .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................306 Non-current assets .................................................................................................................................................................................................................................................................................................................................................................................................................................................. .........................................................................4,593 Inventories ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,118 Trade receivables .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,044 Other receivables...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................487 Cash and cash equivalents .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................962 Current assets.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................. .........................................................................3,611Total assets ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8,203 Provisions (non-current) ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................167 Deferred tax liabilities ...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................472 Non-current liabilities .................................................................................................................................................................................................................................................................................................................................................................................................................................... ...................................................................................639 Provisions (current) ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................76 Trade payables ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................... ........................................................................1,376 Other current liabilities ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................2,424 Interest-bearing financial liabilities (current)...................................................................................................................................................................................................................................................................................................................................................................................................77 Current liabilities................................................................................................................................................................................................................................................................................................................................................................................................................................................................ .........................................................................3,954Total liabilities ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................4,593Acquired net assets......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3,610Purchase Price ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................6,772Goodwill ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3,162

The recorded goodwill is not tax deductible.

The fair value of the trade receivables was €1,044 thou-sand. The gross amount of the trade receivables acquired was €1,044 thousand.

Contribution to consolidated net income: Constantia San Prospero S.r.l. made the following contributions to the Group in fiscal year 2017: sales of €11,419 thousand, earnings before interest, taxes, depreciation, and amorti-zation (hereinafter EBITDA) of (€246) thousand, and net income after tax of (€639) thousand.

First consolidation of Constantia TR Alucap S.r.l.,Italy, on March 1, 2017The Constantia Flexibles Group acquired the Italian com-pany Constantia TR Alucap S.r.l. on March 1, 2017. A

purchase price of €20,366 thousand was agreed upon. The acquisition of Constantia TR Alucap S.r.l. expands the Constantia Flexibles Group’s market share in the Italian dairy sector.

Constantia TR Alucap S.r.l. has over 50 employees and is domiciled in Borgo Valsugana near Trento, the region that is home to the largest number of yoghurt manufacturers in Italy. Until the acquisition, the plant was owned by two private equity firms and reported annual sales of almost €20 million. The company specializes in manufacturing aluminum die-cut lids and plastic films for local dairies and international food manufacturers.

The following table shows an overview of the assets and liabilities as of the date of first consolidation.



Intangible assets ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8,676 Tangible assets .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................4,607 Other non-current assets ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1 Deferred tax asset .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................7 Non-current assets ...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13,291 Inventories ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3,123 Trade receivables .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................4,452 Other receivables...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................390 Tax receivables ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................57 Cash and cash equivalents .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................348 Current assets.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8,369Total assets ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21,660 Provisions (non-current) ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................837 Interest-bearing financial liabilities (non-current) .......................................................................................................................................................................................................................................................................................................................................................2,500 Deferred tax liabilities .........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................2,911 Non-current liabilities .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................6,248 Trade payables ...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3,920 Other current liabilities ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................721 Tax liabilities .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................111 Interest-bearing financial liabilities (current).................................................................................................................................................................................................................................................................................................................................................................................1,454 Current liabilities.........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................6,207Total liabilities ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12,455Acquired net assets......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................9,206Purchase Price ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................19,823Outstanding Purchase Price ..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................543Goodwill ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11,160

The recorded goodwill is not tax deductible.

The fair value of the trade receivables was €4,452 thou-sand. The gross amount of the trade receivables acquired was €4,532 thousand.

Contribution to the net result: In fiscal year 2017, Constantia TR Alucap S.r.l. contributed sales of € 15,668 thousand, EBITDA of €2,735 thousand, and net income after tax of €1,108 thousand.


2016 reporting periodFirst consolidation of Afripack Group, South Africa, on January 1, 2016The Constantia Flexibles Group signed a purchase agreement for 95% of the shares of the Afripack Group on July 9, 2015. A purchase price of €31,138 thousand and a call/put option in the amount of €12,775 thousand (also see Section K. Financial Instruments) were agreed upon as of the acquisition date. There was a purchase price adjustment of €1,321 thousand in fiscal year 2017. The goodwill from the acquisition amounts to €22,066 thousand as of the date of first consolidation.

First consolidation of Pemara Labels Group, Australia, on January 1, 2016Constantia Flexibles acquired 100% of the shares of the Pemara Group, Australia, on November 9, 2015. A purchase price of €22,127 thousand and contingent consideration at the acquisition date amounting to €7,613 thousand (also see Section K. Financial Instru-ments) were stipulated. The goodwill from the acquisition amounts to €16,352 thousand as of the date of first consolidation.

First consolidation of Oai Hung, Vietnam, on July 1, 2016The Constantia Flexibles Group signed a purchase agreement for 51% of the shares of Constantia Oai Hung Manufacturing Joint Stock Company (“Oai Hung”) on April 27, 2016. A purchase price of €15,066 thousand was agreed upon. As of the date of first consolidation, contingent consideration of €13,128 thousand and a call/put option in the amount of €35,953 thousand were presented. The goodwill from the acquisition amounts to €13,430 thousand as of the date of first consolidation.

Contingent consideration: The Constantia Flexibles Group has contractually agreed to grant the seller an additional future purchase price based on earnings (earn-out agreement). The valuation of the contingent purchase price component is based on fair value Level 3. For more information, see Section K. Financial Instruments.

2. Deconsolidation

2017 reporting periodDeconsolidation of the Labels Division on October 31, 2017On October 31, 2017, Constantia Flexibles successfully completed the sale of the Labels Division to Multi-Color Corporation at an enterprise value of around €1.15 billion (USD 1.3 billion). All responsible regulatory authorities approved the transaction. Constantia Flexibles received a cash payment and will also be included in the future success of Multi-Color Corporation with an equity stake of 16.6%.

Following the presentation logic on discontinued opera-tions, Consolidated Income Statement for prior period is restated by Labels Division effects. Total comprehensive income of the group is presented as all operations of Labels Division have been discontinued by the beginning of the prior period.



Goodwill ..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................321,137 Intangible assets ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................274,703 Tangible assets .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................199,491 Financial assets .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................74,335 Other non-current assets ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5,737 Deferred tax asset ...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8,363 Non-current assets ...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................883,766 Inventories ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................72,940 Trade receivables .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................102,076 Other receivables.........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................46,428 Tax receivables ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3,684 Cash and cash equivalents .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................42,046 Current assets.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................267,174Total assets ..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,150,940 Provisions (non-current) ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,019 Interest-bearing financial liabilities (non-current) .......................................................................................................................................................................................................................................................................................................................................126,266 Other non-current liabilities ...................................................................................................................................................................................................................................................................................................................................................................................................................................................................70,450 Deferred tax liabilities .........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................102,150 Non-current liabilities .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................299,886 Provisions (current) ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................120 Trade payables .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................72,487 Other current liabilities ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................160,822 Tax liabilities .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................7,112 Interest-bearing financial liabilities (current).................................................................................................................................................................................................................................................................................................................................................................................4,787 Current liabilities.........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................245,328Total liabilities ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................545,214Net assets disposed of ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................605,726 Sales price (payments) .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................698,538 Sales price (shares)......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................240,501 Total ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................939,039 Net assets disposed of ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(605,726) Non controlling interest..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5,201 Cumulative exchange loss in respect of the net assets of the subsidiary........................................................................................................................................................................................................................................................5,418 Gain on disposal ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................343,932 Consideration received (payments) ..................................................................................................................................................................................................................................................................................................................................................................................................................................................698,538 Payment received for intragroup financing ..........................................................................................................................................................................................................................................................................................................................................................................................................126,562 Cash and cash equivalents disposed of ...........................................................................................................................................................................................................................................................................................................................................................................................................................(42,046) Net cash inflows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................783,054


(in € thousand) 1–10/2017 1–12/2016

Sales ...............................................................................................................................................................................................................................................................................................................................................................................................................................................................517,293 ............................................................................................... 600,981Other operating income ...........................................................................................................................................................................................................................................................................................................................................................................1,758 ..................................................................................................................5,630Expenses .................................................................................................................................................................................................................................................................................................................................................................................................................................(463,317) ..........................................................................................(558,126) Earnings before interest and tax (EBIT) .........................................................................................................................................................................................................................................................55,734 ...........................................................................................................48,485 Net financial income and expense .............................................................................................................................................................................................................................................................................................................................129 ..................................................................................................(13,325) Income tax ..................................................................................................................................................................................................................................................................................................................................................................................................................................(13,258) ..................................................................................................................1,900 Net income after tax ............................................................................................................................................................................................................................................................................................................................................................................42,605 ...........................................................................................................37,060 Deconsolidation result ....................................................................................................................................................................................................................................................................................................................................................................343,932 ............................................................................................................................................0 Project expenses ...............................................................................................................................................................................................................................................................................................................................................................................................(21,317) ............................................................................................................................................0 Termination tax group ...............................................................................................................................................................................................................................................................................................................................................................................(3,700) ............................................................................................................................................0 Result discontinued operations ...................................................................................................................................................................................................................................................................................................361,521 ...........................................................................................................37,060

(in € thousand) 1–10/2017 1–12/2016

Cash flow from operating activities .......................................................................................................................................................................................................................................................................................................49,592 ....................................................................................................... 62,846Cash flow from investing activities ..................................................................................................................................................................................................................................................................................................(31,027) ..................................................................................................(70,314)Cash flow from financing activities ...........................................................................................................................................................................................................................................................................................................................477 ..........................................................................................................20,480 Change in cash and cash equivalents due to exchange rate differences......................................................................................................(561) ............................................................................................................................197 Change in cash and cash equivalents ...................................................................................................................................................................................................................................................................18,481 ...........................................................................................................13,208

2016 reporting periodDeconsolidation of Aluprint Plegadizos S de R.L. de C.V. on November 1, 2016On May 25, 2016, the Constantia Flexibles Group sold all shares of Aluprint Plegadizos S de R.L. de C.V. (“Aluprint Plegadizos”), Mexico, to Grupo Gondi, Mexico. A purchase price of €50,581 thousand and contingent consideration as of the date of deconsolidation of €7,000 thousand were stipulated. The contingent consideration receivable is clas-sified as available for sale. It is measured based on Level 3 inputs in the fair value hierarchy. For more information,

see Section K. Financial Instruments. Goodwill of €4,134 thousand was disposed of in connection with the transaction.

3. Other changes in the scope of consolidation

2017 reporting periodParikh Flexibles Private Limited was founded with its registration in the official Indian Register of Companies on July 12, 2017.

Contribution to the consolidated cash flow statement:In fiscal years 2017 and 2016, the Labels Division contributed the following values to the individual categories of the consolidated cash flow statement.

Contribution to the group result


2016 reporting periodConstantia Flexibles Poland Holding Sp. z o.o. was formed on its entry in the official Court Registry (Poland) on December 23, 2015.

Constantia Flexibles Germany GmbH was merged with Austria Metall Deutschland GmbH as the acquiring com-pany by virtue of the merger agreement dated August 2, 2016, and the resolutions by the shareholder meetings on the same date. Austria Metall Deutschland GmbH was then renamed Constantia Flexibles Germany GmbH by a shareholder resolution dated October 6, 2016.

E. Accounting Policies

The following main accounting policies were applied to the preparation of the consolidated financial statements of Constantia Flexibles Holding GmbH.

Current and non-current assets and liabilitiesAssets and liabilities with a residual term of up to 1 year are classified as current; those with a residual term of more than a year as non-current. Residual terms are always determined on the basis of the reporting date.

Intangible assets and goodwill

GoodwillGoodwill arising from business combinations is recognized as an asset at cost less accumulated impairment losses in accordance with IFRS 3.

It is tested for impairment each year and whenever there are indications of impairment. Any impairment loss is im-mediately recognized in the consolidated income state-ment. Goodwill impairment losses are not reversed.

Other intangible assetsOther intangible assets relate to purchased intellectual property rights, licenses, patents, concessions, trademarks, and capitalized development costs.

Other intangible assets acquired by the Constantia Flexibles Group and that have finite useful lives are measured at cost less accumulated amortization and impairment losses.

Research and developmentExpenditures on research activities are recognized in the income statement as incurred. Development costs are capitalized only if the following can be demonstrated in accordance with IAS 38.57:

• the technical feasibility of completing the intangible asset so that it will be available for use or sale;

• Constantia Flexibles intends to complete the intangible asset and to use or sell it;

• Constantia Flexibles is able to use or sell the intangible asset;

• the intangible asset will probably generate future economic benefits;

• adequate technical, financial, and other resources to complete the development and to use or sell the intangible asset; and

• Constantia Flexibles is able to reliably measure the expenditure attributable to the intangible asset during its development.

Other development costs are recognized as expenses for the period. Capitalized development costs are measured at acquisition cost less accumulated amortization and accu-mulated impairment losses.

In fiscal year 2017, €8,981 thousand (2016: €7,312 thousand) in expenditures for research and development activities were recognized as an expense. Capitalized development costs in the reporting period amounted to €4,329 thousand (2016: €3,175 thousand).

Separate acquisitions (additional acquisition costs)In accordance with IAS 38, separate acquisitions are rec-ognized only when they increase the future economic ben-efits embodied in the asset to which they relate and they can be reliably measured. All other expenses, including expenses for an internally generated brand name, are recognized in the income statement for the period.


Amortization of intangible assetsIntangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization is recog-nized in the income statement. Goodwill is not amortized.

• Patents, brands, software, capitalized development costs, and other assets: 1 to 10 years

• Customer relationships: 15 years

The amortization methods, useful lives, and residual values are reviewed at each reporting date and adjusted as necessary.

Tangible assets

Recognition and measurementIn accordance with IAS 16, tangible assets are measured at cost less accumulated depreciation and impairment losses.

If parts of an item of tangible assets have different useful lives, they are recognized as separate items (major com-ponents) of tangible assets.

Any gain or loss on the disposal of an item of tangible assets is recognized in profit or loss.

Subsequent costsSubsequent expenditures are capitalized only when it is probable that future economic benefits associated with the expenditures will flow to the Group.

In accordance with IAS 16.14, costs for regular major maintenance that are a condition for continuing to operate an item of tangible assets are recognized as a replace-ment in the carrying amount of the asset if the recognition criteria are met. Any remaining carrying amount of the cost of the previous maintentance is derecognized.

DepreciationDepreciation is calculated in order to write off the cost of items of tangible assets, less their estimated residual val-ues, by the straight-line method over their estimated use-ful lives. Depreciation is recognized in the income state-ment. Leased assets are depreciated over the shorter of the term of the lease or the useful life of the asset unless it is reasonably certain that the title will pass to the Group at the end of the lease. Land is not depreciated. For the current fiscal year and comparative years, the es-timated useful lives of significant items of tangible assets are as follows:

• Offices, factories, and other buildings: 25 to 50 years

• Technical plant and machinery: 6 to 50 years

• Other equipment, operating and office equipment: 4 to 12 years

The amortization methods, useful lives, and residual values are reviewed at each reporting date and adjusted as necessary.

Financial instrumentsThe Group classifies primary financial assets into the fol-lowing categories in accordance with IAS 39:Financial assets,

• Measured at fair value through profit or loss • Held-to-maturity investments • Loans and receivables • Available-for-sale financial assets

Recognition and derecognition of primary financial assets and liabilitiesRecognition: The Group recognizes both loans and receivables and issued debt securities as of the date on which they arise. All other financial assets and liabilities are initially recognized at the trade date.

Derecognition: The Group derecognizes a financial as-set when the contractual rights to the cash flows from an asset expire or when it transfers the rights to receive the cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are


also transferred. Derecognition also takes place when the Group transfers substantially all the risks and rewards of ownership and does not retain control of the trans-ferred asset.

Financial liabilities are derecognized when the contractual obligations are discharged, cancelled, or expire.

Financial assets and liabilities are offset and reported net in the balance sheet if the Group has a legally enforceable right to offset the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Measurement of primary financial assetsFinancial assets measured at fair value through profit or loss: A financial asset is measured at fair value through profit or loss if it is held for trading or designated as such at initial recognition. Attributable transaction costs are rec-ognized in the income statement as incurred. Financial as-sets that are measured at fair value through profit or loss are recognized at fair value. Any remeasurement gain or loss is recognized in profit or loss. The recognized net gain or loss includes any dividend or interest earned on the financial asset and is reported in the income statement.

Held-to-maturity investments: These assets are initially measured at their fair value plus directly attributable trans-action costs. They are subsequently measured at amor-tized cost using the effective interest method.

Loans and receivables: Upon initial recognition, these as-sets are measured at their fair value plus directly attribut-able transaction costs. They are subsequently measured at amortized cost using the effective interest method.

Trade receivables: These are classified as “loans and re-ceivables” and are carried at amortized cost. If collectabil-ity is doubtful, customer receivables are measured at the lower present value of the estimated future cash flows. In addition to the required specific valuation allowances, identifiable risks from the general credit risk are taken into account by recognizing specific impairment allowances calculated on a portfolio basis.

Cash and cash equivalents: Cash and bank deposits are measured at cost. They include cash on hand, bank call deposits, and other short-term, highly liquid invest-ments with a maximum term of three months at the date of acquisition.

Available-for-sale financial assets: These assets are ini-tially measured at their fair value plus directly attributable transaction costs. In the course of subsequent measure-ment, available-for-sale financial assets are measured at fair value, and corresponding changes in value (with the exception of impairment losses) are recognized in other comprehensive income and presented in the available-for-sale reserve in equity. If an asset is derecognized, the accumulated other comprehensive income is reclassified to the income statement. Shares in other companies for which no quoted price in an active market is available and whose fair value cannot be determined reliably are mea-sured at cost.

Measurement of primary financial liabilitiesPrimary financial liabilities are initially recognized at fair value less directly attributable transaction costs. These financial liabilities are subsequently measured at amor-tized cost using the effective interest method.

EquityThe costs directly attributable to capital issuances arerecognized as a deduction from equity.

In accordance with Austrian law, additional capital con-tributions by the shareholders are included in the capital reserve.


Derivative financial instruments and hedge accountingThe Group holds derivative financial instruments to hedge against price, currency, and interest rate risks. Under cer-tain conditions, embedded derivatives are separated from the host contract and recognized separately.

Initially, derivatives are recognized at fair value, and attrib-utable transaction costs are recognized in the profit and loss account when incurred. Derivatives are subsequently measured at fair value. Any resulting changes are general-ly recognized in the income statement.

Cash flow hedges: For derivatives that are designated as hedges against the risk of variability in cash flows, the ef-fective portion of the derivative’s fair value change is rec-ognized in other comprehensive income and shown in the hedging reserve in equity. The ineffective portion of fair value changes is recognized in the income statement for the period.

The cumulative amount recognized in equity initially re-mains in other comprehensive income and is reclassified to the income statement in the same period or periods in which the hedged item affects profit or loss.

Hedge accounting is discontinued insofar as the hedg-ing instrument no longer meets the criteria for hedge ac-counting, expires or is sold, terminated, exercised, or no longer designated as a hedging instrument. If a forecast transaction is no longer expected to occur, the cumulative amount previously recognized in equity is reclassified to the income statement.

Physical aluminum stocks are hedged by means of for-ward sales on the London Metal Exchange (LME). They are subsequently measured at fair value.

Fair value hedges: In fair value hedges, both the hedged risk of the hedged item and the derivative hedging instru-ment are measured at fair value through profit or loss.

Hedge accounting is discontinued if the Group terminates the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for the purpose of hedging. At this time, the adjustment to the carrying amount of the hedged item attributable to the hedged risk starts being reversed to profit and loss.

Put optionsThe Constantia Flexibles Group has entered into purchase obligations to non-controlling interests of its subsidiaries. As a result of these agreements, the non-controlling in-terest shareholders have the right to tender their shares for sale at previously established conditions. At the time the agreements were entered into, none of them resulted in the transfer of material opportunities and risks to the Constantia Flexibles Group. A liability is recognized in the amount of the present value of the probable future exercise price. This amount is reclassified from a separate item within non-controlling interests and reported separately as a lia-bility. Reclassification occurs regardless of the probability of exercise. Any difference between the amount of liabili-ties and non-controlling interests is recognized directly in equity. The unwinding of the discount on the liability is recognized in interest expense, and changes in value are recognized in other net financial income and expense.

Impairment

Non-financial assetsApart from inventories and deferred tax assets, the carry-ing amounts of non-financial assets are reviewed at each reporting date in order to determine whether there are in-dications of impairment. If this is the case, the recoverable amount of the asset is estimated. Goodwill and intangible assets with an indefinite useful life are tested for impair-ment annually.


To determine whether impairment exists, the assets are combined into the smallest group of assets that gener-ates cash inflows from continuing use and that are large-ly independent of the cash inflows from other assets or cash-generating units (CGUs). Goodwill acquired in a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the merger. As a rule, the lowest level at the Constantia Flexibles Group corresponds to individual operating com-panies or groups of operating companies.

The recoverable amount of an asset or CGU is the high-er value of its value in use and fair value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their present value, using a pre-tax dis-count rate that reflects current market movements of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amountof an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in the income state-ment. Impairment losses that are recognized in respect of CGUs are first allocated to the goodwill attributed to the CGU and subsequently allocated to the carrying amount of the other assets of the CGU on a pro rata basis.

Goodwill impairment losses are not reversed. For other assets, an impairment loss is reversed only to the extent that the carrying amount of the asset does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Primary financial assetsA financial asset that is not classified at fair value through profit or loss is reviewed at each reporting date in order to determine whether there is an objective indication of impairment.

Objective indications that impairment losses have occurred on financial assets are:

• the failure or default of a debtor;• the restructuring of an amount owed to the Group on

terms that the Group would otherwise not consider;• notification that a debtor or issuer will enter bankruptcy;• adverse changes in the payment status of borrowers

or issuers;• the disappearance of an active market for a security; and• observable data pointing to a substantial reduction of

expected payments by a group of financial assets.

For an equity instrument held, a significant or prolonged decline in the fair value below its historical cost is consid-ered an objective indication of impairment.

Financial assets measured at amortized costThe Group considers indications of impairment for these financial assets both at the level of the individual asset and at the collective level. All assets that are of signifi-cance individually are assessed for specific impairment. Those assets that turn out not to be specifically impaired are then collectively assessed for any impairment that has occurred but has not yet been identified. Assets that are not significant on their own are collectively assessed for impairment by grouping together assets with similar risk characteristics.

In assessing collective impairment, the Group uses his-torical information about the timing of revenue and the amount of losses incurred, adjusted for the exercise of judgment by management as to whether the current eco-nomic and credit conditions are such that the actual loss-es are likely to be greater or less than the losses that would be expected based on historical trends.

An impairment loss is calculated as the difference be-tween the carrying amount and the present value of esti-mated future cash flows, discounted at the original effec-tive interest rate of the asset. Losses are recognized in the income statement and presented in other operating


expenses. If the Group has no realistic prospects of recov-ering the asset, the asset is derecognized. If an event that occurs after the recognition of the impairment loss results in a reduction of the amount of the impairment loss, the reduction of the impairment loss is recorded in the income statement.

Available-for-sale financial assetsThe impairment of available-for-sale financial assets is recognized in the income statement by reclassification of the accumulated gains or losses in the available-for-sale reserve in equity. The cumulative gain or loss reclassified from equity to the income statement is the difference be-tween the acquisition cost, less any principal repayment and amortization, and the current fair value, less any im-pairment losses previously recognized in the income state-ment. If the fair value of an impaired available-for-sale debt instrument increases in a subsequent period and the increase can be objectively traced back to an outcome oc-curring after impairment was recognized, the impairment loss is reversed, and the amount of the reversal is record-ed in the income statement. In other cases, a reversal is recognized in other comprehensive income. An impairment loss recognized for shares in companies that are mea-sured at cost because fair value cannot be reliably deter-mined may not be reversed.

InventoriesIn accordance with IAS 2, inventories are measured at the lower of cost and net realizable value. The cost of raw materials, consumables, and supplies is based on the mov-ing average price method. In the case of manufactured products (unfinished and finished products), cost includes an appropriate share of the production overheads based on normal operating capacity (prorated material and pro-duction overheads). General administration and selling expenses are not capitalized.

Net realizable value is the selling price attainable in the normal course of business less the estimated costs re-quired to complete the product and the necessary costs to make the sale. Inventory risks arising from the storage period and from reduced marketability are covered by appropriate valuation allowances.

Capital managementThe aim of the Constantia Flexibles Group is to keep a strong capital base so as to maintain investor, creditor, and market confidence and to ensure the sustainable development of the Company. Management regularly monitors the return on capital and seeks a balance be-tween the increase in the rate of return that could be achieved with a higher debt ratio and the advantages of a stable capital base. For more information see Section K. Financial Instruments.

Employee benefits (IAS 19)

Short-term employee benefitsObligations under short-term employee benefits are rec-ognized as an expense when the employees render the related service. A liability is recognized for the amount ex-pected to be paid when the Group has a present legal or constructive obligation to pay this amount as a result of service rendered by the employee, and the obligation can be estimated reliably.

Defined contribution plansObligations for contributions to defined contribution plans are recognized as an expense as soon as the related ser-vice is rendered. Prepaid amounts are recognized as an asset to the extent that a claim arises for a refund or reduction of future payments.

Defined benefit plansThe net obligation of the Group regarding defined benefit plans (pension plans, termination benefits) is calculated separately for each plan by estimating future benefits that employees have earned in the current period and in previ-ous periods. This amount is discounted and the fair value of any plan assets is subtracted from this.


The calculation of the defined benefit obligations is per-formed annually by accredited actuaries using the project-ed unit credit method.

Revaluations of the net liability for defined benefit plans are recognized directly in other comprehensive income. The revaluation includes the actuarial gains and losses, the return on plan assets (to the extent that it is not in-cluded in the net interest expense), and the impact of any asset ceiling (to the extent that it is not included in the net interest expense). The Group determines the net in-terest expense (income) in respect of the net liability (as-set) for defined benefit plans for the reporting period by applying the discount rate used for the measurement of the defined benefit obligation at the beginning of the an-nual reporting period. This discount rate is applied to the net defined benefit liability (asset) at this time. In this case, any changes in the net defined benefit liability (asset) that arise due to the contribution and benefit payments during the reporting period are considered. Net interest expense is recognized in net financial income and expense and other expenses for defined benefit plans are recognized in personnel expenses.

If the benefits of a plan are changed or a plan is curtailed, the resulting change in the past service cost or the gain or loss from the curtailment is recognized in the income statement for the period. The Group recognizes gains and losses resulting from the settlement of a defined benefit plan at the time of settlement.

Other long-term employee benefitsThe Group’s net obligation regarding long-term employee benefits comprises future benefits that employees have earned in return for work performed in the current peri-od or in previous periods. These benefits are discounted to determine their present value. Revaluations are recog-nized in the income statement for the period. The net in-terest expense and the impact of an interest rate change on revaluation are recognized in net financial income and expense.

Benefits upon termination of contractBenefits upon termination of contract are recognized as expenses at the earlier of the following dates: when the Group cannot withdraw the offer of such benefits or when

the Group recognizes costs for restructuring. If benefits are not expected to be completely settled within twelve months after the reporting date, they are discounted.

Share-based paymentsThe Group has cash-settled share-based payment plans for which the Company receives services from employees of the Constantia Flexibles Group as consideration.

The services and the liability arising are recognized at the fair value of the liability. The services do not qualify for rec-ognition as assets and are therefore recognized as ex-penses. Details on share-based payments can be found in the Personnel Expenses section.

Other provisionsIn accordance with IAS 37, other provisions are recog-nized where present legal or constructive obligations to third parties arise from past transactions or events that are expected to result in an outflow of assets, the amount of which can be reliably measured.

The actual amount of non-current provisions is determined by discounting the expected future cash flows using a pre-tax rate that reflects current market conditions with regard to the time value of money and the risks specific to the liability. The unwinding of the discount is presented in net financial income and expense.

LeasesAssets that are held by the Constantia Flexibles Group under a lease in which all the risks and rewards of owner-ship are transferred to the Group are classified as finance leases according to IAS 17. Upon initial recognition, the leased asset is recognized in the amount of the lower of its fair value and the present value of the minimum lease payments. After initial recognition, the asset is measured in accordance with the applicable accounting method for this asset.


Minimum lease payments under finance leases are appor-tioned between the finance expense and the reductionof the outstanding liability. The finance expense is dis-tributed over the term of the lease in such a way as to achieve a constant rate of interest on the remaining debt over the periods.

Assets from other leases are classified as operating leas-es and are not recognized in the Group’s balance sheet. Payments made under operating leases are recognized in the income statement on a straight-line basis over the term of the lease.

Revenue recognitionRevenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, receipt of the consideration is probable, the associated costs and possible returns can be estimated reliably, there is no continuing managerial involvement in the goods, and the amount of revenue can be measured reliably. Revenue is recorded net of returns, discounts, and rebates.

Government grants compensating the Constantia Flexibles Group for expenses incurred are recorded as scheduled in the income statement in the periods in which the expens-es are recognized. In fiscal year 2017, government grants of €1,760 thousand (2016: €1,330 thousand) were rec-ognized in profit or loss.

Government grants for assets are recognized at fair value if there is reasonable certainty that they will be received and the conditions attached to the grant are met. Gov-ernment grants do not reduce the cost of the assets for which they were granted, but are recognized as deferred income and recognized in other operating income over the expected useful life of the related asset.

Interest income is recognized as the income statementusing the effective interest method.

Borrowing costsIn determining production costs, borrowing costs are only included if they relate to a qualifying asset in accordance with IAS 23 (Borrowing Costs). A qualifying asset is a non-financial asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized in the income statement in the period in which they occur.

In accordance with IAS 23, Constantia Flexibles has rec-ognized borrowing costs in the income statement since the recognition criteria for a qualifying asset were not met.

Income taxes (IAS 12)The tax expense comprises current and deferred taxes. Current and deferred taxes are recognized in profit or loss, except to the extent to which they are associated with a business combination or an item recognized directly in eq-uity or in other comprehensive income.

Current taxesCurrent taxes are the expected tax liability or tax receivable on the taxable income for the fiscal year or the tax loss on the basis of the tax rates applicable or substantively ap-plicable at the reporting date and any adjustment to taxes payable with respect to previous years.

Deferred taxesDeferred taxes are recognized in respect of temporary dif-ferences between the carrying amounts of assets and li-abilities for consolidated financial reporting purposes and the amounts used for tax purposes. Deferred taxes are not recognized for:


• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and affects neither accounting profit nor taxable profit;

• temporary differences in respect of investments in sub-sidiaries, associates and jointly controlled entities, if the Group is able to control the timing of the reversal of the temporary differences, and it is probable that they will not be reversed in the foreseeable future, and

• taxable temporary differences on the initial recognition of goodwill.

A deferred tax asset is recognized for unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available for which they can be used. Deferred tax assets are reviewed at each reporting date and reduced to the extent to which it is no longer probable that the related tax benefit can be realized.

Deferred taxes are measured on the basis of the tax rates that are expected to be applied to temporary differences when they reverse, using the tax rates that have been en-acted or substantively enacted at the reporting date.

The measurement of deferred taxes reflects the tax con-sequences that result from the expectations of the Group with regard to the manner of realization of the carrying amounts of its assets and the fulfillment of its liabilities at the reporting date.

Deferred tax assets and deferred tax liabilities are offset if there is a legally enforceable right to offset the recognized amounts in respect of the same tax authority and the off-set of deferred tax assets and liabilities is permitted as part of a corporate tax group.

Non-current assets held for sale and discontinued operationsNon-current assets or disposal groups comprised of assets and liabilities are classified as held for sale or held for distribution if it is highly probable that they will be recovered primarily through sale or distribution rather than through continued use.

In general, these assets and the disposal group are rec-ognized at the lower of their carrying amount and fair val-ue less costs to sell. Any impairment loss on a disposal group is first allocated to goodwill and then to the remain-ing assets and liabilities on a pro rata basis. The following are excluded: inventories, financial assets, deferred tax assets, and assets in connection with employee benefits that continue to be measured in accordance with the oth-er accounting policies of the Group. Impairment losses on initial classification as held for sale or distribution and sub-sequent gains and losses on revaluation are recognized in the income statement. Intangible and tangible assets are no longer amortized or depreciated.

An operation is classified as a discontinued operation upon disposal or as soon as the operation satisfies the criteria for classification as held for sale if this occurs earlier. The Group’s statement of comprehensive income is then presented as if the operation had been discontinued as of the beginning of the comparison period.


Item Measurement method

AssetsGoodwill ...................................................................................................................................................................................................................................................................................................................................Historical cost (subsequent measurement: impairment test)Other intangible assets Purchased ...............................................................................................................................................................................................................................................................................(Amortized) cost Internally generated ...........................................................................................................................................................................................................................Cost of development (direct costs and attributable overheads)Tangible assets..........................................................................................................................................................................................................................................................................(Amortized) costOther non-current assets and financial assets Loans and receivables..............................................................................................................................................................................................................(Amortized) cost Available for sale ...........................................................................................................................................................................................................................................At fair value through OCI or (amortized) cost Held for trading ..................................................................................................................................................................................................................................................At fair value through profit or lossInventories ...................................................................................................................................................................................................................................................................................................Lower of cost and net realizable valueTrade receivables ..............................................................................................................................................................................................................................................................(Amortized) costOther receivables Loans and receivables..............................................................................................................................................................................................................(Amortized) cost Held for trading ..................................................................................................................................................................................................................................................At fair value through profit or lossCash and cash equivalents ..........................................................................................................................................................................................................(Amortized) cost Liabilities Provisions Provisions for pensions, severance ..........................................................................................................................................Projected unit credit method payments, anniversary benefits Other provisions ...............................................................................................................................................................................................................................................Discounted settlement amount Interest-bearing liabilities ...................................................................................................................................................................................................................(Amortized) cost Other financial and other liabilities ..................................................................................................................................................................Settlement amount or fair value Trade payables ............................................................................................................................................................................................................................................................................(Amortized) cost

Summary of selected measurement methods


Standard Title Effective date Application at Endorsed by Interpretation pursuant to IFRS1 Constantia Flexibles2 the EU3

IFRS 16 ...............................................................................Leases ....................................................................................................................................................................................................1/1/2019 ..................................................................1/1/2019 ...........................................................................................................Yes IFRS 15 ...............................................................................Revenue from ..........................................................................................................................................................1/1/2018 ..................................................................1/1/2018 ...........................................................................................................Yes Contracts with Customers (Clarifications)

IFRS 15 ...............................................................................Revenue from..............................................................................................................................................................1/1/2018 ..................................................................1/1/2018 ...........................................................................................................Yes Contracts with Customers

IFRS 2 .......................................................................................Classification and Measurement .....................................................1/1/2018 ..................................................................1/1/2018 ..............................................................................................................No of Share-based Transactions (Amendment)

IFRS 4 .......................................................................................Insurance Contracts............................................................................................................................1/1/2018 ..................................................................1/1/2018 ...........................................................................................................Yes (Amendment)

Various......................................................................................Improvements .......................................................................................................................................................1/1/2017/ ............................................................1/1/2017/ ..............................................................................................................No to IFRSs 2014–2016 1/1/2018 1/1/2018

IFRIC..............................................................................................Foreign Currency Transactions ..................................................................1/1/2018 ..................................................................1/1/2018 ..............................................................................................................NoInterpretation and Advance Consideration22

1 Without early application2 Requirement: endorsed by the EU3 As of December 31, 2017

F. Application of New and Revised InternationalFinancial Reporting Standards

Accounting pronouncements that were applied for the first time in fiscal year 2017The following accounting standards and interpretations that were revised, supplemented, or newly issued by the IASB were applied for the first time in the accompanying consolidated financial statements:

• Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealized Losses (Amendment)

• Amendments to IAS 7: Cash Flow Statement – Disclosure Initiative (Amendment)

The new, revised, or adapted accounting standards and interpretations that were effective in fiscal year 2017 have no material impact on the net assets, financial position, and results of operations presented in these consolidated financial statements.

Accounting standards issued but not yet applied in fiscal year 2017The IASB has recently adopted or revised a number of other accounting standards and interpretations that were not implemented by the Constantia Flexibles Group in fiscal year 2017, as their application was either not yet mandatory, or they had not yet been endorsed by the European Commission.


Standard Title Effective date Application at Endorsed by Interpretation pursuant to IFRS1 Constantia Flexibles2 the EU3

IAS 40 ........................................................................................Investment Property ............................................................................................................................1/1/2018 ..................................................................1/1/2018 ..............................................................................................................No (Amendment)

IFRS 9 .......................................................................................Financial Instruments .....................................................................................................................1/1/2018 ..................................................................1/1/2018 ...........................................................................................................Yes

Various......................................................................................Improvements .............................................................................................................................................................1/1/2019 ..................................................................1/1/2019 ..............................................................................................................No to IFRSs 2015–2017

IFRS 17 ...............................................................................Insurance Contracts............................................................................................................................1/1/2021 ..................................................................1/1/2021 ..............................................................................................................No

IFRIC 23 ..........................................................................Uncertainty over .................................................................................................................................................1/1/2019 ..................................................................1/1/2019 ..............................................................................................................No Income Tax Treatments

IFRS 9 .......................................................................................Prepayment Features with ..........................................................................................1/1/2019 ..................................................................1/1/2019 ..............................................................................................................No Negative Compensation (Amendments to IFRS 9)

IAS 28 ........................................................................................Long-term Interests in .............................................................................................................1/1/2019 ..................................................................1/1/2019 ..............................................................................................................No Associates and Joint Ventures (Amendments to IAS 28)

1 Without early application2 Requirement: endorsed by the EU3 As of December 31, 2017

IFRS 9 (Financial Instruments)IFRS 9, issued in July 2014, contains revised guidance for the classification and measurement of financial instru-ments, including a new expected credit loss model to cal-culate the impairment of financial assets as well as new general accounting requirements for hedging transactions. It replaces the existing guidance under IAS 39 (Financial Instruments: Recognition and Measurement).

According to IFRS 9, all financial assets are divided into three classification categories – instruments measured at amortized cost, at fair value through profit or loss (FVTPL), and at fair value through other comprehensive income (FVOCI) – depending on the contractual cash flow characteristics (SPPI) and the business model.

Substantial portions of financial assets in the Group are classified as “loans and receivables” measured at amor-tized cost and as “available for sale” measured at the fair value. During the analysis of the existing financial assets, it was determined that trade receivables must be divided into two separate portfolios for classification pursuant to IFRS 9. The majority of trade receivables are assigned to the “at amortized cost” category. Due to existing factoring agreements, the second part of the trade receivables is classified as FVTPL.

As of the reporting date, the Group held significant equi-ty instruments classified as “available for sale” pursuant to IAS 39. The majority of these portfolios are assigned to the FVOCI category under IFRS 9. Changes from fair


value measurement are recognized in other comprehen-sive income; dividend income is presented in the income statement.

The Group assumes insignificant impacts with respect to financial liabilities because only an insignificant portion is designated as at FVTPL. A review of the existing finan-cial liabilities showed that there had been no modification within the meaning of IFRS 9. Based on this assessment, there is no adjustment from the changeover to IFRS 9. Additionally, the derecognition principles in IAS 39 are retained in IFRS 9, with the result that no effects are ex-pected here either.

IFRS 9 requires the Group to ensure that hedge ac-counting complies with the objectives and strategies of the Group’s risk management, and that hedge effective-ness is assessed to a greater extent based on a qualita-tive and forward-looking approach. Under the new model, it is probable that more risk management strategies will meet the criteria for hedge accounting, in particular those that contain a risk hedging component (except for for-eign currency risk) of a non-financial item. Under IFRS 9, derivatives that are embedded in host contracts in which the underlying is a financial asset within the scope of the standard are never accounted for separately. Instead, the hybrid financial instrument is assessed in its entirety with regard to its classification.

Hedging transactions are entered into in the Group in order to hedge against risks such as volatile aluminum prices, interest rates, and exchange rates. The Group will perform a more comprehensive analysis, but it can be as-sumed that the existing hedging relationships will also meet the IFRS 9 hedge accounting requirements. As a re-sult, the Group does not expect any material effects on its hedge accounting.

IFRS 9 replaces the old incurred loss model according to IAS 39 with an expected credit loss model based on a three-tiered classification system (“buckets”) that affects the underlying measurement horizon and interest recog-nition. This model must be applied to financial assets that are measured at amortized cost or at FVOCI – with the ex-ception of dividend-bearing instruments – and to contrac-tual assets under IFRS 15.

The Group has historically shown a high collectability of trade receivables. In accordance with the requirements of IFRS 9, the Group uses the simplified approach for de-termining expected credit losses. The Group will calculate expected credit losses using an impairment matrix. Based on the current analysis, the initial application of IFRS 9 will not have any material effects on the measurement of trade receivables.

The new standard entails comprehensive new notes dis-closures and changes in presentation, which will be im-plemented in the reporting period in which the standard is applied for the first time.

The Group will not apply IFRS 9 prior to the effective date, and hence will apply it for the first time as of the begin-ning of fiscal year 2018.

IFRS 15 (Revenue from Contracts with Customers)The objective of IFRS 15 is to establish principles to be followed by an entity in reporting useful information to users about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer.

The new standard uses a five-step model to identify the revenue to be recognized. These five steps comprise (1.) identifying contracts, (2.) identifying separate performance obligations, (3.) determining the transaction price, (4.) allo-cating the transaction price, and (5.) determining the date or period of revenue recognition. IFRS 15 also governs the accounting for the incremental costs to obtain a con-tract, which must be recognized as an asset and amortized over the term if they are incurred solely because of the contract, and it can be presumed that they can be recov-ered. Costs to fulfil a contract can also be recognized as an asset under IFRS 15 if certain criteria are met, to the extent that they are not already within the scope of anoth-er IFRS.


A comprehensive project during the course of the fiscal year identified the following qualitative and quantitative impacts:

The examination with respect to the necessity to combine separate contracts from Group companies into one con-tract within the meaning of IFRS 15 showed that such a compilation is not necessary.

IFRS 15 prescribes certain indicators that must be consid-ered when determining separate performance obligations. The separate treatment of performance obligations can result in timing differences in the revenue recognition for the particular performance obligations. The delivery terms (INCOTERMS) were analyzed in detail in this respect. This analysis showed that the Group has certain INCOTERMS in use such that transport services must be presented as separate performance obligations. These transport ser-vices amounted to €7,708 thousand for the fiscal year. In the future, the Group will present two performance obli-gations:

• deliveries of packaging material• transport services

Sales from the delivery of packaging material will be rec-ognized at specific points in time, whereas sales of trans-port services must generally be recognized over a period of time. Due to short delivery times (max. 2–4 weeks, usu-ally shorter), no material effects are expected from rev-enue recognition over a period of time. Accordingly, the Group has decided to retain revenue recognition at specif-ic points in time when the effect is immaterial. As of the reporting date, a maximum of €643 thousand of sales of transport services are not yet recognized, which is con-sidered insignificant compared to total sales. Other than transport services, no additional services were identified that would have to be presented as separate performance obligations.

There are two types of bonus and discount agreements in the Group that must be treated differently: Customers are granted both retrospective as well as prospective dis-counts upon satisfaction of certain conditions. Under IFRS 15, retrospective bonus and discount agreements are vari-able components of the transaction price that must be es-timated in advance. The previous estimate of this variable component also satisfies the requirements of IFRS 15 so that there will be no value-based adjustments to revenue recognition. In the future, the forecast bonuses and dis-counts will be presented as a refund liability, whereas they were previously recognized under trade receivables. This results in a pure presentation effect of €8,258 thousand as of December 31, 2017.

For prospective bonus agreements as well, only presen-tation effects are expected, whereby these were also pre-sented under trade receivables and will be presented in future as contract liabilities. For 2017, these amounted to €998 thousand.

In the future, refunds due to product returns will also be presented under refund liabilities, whereas they were previously presented under other current provisions. Here, too, only a presentation effect of €990 thousand is anticipated.

The revisions described due to the implementation of IFRS 15 are considered to be insignificant, both individ-ually and in the aggregate, and are not expected to have any material effects on the Group’s net assets, financial position, or results of operations.

The Group has not exercised the option to apply IFRS 15 before the effective date at the beginning of fiscal year 2018. The Group will apply the new revenue recognition standard for the first time using the modified retrospective method.


IFRS 16 (Leases)IAS 17 will be superseded when IFRS 16 takes effect. The new standard abolishes the recognition of operating leases, with certain exceptions. From January 1, 2019, when entering into a lease, the lessee must recognize a right-of-use asset and a lease liability. The Group does not intend to apply the standard early.

The standard primarily affects the presentation of operating leases. Future minimum lease payments under operating leases amounted to €29,222 thousand (2016: €50,032 thousand) at the reporting date. Further details on leases are contained in Section H. Notes to the Consolidated Balance Sheet, Note 1, Consolidated Asset Table.

The impact on assets, financial liabilities, and profit or loss is currently being examined. However, the project is still in its initial stage so that more extensive statements cannot yet be made.

The Constantia Flexibles Group does not expect any material effects on the net assets, financial position, and results of operations from the future initial appli-cation of the other standards and interpretations.

The effects of amended standards and interpretations on the presentation of the Group’s consolidated financial statements and the disclosures in the consolidated finan-cial statements are continually monitored and analyzed.

G. Management Judgment andUse of Estimates

Preparation of the consolidated financial statements re-quires certain estimates and assumptions to be made that affect the reported amount of assets (including goodwill), provisions, and liabilities, the disclosure of other obliga-tions at the reporting date, and the presentation of income and expenses during the reporting period. Actual future results may differ from those estimates, which can lead to significant differences in the consolidated financial state-ments.

The Management of Constantia Flexibles Holding GmbH is confident that the assumptions it has made are reason-able, such that the consolidated financial statements give a true and fair view of the net assets, financial position, and results of operations in all material respects.

The estimates and underlying assumptions are subject to considerable uncertainty and their validity is therefore constantly reviewed. Changes to the estimates are recog-nized in the period in which they are made. The principle assumptions relating to the estimates are described in the disclosures on the corresponding items.

For the measurement of existing provisions for pensions and similar obligations, severance payment obligations, and anniversary benefits, assumptions were made with re-spect to the discount rate, retirement age, life expectancy, and future salary and pension increases. Any changes in these assumptions will affect the carrying amount of pen-sion obligations. Sensitivity calculations in connection with provisions for employees are shown in Section H. Notes to the Consolidated Financial Statements, Note 8. Provisions.

The Management of Constantia Flexibles Holding GmbH is required to make judgments relating to the calculation of deferred taxes. Deferred tax assets are recognized to the extent to which a future use is probable. The amount of provisions is based on estimates of whether and to


what extent expected income taxes will be due. When cal-culating taxes, local tax regulations and budgeted financial ratios must be considered. Deviations in these assump-tions have an effect on the carrying amount of deferred taxes. Changes are recognized in other comprehensive income or in profit or loss, corresponding to the initial recognition.

Business combinations require assumptions and esti-mates that entail risks. Related to this, significant adjust-ments (earn-out arrangements) may happen in future peri-ods. The initial recognition of identified customer lists uses the multi-period excess earnings method, which considers planning data, company-specific WACC rates, and histori-cally documented loss rates. Production machines are rec-ognized on the basis of replacement cost and depreciat-ed over the remaining economic useful life. Real estate is valued by experts who usually apply the replacement cost approach. The initial recognition of items in connection with acquisitions is disclosed in Section D. Acquisitions and Other Changes in the Scope of Consolidation.

Goodwill generated in the context of business combina-tions is tested for impairment regularly, and at least annu-ally. When testing for impairment, the sum of the carrying amount is compared with the recoverable amount of a cash-generating unit. The recoverable amount is deter-mined by calculating the value in use. The calculation is based on company-specific growth rates, discount rates, and WACC rates. Changes to these inputs have a signif-icant impact on the calculated value in use. The related sensitivities are presented in Section H. Notes to the Con-solidated Balance Sheet, Note 1, Consolidated Asset Table.

Contingent liabilities, which are not recognized in the con-solidated balance sheet, are assessed regularly with re-gard to their likelihood of occurrence. If an outflow of re-sources embodying economic benefits is neither probable, such that a provision would have to be recognized, nor re-mote, the relevant obligations are disclosed as contingent liabilities. If estimates cannot be made by the relevant de-partments or on the basis of market data, external expert opinions are used.


H. Notes to the Consolidated Balance Sheet

1. Consolidated asset table

Change in acquisition cost

As of Currency Additions Disposals Change in Change in Transfers As of(in € thousand) 1/1/2017 translation the scope of the scope of 12/31/2017 difference consolidation consolidation Disposal Goodwill .............................................................................................770,417 .................................(3,231) .............................................................0 ...........................................................0 ..........................14,323 ..........(321,137) ...........................................................0...................460,371 Customer lists ...........................................894,054 .................................(4,914) ............................................................0 ...........................................................0 .................................8,543 .........(305,951) ...........................................................0..................591,732 Technology.....................................................................18,400 ...................................................................0 ............................................................0 ...........................................................0 ...........................................................0 .................(18,400) ...........................................................0............................................................0 Software.................................................................................13,801 ...........................................(146) ..................................3,859 ...................................(481) ...........................................139 .........................(2,623) ...........................................265..........................14,814 Own work capitalized .................................................................................8,801 ...........................................(113) ..................................4,757 ...........................................................0 ...........................................................0 .........................(2,341) .................................1,407..........................12,511 Other intangible assets .......................................................................................................7,098 ...........................................(538) ....................................................79 ...................................................(2) ...........................................................0 .........................(2,188) ...........................................................0..................................4,449 Construction in progress .............................................................................1,057 ...................................................................0 ..................................3,081 ...........................................(50) ...........................................................0 ...................................................(6) .........................(1,672)..................................2,410Intangible assets ..........................................943,211 .................................(5,711) ...........................11,777 ....................................(533) ..................................8,681 ..........(331,510) ...........................................................0...................625,915 Land value ......................................................................40,532 ...........................................(702) ..................................1,369 ...........................................(40) ...........................................975 .........................(8,417) ...........................................(44)..........................33,673 Building value .............................................248,636 .................................(4,560) ..................................3,049 .........................(2,117) .................................2,800 .................(52,468) .................................5,078..................200,417 Undeveloped land.......................................4,168 ...........................................(221) ............................................................0 ...........................................................0 ...........................................208 ...................................(638) ...................................................44..................................3,560 Technical plant and machinery ..........................................569,435 .........................(16,503) ...........................41,773 .........................(9,801) .................................4,860 .........(169,147) .........................36,319..................456,936 Other equipment, fixtures and furnitures ..............................................................................52,137 .................................(1,344) ..................................6,099 .........................(1,280) ...................................................38 .................(20,549) .................................3,295..........................38,397 Construction in progress .....................................................................32,836 ...........................................(963) ...........................36,196 ...................................(178) ...........................................................8 .........................(8,802) .................(44,692)..........................14,404Tangible assets ...................................................947,743 .........................(24,294) ...........................88,486 ..................(13,416) ..................................8,889 ..........(260,021) ...........................................................0...................747,387


As of Currency Additions Disposals Change in Change in Transfers As of(in € thousand) 1/1/2016 translation the scope of the scope of 12/31/2016 difference consolidation consolidation Disposal Goodwill .............................................................................................713,082 ..........................................4,609 .............................................................0 ...........................................................0 ..........................56,860 .....................(4,135) ...........................................................0...................770,417 Customer lists ...........................................868,700 .........................................2,050 ............................................................0 ...........................................................0 .........................44,408 ..........(21,104) ...........................................................0..................894,054 Technology.....................................................................18,400 ...................................................................0 ............................................................0 ...........................................................0 ...........................................................0 ........................................................0 ...........................................................0..........................18,400 Software.........................................................................................9,483 ...................................................(10) ..................................2,587 .........................(1,359) ...................................................54 ........................................................0 .................................3,046 ......................13,801 Own work capitalized .................................................................................4,906 ........................................................47 ..............................3,781 ...........................................................0 ...........................................................0 ...........................................................0 ...................................................67 ..............................8,801 Other intangible assets .......................................................................................................3,123 ...................................................241 .........................................508 ...................................................(3) .................................4,637 ...........................................(45) .........................(1,363)..................................7,098 Construction in progress .............................................................................1,142 ...................................................................0 ..................................1,670 ...................................................(5) ...........................................................0 ...........................................................0 .........................(1,750)..................................1,057 Intangible assets ..........................................905,754 ..........................................2,328 ...............................8,546 .........................(1,367) ..........................49,099 .............(21,150) ...........................................................0 ...............943,211 Land value ......................................................................41,973 ...........................................(393) .............................................174 ................................................(1) ...........................................264 ................................(951) ...................................(535)..........................40,532 Building value .............................................236,356 .........................................1,482 ..............................3,989 ......................(1,200) .................................6,489 ......................(1,662) .................................3,182 ..............248,636 Undeveloped land.......................................3,461 ...........................................................61 ........................................................0 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................645 ..............................4,168 Technical plant and machinery ..........................................486,325 .........................................7,269 ...........................43,597 .........................(8,156) .........................33,409 ..............(10,454) .........................17,446 ..............569,435 Other equipment, fixtures and furnitures......................................................41,635 ...................................................467 ..................................7,181 .........................(1,748) .................................1,462 ...................................(384) .................................3,525..........................52,137 Construction in progress .....................................................................16,483 ...................................................773 ...........................43,247 ...........................................................0 ...................................................26 .........................(3,432) .................(24,263)..........................32,836 Tangible assets ...................................................826,234 ..........................................9,660 .......................98,189 ..............(11,105) ..........................41,649 .................(16,884) ...........................................................0...................947,743


As of Currency Additions Disposals Change in Change in Transfers As of(in € thousand) 1/1/2017 translation the scope of the scope of 12/31/2017 difference consolidation consolidation Disposal Goodwill .....................................................................................................................................0 ...................................................................0 .............................................................0 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................................0............................................................0 Customer lists ...........................................100,431 ...........................................(340) ...........................49,758 ...........................................................0 ...........................................................0 .................(45,548) ...........................................................0..................104,301 Technology.............................................................................6,440 ...................................................................0 ..................................1,840 ...........................................................0 ...........................................................0 .........................(8,280) ...........................................................0............................................................0 Software.........................................................................................5,672 ...................................................(99) ..................................3,625 ...................................(390) ...........................................................0 .........................(1,320) ...........................................................0..................................7,488 Own work capitalized .................................................................................2,478 ...................................................(12) ..................................3,102 ...........................................................0 ...........................................................0 ...................................(387) ...........................................................0..................................5,180 Other intangible assets .......................................................................................................1,190 ...................................................(51) .............................................456 ...................................................(2) ...........................................................0 .........................(1,271) ...........................................................0............................................323 Construction in progress .......................................................................................................1 ...................................................................0 ............................................................0 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................................0............................................................1Intangible assets ..........................................116,212 ...........................................(502) ...........................58,782 ....................................(392) ...........................................................0 .................(56,807) ...........................................................0...................117,294 Land value ................................................................................................19 ..........................................................(1) .............................................138 ...........................................(27) ...........................................................0 ...........................................................0 ...........................................................0............................................128 Building value .....................................................23,795 ...........................................(578) ...........................12,284 .........................(2,005) ...........................................................0 .........................(6,126) ...........................................145..........................27,514 Undeveloped land.................................................................0 ...................................................................0 .............................................275 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................................0............................................275 Technical plant and machinery ..........................................121,488 .................................(3,295) ...........................66,725 .........................(9,196) ...........................................................0 .................(47,573) ...................................(647)..................127,503 Other equipment, fixtures and furnitures ..............................................................................16,752 ...........................................(583) ..................................9,148 ...................................(972) ...........................................................0 .........................(6,831) ...........................................502..........................18,016 Construction in progress .......................................................................................................0 ...................................................................0 ............................................................0 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................................0............................................................0Tangible assets ...................................................162,054 .................................(4,457) ...........................88,569 ..................(12,200) ...........................................................0 .................(60,530) ...........................................................0...................173,437

Accumulated depreciation and amortization


As of Currency Additions Disposals Change in Change in Transfers As of(in € thousand) 1/1/2016 translation the scope of the scope of 12/31/2016 difference consolidation consolidation Disposal Goodwill .....................................................................................................................................0 ...................................................................0 .............................................................0 ...........................................................0 ...........................................................0 .......................................................0 ...........................................................0............................................................0 Customer lists ...................................................43,435 ...........................................................82 ...........................59,535 ...........................................................0 ...........................................................0 ..................(2,620) ...........................................................0..................100,431 Technology.............................................................................2,760 ...................................................................0 ..................................3,680 ...........................................................0 ...........................................................0 ........................................................0 ...........................................................0..................................6,440 Software.........................................................................................2,096 ...........................................................31 ..................................3,568 ...................................(715) ...........................................................0 ........................................................0 ...........................................692..................................5,672 Own work capitalized ...........................................................................................720 ...........................................................17 ..................................1,728 ...........................................................0 ...........................................................0 ...........................................................0 ...................................................12..................................2,478 Other intangible assets .......................................................................................................1,045 ...........................................................13 .............................................871 ...................................................(1) ...........................................................0 ...........................................(45) ...................................(692)..................................1,190 Construction in progress .......................................................................................................0 ...................................................................0 ............................................................1 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................................0............................................................1 Intangible assets .................................................50,057 ....................................................142 .......................69,383 ....................................(716) ...........................................................0 .........................(2,665) ....................................................12...................116,212 Land value ........................................................................................................6 ...................................................................1 ....................................................12 ........................................................0 ...........................................................0 ...........................................................0 ...........................................................0....................................................19 Building value .............................................................9,611 ...................................................175 .......................15,137 ...................................(905) ...........................................................0 ...................................(210) ...........................................(13)..........................23,795 Undeveloped land.................................................................0 ...................................................................0 ............................................................0 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................................0 ........................................................0 Technical plant and machinery ..................................................49,629 .........................................1,358 ...........................78,365 .........................(5,946) ...........................................................0 .........................(1,917) ...........................................................0..................121,488 Other equipment, fixtures and furnitures ......................................................................................7,151 ...................................................179 ...........................11,099 .........................(1,547) ...........................................................0 ...................................(132) ...........................................................1..........................16,752 Construction in progress ............................0 ...................................................................0 ............................................................0 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................................0............................................................0 Tangible assets ..........................................................66,396 ..........................................1,713 ....................104,614 .........................(8,398) ...........................................................0 .........................(2,258) ...........................................(12)...................162,054


(in € thousand) Historical Accumulated Carrying Carrying cost depreciation value value 12/31/2017 and 12/31/2017 12/31/2016 amortization 12/31/2017 Goodwill ...........................................................................................................................................................................................................................................................................................................................................................460,371 ....................................................................0 ...........................460,371 ...........................770,417 Customer lists ..........................................................................................................................................................................................................................................................................................................591,732 ..........................104,301 ..........................487,430 ..........................793,623 Technology......................................................................................................................................................................................................................................................................................................................................................................0 ....................................................................0 ...................................................................0 ..................................11,960 Software................................................................................................................................................................................................................................................................................................................................................14,814 ..........................................7,488 ..........................................7,326 ..........................................8,129 Own work capitalized ............................................................................................................................................................................................................................................................................12,511 ..........................................5,180 ..........................................7,331 ..........................................6,323 Other intangible assets .........................................................................................................................................................................................................................................................................4,449 ....................................................323 ..........................................4,126 ..........................................5,908 Construction in progress .................................................................................................................................................................................................................................................................2,410 ....................................................................1 ..........................................2,409 ..........................................1,056Intangible assets ........................................................................................................................................................................................................................................................................................................625,915 ............................117,294 ...........................508,622 ...........................826,999 Land value .....................................................................................................................................................................................................................................................................................................................................33,673 ....................................................128 ..................................33,545 ..................................40,513 Building value ............................................................................................................................................................................................................................................................................................................200,417 ..................................27,514 ..........................172,903 ..........................224,841 Undeveloped land......................................................................................................................................................................................................................................................................................................3,560 ....................................................275 ..........................................3,285 ..........................................4,168 Technical plant and machinery ...................................................................................................................................................................................................................456,936 ..........................127,503 ..........................329,432 ..........................447,947 Other equipment, fixtures and furnitures....................................................................................................................................................................38,397 ..................................18,016 ..................................20,381 ..................................35,384 Construction in progress .........................................................................................................................................................................................................................................................14,404 ....................................................................0 ..................................14,404 ..................................32,836Tangible assets .................................................................................................................................................................................................................................................................................................................747,387 ............................173,437 ...........................573,950 ...........................785,689

(in € thousand) 12/31/2017 12/31/2016

Building value .......................................................................................................................................................................................................................................................................................................................................................................................................................................................3,250 .....................................................................................23,423Technical plant and machinery ........................................................................................................................................................................................................................................................................................................................................................................828 .............................................................................................4,845Other equipment, fixtures and fittings ...............................................................................................................................................................................................................................................................................................................................................0 ...............................................................................................................18......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................4,078 ......................................................................................28,286

The following table shows the carrying amounts:

Finance leasesThe Group leases equipment under various finance lease agreements. Lease agreements do not contain restrictions on the Group’s activities concerning dividends, additional debt, or other lease agreements. Individual leases have re-newal and bargain purchase options. These leases mainly concern the Afripack Group’s production buildings as well

as production machinery at Constantia Oai Hung Manu-facturing Joint Stock Company.

The underlying interest rate for finance leases is deter-mined for the entire term when the lease is entered into.

The carrying amounts of assets recognized as finance leases are as follows:


(in € thousand) Minimum Present value Minimum Present value lease of minimum lease of minimum payment lease payment payment lease payment 2017 2017 2016 2016 Up to one year .............................................................................................................................................................................................................................................................................................................................................1,282 ....................................................662 ..........................................5,856 ..........................................3,445Over one and up to five years ............................................................................................................................................................................................................................................................5,117 ..........................................3,417 ..................................18,403 ..................................10,361Over five years.............................................................................................................................................................................................................................................................................................................................................1,965 ..........................................1,767 ..................................29,613 ..................................23,756................................................................................................................................................................................................................................................................................................................................................................................................................................8,364 ...........................................5,846 ...................................53,872 ...................................37,562Less future finance costs ......................................................................................................................................................................................................................................................................... (2,518) ......................................................................................................(16,310) ............................................................................

Present value of leasing obligations .....................................................................................................................................................................................................5,846 ................................................................................................................37,562 ............................................................................

(in € thousand) 2017 2016

Up to one year ...................................................................................................................................................................................................................................................................................................................................................................................................................................................8,880 .....................................................................................15,421Over one and up to five years ..........................................................................................................................................................................................................................................................................................................................................................17,036 .....................................................................................29,313Over five years...................................................................................................................................................................................................................................................................................................................................................................................................................................................3,307 .............................................................................................5,298...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29,222 ......................................................................................50,032

Outstanding minimum lease payments at the reporting date were as follows:

Operating leasesThe Group has entered into various operating lease agree-ments as the lessee for buildings, machinery, and office premises. Lease agreements do not contain restrictions on the Group’s activities concerning dividends, additional

The operating lease obligations relate primarily to rent for buildings and offices.

Commitments related to capital expenditureObligations in the amount of €13,210 thousand (2016: €9,955 thousand) related to contracts already awarded for commenced for planned investment projects (purchase commitments).

debt, or other lease agreements. Individual leases have renewal options.

The future minimum lease obligations under operating leases are as follows:

Restrictions on right of disposalOn December 31, 2017, tangible assets with a carrying amount of €6,713 thousand (2016: €10,489 thousand) were pledged to secure loans.


(in € thousand) 12/31/2017 12/31/2016

Balance at beginning of period ..........................................................................................................................................................................................................................................................................................................................................770,417 .........................................................................713,082 Foreign currency translation.................................................................................................................................................................................................................................................................................................................................................................(3,231) .............................................................................................4,609 Additions/disposals due to business combinations .....................................................................................................................................................................................................................(306,815) .....................................................................................52,725 Balance at end of period ................................................................................................................................................................................................................................................................................................................................................................460,371 ..........................................................................770,417

GoodwillGoodwill changed as follows:

The opening balance of goodwill was adjusted by €5,012 thousand in fiscal year 2016 due to the first consolidation in connection with the acquisition of the Wendel Group.

An annual goodwill impairment test is performed based on the provisions of IFRS 3 in conjunction with IAS 36. This is done at the level of the Constantia Flexibles Hold-ing GmbH (consolidated) cash-generating unit (CGU). When testing for impairment, the carrying amount of the cash-generating unit is compared with the recoverable amount. The recoverable amount is determined by calcu-lating the value in use.

The expected cash flows are based on both a qualified planning process that considers internal corporate ex-perience and on economic data collected outside of the Company. The detailed planning period covers 1 year. Planning assumptions for 2 more years are considered in the medium-term plan at a high level. Following the de-tailed planning period, a growth rate of 1.5% is generally assumed. The discount rate is derived as the weighted average cost of capital (WACC), using the capital asset

pricing model. The discount rates are determined assum-ing a base interest rate of 1.3% and a market risk premium of 6.75%. Country-specific risk premiums are applied on the basis of ratings for each country to both the cost of equity and the cost of debt. The pre-tax discount rate de-termined for the Constantia Flexibles Holding GmbH (consolidated) CGU is 10.11%.

The mandatory annual impairment test confirmed the recoverability of goodwill arising as of March 26, 2015, (date of first consolidation by Wendel Group) as of December 31, 2017.

As an essential part of the impairment test, three sensitivity analyses were performed. In the first sensitivity analysis, a growth rate reduced by 0.1 percentage points was as-sumed. In the second sensitivity analysis, the discount rate was increased by 0.1 percentage points. In the third sen-sitivity analysis, a discount of 0.1 percentage points on the EBIT assumed in the perpetual annuity was charged. No impairment resulted from these changes in the underlying assumptions.


Name Registered Direct Nature of relationship office ownership interest1

Dilpack Kenya Ltd. ...........................................................................................................Nairobi, Kenya .............................................50.0%...............................................Dilpack Kenya produces and supplies flexible packaging for the African market. Dilpack offers solutions for marketing African flower products on the European market. Mapflex International Ltd. ......................................................................Port Louis, ................................................................33.3%...............................................Mapflex produces and trades flexible Mauritius packaging for fresh vegetables.Mapflex SA Pty. Ltd.....................................................................................................Muizenberg, .......................................................35.0%...............................................Mapflex offers innovative packaging materials South Africa and methods for improving the standard packaging of wholesalers.

1 The ownership interest corresponds to the voting rights.

(in € thousand)

Carrying amount 1/1/2017 ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,232 Additions .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................0 Foreign currency translation .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(234) Proportional result ...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(225) Disposals ...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................0Carrying amount 12/31/2017 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................773

2. Investments in associatesThe scope of consolidation included the following associates as of the reporting date:

There is no quoted price for the shares because the com-panies are not listed on a stock exchange. There were no

contingent liabilities with respect to associates as of the end of the reporting period.


(in € thousand) 12/31/2017 12/31/2016

Securities ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................213,536 .............................................................................................3,711Non-current derivative financial instruments ..................................................................................................................................................................................................................................................................................1,956 .............................................................................................2,410Loans ...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................60,533 .....................................................................................13,352Investments ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................151 .............................................................................................6,924Non-current loan and lease receivables ....................................................................................................................................................................................................................................................................................................................................0 .............................................................................................1,077Prepayments on intangible and tangible assets.................................................................................................................................................................................................................................................................3,704 .............................................................................................7,752Miscellaneous other assets..............................................................................................................................................................................................................................................................................................................................................................................1,813 .............................................................................................8,661.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................281,693 ......................................................................................43,887

(in € thousand) 12/31/2017 12/31/2016

Raw materials and supplies .....................................................................................................................................................................................................................................................................................................................................................................72,639 .....................................................................................88,414Semi-finished products ............................................................................................................................................................................................................................................................................................................................................................................................66,929 .....................................................................................84,853Finished goods, merchandise ...........................................................................................................................................................................................................................................................................................................................................................75,833 .............................................................................102,579Net realizable value (reduced by allowances) .....................................................................................................................................................................................................................................215,401 ..............................................................................275,846

Allowance inventories ...................................................................................................................................................................................................................................................................................................................................................................................................(5,449) .....................................................................................(6,453)

The securities essentially contain shares in the CEE Stock Exchange Group (CEESEG) of €934 thousand (2016: €2,257 thousand), as well as the 16.6% share in Multi-Color Corporation in the amount of €211,148 thou-sand.

The non-current derivative financial instruments in the reporting period amount to €1,956 thousand (2016: €2,410 thousand) and relate to cash flow hedges of €23 thousand (2016: €673 thousand) and interest rate caps of €1,893 thousand (2016: €1,736 thousand).

The loans mainly refer to a bank deposit.

In the previous year, the unconsolidated equity investment in Constantia San Prospero S.r.l., Italy, (2016: €6,772 thou-sand) was presented under investments. Details regarding acquisitions are described under Section D. Acquisitions and Other Changes in the Scope of Consolidation.

The miscellaneous other assets essentially contain pension reinsurance assets of €1,089 thousand (2016: €1,096 thousand) that do not satisfy the criteria pursuant to IAS 19 for plan assets for offsetting against the pension provisions. Contingent consideration from the sale of Aluprint Plegadizos S de R.L. de C.V. (2016: €6,878 thou-sand) was reclassified to other receivables (see Section D).

3. Other non-current assets and financial assets

4. Inventories


(in € thousand) 12/31/2017 12/31/2016

Receivables not yet due ....................................................................................................................................................................................................................................................................................................................................................................127,862 ..............................................................................202,226Overdue receivablesDue less than 30 days ................................................................................................................................................................................................................................................................................................................................................................................................14,176 .....................................................................................23,662Due more than 30 days but less than 60 days ......................................................................................................................................................................................................................................................................4,257 .............................................................................................8,539Due more than 60 days but less than 90 days ......................................................................................................................................................................................................................................................................1,781 .............................................................................................3,048Due more than 90 days but less than 180 days ..............................................................................................................................................................................................................................................................2,590 .............................................................................................3,060Due more than 180 days ..........................................................................................................................................................................................................................................................................................................................................................................................4,091 .............................................................................................6,718Allowance for doubtful debt ..................................................................................................................................................................................................................................................................................................................................................................(2,536) .....................................................................................(4,890)Total .........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................152,220 ..............................................................................242,363

(in € thousand) 12/31/2017 12/31/2017 12/31/2016 12/31/2016 Non-impaired Impaired Non-impaired Impaired

Receivables not yet due .....................................................................................................................................................................................................................................127,834 .....................................................................28 ....................................202,198.....................................................................28Overdue receivablesDue less than 30 days ................................................................................................................................................................................................................................................................14,172 ............................................................................4 ..........................................23,602.....................................................................60Due more than 30 days but less than 60 days ......................................................................................................................................4,246 ....................................................................12 ..................................................8,373.............................................................166Due more than 60 days but less than 90 days ......................................................................................................................................1,780 ............................................................................1 ..................................................2,766.............................................................282Due more than 90 days but less than 180 days ..............................................................................................................................1,887 ............................................................703 ..................................................2,404.............................................................657Due more than 180 days ..........................................................................................................................................................................................................................................................2,301 ..................................................1,790 ..................................................3,020...................................................3,697Total ..........................................................................................................................................................................................................................................................................................................................................................152,220 ...................................................2,536 ....................................242,363....................................................4,890

5. Trade receivables

In fiscal year 2017, receivables were sold to a financial institution by certain German, Austrian, Spanish, French, Polish, and Russian companies of the Constantia Flexibles Group. The sale also transferred the default risk from the Constantia Flexibles Group to the financial institution. The balance of transferred receivables at the reporting date was €125,787 thousand (2016: €134,810 thousand). The transferred receivables were recognized in accor-dance with IAS 39. The Constantia Flexibles Group has no further involvement in the trade receivables transferred to the financial institution.

The assessment of credit quality is based on the internal rating guidelines of Constantia Flexibles Holding GmbH. Credit insurance was taken out with various insurance companies for a significant part of trade receivables. These insurance policies stipulate a deductible in the event of a claim. For such receivables, the deductible is the maximum value adjusted, depending on the assess-ment of local management.


(in € thousand) 12/31/2017 12/31/2016

Derivative financial instruments .......................................................................................................................................................................................................................................................................................................................................................7,564 .............................................................................................5,043Accruals .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................2,080 .............................................................................................3,957Other tax receivables .......................................................................................................................................................................................................................................................................................................................................................................................................15,097 .....................................................................................16,908Prepayments ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................856 .............................................................................................1,881Current loan receivables .......................................................................................................................................................................................................................................................................................................................................................................................................................0 .......................................................................................................167Miscellaneous receivables............................................................................................................................................................................................................................................................................................................................................................................28,940 .....................................................................................25,816...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................54,537 ......................................................................................53,772

6. Other receivables

Derivatives used to hedge commodity prices amount to €5,677 thousand (2016: €4,395 thousand). Derivatives used to hedge currencies amount to €1,887 thousand (2016: €648 thousand).

The other receivables essentially contain receivables due from CP Group Holding BV, Netherlands, of €2,827 thousand (2016: €10,109 thousand), a receivable to a sold Labels company from a profit transfer in the amount of €10,649 thousand, contingent consideration of €6,696 thousand from the sale of Aluprint Plegadizos S de R.L. de C.V. (in 2016, €6,878 thousand was presented in non-current assets), an investment of €2,000 thousand (2016: €2,000 thousand), receivables from an energy tax rebate of €723 thousand (2016: €893 thousand), and receivables from employees of €716 thousand (2016: €1,215 thousand).

In the previous year, other receivables included financial receivables of €1,528 thousand due from unconsolidated Constantia San Prospero S.r.l., capitalized surrender val-ues of the pension liability insurance of €2,812 thousand, as well as receivables due from insurance companies of €2,490 thousand in the Afripack Group.

7. EquityChanges in equity are presented in a separate statement (Consolidated Statement of Changes in Equity).

Share capitalConstantia Flexibles Holding GmbH has share capital amounting to €35 thousand.

Capital reserveIn fiscal year 2017, the shareholders made a capital contribution of €1,503 thousand.

In fiscal year 2016, non-restricted capital reserves in the amount of €927,450 thousand were released to retained earnings.

Hedging reserveThe hedging reserve comprises the effective portion of the cumulative net changes in the fair value of hedging in-struments used to hedge cash flows until the subsequent realization of the hedged cash flows in profit or loss.

Currency translation reservesThe currency translation reserve of (€9,400) thousand (2016: (€2,309) thousand) comprises exchange rate differences (translation effect) from the translation of financial statements of foreign operations amounting to (€10,805) thousand (2016: (€3,875) thousand) and translation differences relating to monetary items that are part of a net investment in a foreign operation amounting to €1,405 thousand (2016: €1,566 thousand).

Retained earningsRetained earnings include the accumulated results within the Group.

The recognition of share-based payments resulted in an increase in retained earnings of €3,855 thousand (2016: €0 thousand).


NON-CONTROLLING INTERESTS % % Result Result Balance Balance in thousand € in thousand € in thousand € in thousand € 2017 2016 2017 2016 2017 2016

Verstraete in mould labels N.V. (Belgium) ...................................................0.0..................................................49.0 ..........................................9,496 ......................................9,420 ................................................................0 .......................................4,556 Parikh Packaging Pvt. Ltd. (India) ......................................................................................25.0.................25.0–40.0 ............................................(211) ....................................................265 ................................................................5 .................................................431 Spearsystem Packaging (Africa)Pvt. Ltd. (South Africa) .........................................................................................................................................................0.0..................................................25.1 ...................................................(94) ..................................(1,372) ...................................................................0 ...............................(7,132) Afripack Group (South Africa) ..............................................................................5,0–49,0.........................5.0–49.0 ....................................................222 ........................................................16 .................................................173 .................................................451 Constantia Oai Hung Manufacturing Joint Stock Company (Vietnam) ................................................................................................................................................................49.0..................................................49.0 ..........................................2,432 ......................................1,390 .......................................2,258 .......................................1,920 Constantia CM Labels SDN BHD (Malaysia) ..............................0.0..........................................................0.0 ....................................................................0 ................................................146 ...................................................................0 ....................................................................0 Constantia Aloform GmbH (Germany)....................................................................0.0..........................................................0.0 ....................................................................0 ................................................(15) ...................................................................0 ....................................................................0 Other .................................................................................................................................................................................................................................................................................................................................................................................................................(1) ............................................................(1) ...................................................................0 .................................................................1.........................................................................................................................................................................................................................................................................................................................................................................................................................11,844 .......................................9,850 .......................................2,436 .................................................227

In May 2017, an additional 24.5% of the shares in Bag and Pouch Converters Pty. Ltd., South Africa, was acquired for €328 thousand. The €111 thousand difference be-tween the purchase price and the carrying amount of the non-controlling interest as of the acquisition date was rec-ognized as a decrease in Group equity.

In fiscal year 2016, during the course of the acquisition of the shares in the Afripack Group and Oai Hung Manufacturing Joint Stock Company, the non-controlling interest shareholders were granted the right to sell the remaining shares to the Constantia Flexibles Group. The present values of the call/put options were determined at the date of first consolidation (Afripack: €12,775 thou-sand, Oai Hung: €35,953 thousand) and reported in non-current liabilities in the consolidated balance sheet. The present values of the liabilities from the call/put op-tions were deducted from the non-controlling interests (Afripack: €2,692 thousand, Oai Hung: €14,186 thou-sand) – measured based on the proportionate share of net assets – and the remaining amounts were recognized as a reduction in equity (Afripack: €10,083 thousand, Oai Hung: €21,767 thousand).

The remaining non-controlling interest (30%) in Constantia Aloform GmbH, Germany, was acquired in April 2016 for €2,600 thousand. The €529 thousand difference be-tween the purchase price and the carrying amount of the non-controlling interest as of the acquisition date was rec-ognized as a decrease in Group equity.

The remaining non-controlling interest (30%) in Constan-tia CM Labels SDN BHD, Malaysia, was acquired in Sep-tember 2016 for €2,450 thousand. The €1,303 thousand difference between the purchase price and the carrying amount of the non-controlling interest as of the acquisition date was recognized as a decrease in Group equity.

A further 15% of the shares in Parikh Packaging Pvt. Ltd. was acquired in October 2016 for €4,734 thousand. The put option liability was revalued at the date of acquisition. This resulted in an expense of €4,734 thousand, which was recognized in other financial income and expense. The reclassification of the non-controlling interests ac-quired increased Group equity by €333 thousand.

The reclassification to Group equity of non-controlling in-terests that had become negative due to a dividend pay-ment of Verstraete in mould labels N.V. resulted in a de-crease in retained earnings of €1,099 thousand in fiscal year 2016.

Non-controlling interestsThe table below shows the summarized financial informa-tion before intercompany eliminations for those Group en-tities with significant non-controlling interests.


2017 Parikh Afripack Constantia(in € thousand) Packaging Group Oai Hung Pvt. Ltd. Manufacturing Joint Stock Company

Non-current assets .............................................................................................................................................................................................................................................................................................................................18,085 ............................................................26,615 ................................................................38,894 Current assets.......................................................................................................................................................................................................................................................................................................................................................13,791 ................................................................48,001 ................................................................10,147 Non-current liabilities .........................................................................................................................................................................................................................................................................................................................5,681 ............................................................17,134 ........................................................................6,092 Current liabilities ...........................................................................................................................................................................................................................................................................................................................................14,732 ............................................................54,460 ........................................................................9,390 Equity attributable to owners of the company .......................................................................................................................................................................................8,598 ..................................................................................158 ................................................................17,115 Non-controlling interests ......................................................................................................................................................................................................................................................................................................2,866 ........................................................................2,865 ................................................................16,444 Effect of initial recognition of put options liabilities .................................................................................................................................................(2,861) ................................................................(2,692) ........................................................(14,186)Non-controlling interests including put options ..............................................................................................................................................................................5 ...................................................................................173 .........................................................................2,258

Income ................................................................................................................................................................................................................................................................................................................................................................................................36,898 ....................................................111,022 ................................................................29,738 Expenses ..........................................................................................................................................................................................................................................................................................................................................................................(37,743) ................................................(109,213) ........................................................(24,774)Net income after tax ......................................................................................................................................................................................................................................................................................................................(845) ........................................................................1,809 .........................................................................4,964

Attributable to equity holders of the parent ......................................................................................................................................................................................................(634) ........................................................................1,587 ........................................................................2,532 Attributable to non-controlling interests ........................................................................................................................................................................................................................(211) ..................................................................................222 ........................................................................2,432 Net income after tax ......................................................................................................................................................................................................................................................................................................................(845) ........................................................................1,809 .........................................................................4,964

Other comprehensive income, attributable to shareholders ...............................................................................................................(644) ..........................................................................(262) ................................................................(2,179)Other comprehensive income, non-controlling interests .................................................................................................................................(215) ..........................................................................(500) ................................................................(2,093)Other comprehensive income .............................................................................................................................................................................................................................................................(858) ..........................................................................(762) ................................................................(4,272) Total comprehensive income, attributable to shareholders ..........................................................................................................(1,278) ........................................................................1,325 ..................................................................................353 Total comprehensive income, non-controlling interests.......................................................................................................................................(426) ..........................................................................(278) ..................................................................................339 Total comprehensive income.........................................................................................................................................................................................................................................................(1,703) ........................................................................1,047 ...................................................................................692

Dividend payments to non-controlling interests .......................................................................................................................................................................................................0 ..............................................................................................0 ..................................................................................................0

Cash flow from operating activities ...............................................................................................................................................................................................................................................2,628 ............................................................(2,647) ........................................................................5,950 Cash flow from investing activities ..........................................................................................................................................................................................................................................(2,775) ........................................................................6,674 ................................................................(1,300)Cash flow from financing activities ...................................................................................................................................................................................................................................................................93 ............................................................(3,350) ................................................................(4,290)Changes in cash and cash equivalents .............................................................................................................................................................................................................(54) ...................................................................................677 ...................................................................................361


2016 Verstraete in Parikh Spearsystem Afripack Constantia(in € thousand) mould labels N.V. Packaging Packaging Group Oai Hung Pvt. Ltd. (Africa) Manufacturing (Pty) Ltd. Joint Stock Company

Non-current assets ..............................................................................................................................................................................................51,265 .......................................19,067 ...............................................4,465 ..........................................36,441...........................................46,042 Current assets........................................................................................................................................................................................................................31,259 .......................................11,527 .......................................15,139 ..........................................49,323...................................................8,096 Non-current liabilities ..................................................................................................................................................................................15,329 ...............................................5,140 .........................................................................0 ..........................................25,214...................................................8,028 Current liabilities ............................................................................................................................................................................................................12,722 .......................................12,287 .......................................48,019 ..........................................59,185...........................................13,242 Equity attributable to owners of the company ................................................27,793 ...............................................9,875 ...............................(21,283) ..........................................(1,778)...........................................16,763 Non-controlling interests ...............................................................................................................................................................26,679 ...............................................3,292 .......................................(7,132) ..................................................3,143...........................................16,105 Effect of initial recognition of put options liabilities ................................................................................................................................................................(22,123) ..........................................(2,861) ............................................................................0 ..........................................(2,692)...................................(14,186)Non-controlling interests including put options .....................4,556 .........................................................431 ......................................(7,132) .............................................................451....................................................1,920

Income .........................................................................................................................................................................................................................................................120,763 .......................................33,751 ..........................................22,907 ..................................109,203...........................................15,043 Expenses ..................................................................................................................................................................................................................................(101,529) ..................................(33,468) ..................................(28,371) ..........................(110,669)...................................(12,206)Net income after tax .............................................................................................................................................................................19,234 .........................................................284 ......................................(5,465) ..........................................(1,466)....................................................2,837

Attributable to equity holders of the parent ....................................................................9,814 .................................................................19 .......................................(4,093) ..........................................(1,482)...................................................1,447 Attributable to non-controlling interests ......................................................................................9,420 .........................................................265 ..........................................(1,372) ....................................................................16...................................................1,390 Net income after tax .............................................................................................................................................................................19,234 .........................................................284 ......................................(5,465) ..........................................(1,466)....................................................2,837

Other comprehensive income, attributable to shareholders .................................................................................................................................................................(24) ............................................................(47) ..................................................3,081 ....................................................(655).............................................................551 Other comprehensive income, non-controlling interests ...................................................................................................................................................................................(23) ............................................................152 ...............................................1,033 ............................................................162.............................................................529 Other comprehensive income .....................................................................................................................................(47) .............................................................106 ...................................................4,114 ....................................................(493)....................................................1,080 Total comprehensive income, attributable to shareholders .......................................................................................................................................................9,790 .........................................................(28) ..........................................(1,012) ..........................................(2,137)...................................................1,998 Total comprehensive income, non-controlling interests .........................................................................................................................................................................9,397 .........................................................417 .................................................(339) ............................................................178...................................................1,920 Total comprehensive income..........................................................................................................................19,187 .........................................................389 ......................................(1,351) ..........................................(1,959)....................................................3,917

Dividend payments to non-controlling interests .............................................5,446 .........................................................................0 ............................................................................0 ............................................................................0.............................................................................0

Cash flow from operating activities ........................................................................................................27,623 .........................................................926 ..................................................2,463 ............................................................197...................................................4,675 Cash flow from investing activities ...................................................................................................(12,148) ..........................................(2,810) ....................................................(559) ..........................................(4,722).....................................................(306)Cash flow from financing activities .........................................................................................................(6,852) ..................................................1,916 ..........................................(1,339) ..................................................3,885...........................................(4,267)Changes in cash and cash equivalents .....................................................................8,623 .....................................................................33 .............................................................565 ....................................................(641)..............................................................102


(in € thousand) 12/31/2017 12/31/2017 12/31/2017 12/31/2016 12/31/2016 12/31/2016 Non-current Current Total Non-current Current Total

Severance payments ..........................................................................................................................................35,985..........................................1,257 ...................................37,242 ..............................36,191 ....................................................283 ...................................36,474 Pensions............................................................................................................................................................................................................17,174.....................................................641 ...................................17,815 ..............................18,420 ....................................................774 ...................................19,194 Anniversary bonuses ..................................................................................................................................................7,692.....................................................451 ..........................................8,143 ......................................7,493 ....................................................519 ...........................................8,012Other provisions......................................................................................................................................................................................757...................................52,739 ...................................53,496 ......................................1,116 ..................................56,726 ...................................57,842 ................................................................................................................................................................................................................................................................61,608 ...............................55,088 ...........................116,696 ...............................63,220 ...................................58,302 ...........................121,522

8. Provisions

In fiscal year 2016, the breakdown of maturities (non-cur-rent and current) was performed for IAS 19 provisions (severance payments, pensions, and anniversary bonuses).

Non-current provisions1. Provision for severance payments: The provision for severance payments mainly relates to provisions for termi-nation benefits in Austria (92%) and Turkey (5%).

Austria: Based on Austrian labor law obligations, em-ployees whose employment began before December 31, 2002, receive one-time severance compensation in the case of termination by their employer or when they reach pensionable age. The amount of this payment depends on the number of years of service and salary at the time of severance.

Among other things, the severance payment obligations in Austria are subject to final compensation and are there-fore mainly dependent on compensation changes and em-ployee turnover (with or without claim).

There is no direct claim for a statutory severance payment against the employer for any employment relationships in Austria that began after December 31, 2002. For these employment contracts, the employer pays 1.53% of the gross salary into an employee pension fund monthly, which is deposited in the employee’s account. In the case of this severance model, the employer is only obliged to make regular contributions, which are recognized in the income statement for the period.

Turkey: According to Turkish labor law, employees are en-titled to severance payment in the case of termination by the employer or upon retirement.



Present value of obligations as of January 1 ........................................................................................................................................................................................................................................................................36,474 .....................................................................................36,154Reclassification .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................0 ...............................................................................................(112)Change in the scope of consolidation................................................................................................................................................................................................................................................................................................................................680 .......................................................................................................................0...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................37,154 ......................................................................................36,042(Gain)/loss from currency translation differences ......................................................................................................................................................................................................................................................(281) ..............................................................................................................(5)Current service cost .....................................................................................................................................................................................................................................................................................................................................................................................................................1,038 .......................................................................................................966Interest expense...................................................................................................................................................................................................................................................................................................................................................................................................................................................660 .......................................................................................................724Use of provision for severance payments made ......................................................................................................................................................................................................................................................(1,502) .....................................................................................(2,428) Past service cost, (gains)/losses from compensation ...................................................................................................................................................................................................................................................13 ...............................................................................................................11Actuarial (gains)/losses (demographic assumption) .................................................................................................................................................................................................................................................(64) .......................................................................................................................0Actuarial (gains)/losses (financial assumption) .........................................................................................................................................................................................................................................................(2,681) .............................................................................................3,484Actuarial (gains)/losses (experience adjustments)................................................................................................................................................................................................................................................2,905 .....................................................................................(2,320)Present value of obligations as of December 31 ...........................................................................................................................................................................................................................37,242 ......................................................................................36,474

Number of employees (for severance obligation) ........................................................................................................................................................................................................................................................2,163 .............................................................................................2,623

2017 2016

Salary increase ..........................................................................................................................................................................................................................................................................................................................................................................................................3.00–6.50% ........................................................3.00–7.00%Discount rates ......................................................................................................................................................................................................................................................................................................................................................................................................1.30–10.40% ........................................................1.10–9.80%

In fiscal year 2018, the Constantia Flexibles Group ex-pects severance payments of €1,314 thousand (previous year: €946 thousand).The most important actuarial assumptions applied at the

Adjustments for salary increases and discount rates are effected by country.

Salary increase 2017:• 3.50% (Constantia Patz)• 3.00% (Austria, except Constantia Patz)• 5.50% (Mexico)• 6.50% (Turkey)

reporting date are as follows:

Discount rate 2017:• 1.70% (Austria)• 1.30% (Italy)• 7.25 % (Mexico)• 10.40 % (Turkey)

In terms of the biometric parameters, mortality probabil-ities in accordance with AVÖ 2008 by Pagler & Pagler “Salaried employees” (Austria) or EV K00 (Turkey) are used. Phased employee turnover probabilities (Austria, Turkey) that are dependent on the years of service were

The amount due under the Company’s commitment, as reported in the consolidated balance sheet, is as follows:


(in € thousand) Increase Decrease Discount rate Discount rate

Impact on actuarial (gains)/losses ........................................................................................................................................................................................................................................................................................... (885) .................................................................................................................................................891Impact on the defined benefit obligation .......................................................................................................................................................................................................................................................... (885) .................................................................................................................................................891

(in € thousand) Increase Decrease Salary increase Salary increase

Impact on actuarial (gains)/losses .......................................................................................................................................................................................................................................................................................................823 .........................................................................................................................................(825)Impact on the defined benefit obligation ......................................................................................................................................................................................................................................................................823 .........................................................................................................................................(825)

used. The weighted average remaining duration for termination benefits is 10.4 years.

Duration was determined using probabilities of exit (death, disability, turnover) weighted by the amount of cash flows.

Sensitivity analysis: Provided that the other assumptions are constant, the possible changes that can be reasonably anticipated in one of the significant actuarial assumptions at the reporting date would have affected the defined ben-efit obligation by the following amounts: change of +/– 0.25 percentage points in each case:

2. Provisions for pensions: Based on works agreements and contracts, there are commitments to pay pensions to (former) employees after their retirement. These defined benefit obligations are partially offset by qualifying insur-ance policies.

The pension obligations of the Austrian companies (Constantia Teich GmbH, Constantia Flexibles Group GmbH) are defined benefit plans. The pension payments of all beneficiaries are insured.

There is a general pension plan at Constantia Hueck Folien GmbH & Co. KG (Germany) (15 year waiting period, de-pending on years of service, independent of salary) for old age, disability, and widows’ pensions. There are also indi-vidual commitments with fixed monthly pension amounts for retirement, disability, and survivors’ pensions, and pen-sion plans for executives (old age and survivors’ pensions; generally defined contribution plans, but with annual calculation of the pension entitlement under the pension

liability insurance policy; capital preservation during the benefit phase).

Pension obligations were partially covered by pension liability insurance policies with insurance companies (risk transfer). The plan assets depend on the proceeds of the insurance but there is a minimum guaranteed interest rate (limited investment risk). The pension liability insurance policies have matching maturities.

The counterparty risk for the companies is estimated as low (at the Group level), with the risk being insignificant for the insurance companies in Austria and Germany.

Net interest expenses from the unwinding of the discount on non-current employee benefits and the return on plan assets are recognized in net financial income and expense.

The calculation of pension obligations is based on actuari-al reports for the December 31, 2017, reporting date.


2017 (in € thousand) Funded Unfunded Total

Present value of obligations as of January 1 ...........................................................................................................................................................................................6,641 ................................................................18,451 ................................................................25,092Change in the scope of consolidation ....................................................................................................................................................................................................................(2,791) ..........................................................................(635) ................................................................(3,426).................................................................................................................................................................................................................................................................................................................................................................................................................................................3,850 .................................................................17,816 .................................................................21,666(Gain)/loss on currency translation differences ......................................................................................................................................................................................................0 ..........................................................................................53 ..........................................................................................53Current service cost (employer and employees) ...................................................................................................................................................................................................0 ..................................................................................205 ..................................................................................205Interest expense......................................................................................................................................................................................................................................................................................................................................................................51 ..................................................................................309 ..................................................................................360Use of provision for pension payments made..........................................................................................................................................................................................(295) ..........................................................................(867) ................................................................(1,162) Past service cost, (gains)/losses from compensation payments .............................................................................................................0 ..........................................................................................15 ..........................................................................................15Actuarial (gains)/losses (demographic assumptions) .......................................................................................................................................................................0 ..........................................................................................25 ..........................................................................................25Actuarial (gains)/losses (financial assumptions) .........................................................................................................................................................................(310) ................................................................(1,798) ................................................................(2,108)Actuarial (gains)/losses (experience adjustments).....................................................................................................................................................................230 ........................................................................1,490 ........................................................................1,720Present value of obligations as of December 31 .............................................................................................................................................3,526 .................................................................17,248 .................................................................20,774 2017 (in € thousand) Funded Unfunded Total

Fair value of plan assets as of January 1 ...............................................................................................................................................................................................................5,898 ..................................................................................................0 ........................................................................5,898Change in the scope of consolidation........................................................................................................................................................................................................................(2,745) ..................................................................................................0 ................................................................(2,745).................................................................................................................................................................................................................................................................................................................................................................................................................................................3,153 ..................................................................................................0 .........................................................................3,153Gain/(loss) on currency translation differences ................................................................................................................................................................................................................................................................................................................0 ..................................................................................................0Expected return on plan assets .............................................................................................................................................................................................................................................................................199 ..................................................................................................0 ..................................................................................199Contributions to plan assets (employer) .......................................................................................................................................................................................................................................28 ..................................................................................................0 ..........................................................................................28Contributions to plan assets (employee) ......................................................................................................................................................................................................................................................................................................................................................0 ..................................................................................................0 Payments from the plan assets (other than compensation payments) .....................................................(441) ..................................................................................................0 ..........................................................................(441)Payments from the plan assets due to compensation payments .....................................................................................................................................................................................................................0 ..................................................................................................0Actuarial gains/(losses)..............................................................................................................................................................................................................................................................................................................................20 ..................................................................................................0 ..........................................................................................20Fair value of plan assets as of December 31 ...................................................................................................................................................................2,959 ..................................................................................................0 .........................................................................2,959 Net obligation of pension provisions 2017 (in € thousand) ............................................................................................................................................................................................................................................................................................17,815

The amount stated in the consolidated balance sheet is calculated as follows:

The Constantia Flexibles Group expects pension payments of €959 thousand in fiscal year 2018.



Present value of obligations as of January 1 ...........................................................................................................................................................................................6,498 ................................................................16,797 ................................................................23,295Change in the scope of consolidation .............................................................................................................................................................................................................................................................. ..........................................................................(235) ..........................................................................(235).................................................................................................................................................................................................................................................................................................................................................................................................................................................6,498 .................................................................16,562 .................................................................23,060(Gain)/loss on currency translation differences ......................................................................................................................................................................................................0 ..................................................................................189 ..................................................................................189Current service cost (employer and employees) ...................................................................................................................................................................................101 ..................................................................................176 ..................................................................................277Interest expense..............................................................................................................................................................................................................................................................................................................................................................138 ..................................................................................446 ..................................................................................584Use of provision for pension payments made..........................................................................................................................................................................................(434) ..........................................................................(526) ..........................................................................(960) Past service cost, (gains)/losses from compensation payments .....................................................................................(311) ..........................................................................(235) ..........................................................................(546)Actuarial (gains)/losses (financial assumptions) .................................................................................................................................................................................816 ........................................................................2,839 ........................................................................3,655Actuarial (gains)/losses (experience adjustments).............................................................................................................................................................(167) ................................................................(1,000) ................................................................(1,167)Present value of obligations as of December 31 .............................................................................................................................................6,641 .................................................................18,451 .................................................................25,092 2016 (in € thousand) Funded Unfunded Total

Fair value of plan assets as of January 1 ...............................................................................................................................................................................................................5,643 ..................................................................................................0 .........................................................................5,643Gain/(loss) on currency translation differences ......................................................................................................................................................................................109 ..................................................................................................0 ..................................................................................109Expected return on plan assets .............................................................................................................................................................................................................................................................................124 ..................................................................................................0 ..................................................................................124Contributions to plan assets (employer) .......................................................................................................................................................................................................................................93 ..................................................................................................0 ..........................................................................................93Contributions to plan assets (employee) ....................................................................................................................................................................................................................................15 ..................................................................................................0 ..........................................................................................15Payments from the plan assets (other than compensation payments) .....................................................(434) ..................................................................................................0 ..........................................................................(434)Actuarial gains/(losses)......................................................................................................................................................................................................................................................................................................................348 ..................................................................................................0 ..................................................................................348Fair value of plan assets as of December 31 ...................................................................................................................................................................5,898 ..................................................................................................0 .........................................................................5,898 Net obligation of the pension provision 2016 (in € thousand) ...........................................................................................................................................................................................................................................................................19,194


Austria, Germany, Poland 2017 2016

Salary increase .........................................................................................................................................................................................................................................................................................................................................................................................................1.00 – 5.50% ......................................................1.00 – 5.60%Pension increase ................................................................................................................................................................................................................................................................................................................................................................................................1.50 –2.50% .......................................................1.50– 4.60%Discount rates ..............................................................................................................................................................................................................................................................................................................................................................................................................1.90 –7.25% .......................................................0.90– 8.50%Expected return on plan assets ..................................................................................................................................................................................................................................................................................................................1.90 –7.25% .......................................................0.90– 8.50%

Accounting principles Heubeck Heubeck AVÖ 2008 P AVÖ 2008 P 2005 G 2005 G for employees for employees Male Female Male Female

Remaining life expectancy from among the current 65-years-old (in years) ..............................................................................................................................................................................................................19.3 ..........................................................23.4 ..........................................................21.0...........................................................24.6Remaining life expectancy at age 65 from among the current 45-year-old (in years) ..........................................................................................................................................................................21.9 ..........................................................25.9 ..........................................................23.5...........................................................26.7

Average number of employees (FTE) 2017 2016

For pension obligations ....................................................................................................................................................................................................................................................................................................................................................................................................1,626 .............................................................................................2,873


Expected contributions by the employer .....................................................................................................................................................................................................................................60 ..................................................................................................0 ..........................................................................................60

The plan assets consist of qualifying insurance policies.

The carrying amount of the provisions of pensions (= net obligation) is calculated as the difference between the present value of the pension obligations and the fair value of the plan assets as of December 31, 2017.

The provisions for pensions primarily relate to funded or unfunded provisions for pensions in Austria, Germany, and Mexico.

The key country-specific assumptions for the actuarial valuation were:

The assumptions regarding future mortality are based on the likelihood of death according to AVÖ 2008 by Pagler & Pagler “Salaried employees” (Austria) or Heubeck 2005 G (Germany). The following current life expectan-

cies are based on the values of the defined benefit ob-ligations (severance, anniversary bonus, pension) at the reporting date:


(in € thousand) Increase Decrease Discount rate Discount rate

Impact on actuarial (gains)/losses ...............................................................................................................................................................................................................................................................................................(687) .................................................................................................................................................731Impact on the defined benefit obligation ..............................................................................................................................................................................................................................................................(687) .................................................................................................................................................731

(in € thousand) Increase Decrease Salary increase Salary increase

Impact on actuarial (gains)/losses ...............................................................................................................................................................................................................................................................................................................70 .................................................................................................................................................(68)Impact on the defined benefit obligation ..............................................................................................................................................................................................................................................................................70 .................................................................................................................................................(68)

The weighted average remaining duration of the pensions is 14.8 years.

Duration was determined using probabilities of exit (death, disability, employee turnover) weighted by the amount of cash flows.

The impact of salary/benefit increases on pension obliga-tions is marginal, since there are no salary increases for pensioners and benefit increases are only relevant if there

Sensitivity analysis: Provided that the other assumptions are constant, the possible changes that can be reasonably anticipated in one of the significant actuarial assumptions at the reporting date would have affected the defined ben-efit obligation by the following amounts: change of +/– 0.25 percentage points in each case:

are value adjustments (such as commitments linked to a consumer price index).



Present value of obligations as of January 1 ................................................................................................................................................................................................................................................................................8,012 .............................................................................................7,508Change in the scope of consolidation...............................................................................................................................................................................................................................................................................................................................................0 .......................................................................................................................0......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8,012 ..............................................................................................7,508(Gain)/loss from currency translation differences ..............................................................................................................................................................................................................................................................................0 .......................................................................................................................0Current service cost ...............................................................................................................................................................................................................................................................................................................................................................................................................................518 .......................................................................................................384Interest expense...........................................................................................................................................................................................................................................................................................................................................................................................................................................................33 .......................................................................................................495Use of provision for anniversary bonus payments made ....................................................................................................................................................................................................................(419) ...............................................................................................(596)Actuarial (gains)/losses (demographic assumption) ..........................................................................................................................................................................................................................................................20 .......................................................................................................................0Actuarial (gains)/losses (financial assumption) ...................................................................................................................................................................................................................................................................(636) .......................................................................................................751Actuarial (gains)/losses (experience adjustments)..........................................................................................................................................................................................................................................................615 ...............................................................................................(530)Present value of obligations as of December 31 ..................................................................................................................................................................................................................................8,143 ..............................................................................................8,012

Average number of employees (FTE) 2017 2016

For anniversary bonus ..........................................................................................................................................................................................................................................................................................................................................................................................................3,379 .............................................................................................3,254

2017 2016

Salary increase ..........................................................................................................................................................................................................................................................................................................................................................................................................2.50– 6.50% ......................................................3.00 – 3.50%Discount rates .....................................................................................................................................................................................................................................................................................................................................................................................................1.70– 10.40% ......................................................0.90 – 2.00%

3. Provision for anniversary bonuses: The amount due under the Company’s commitment, as reported in the consolidated balance sheet, is as follows:

In fiscal year 2018, Constantia Flexibles expects €398 thousand (previous year: €261 thousand) in anniversary bonuses.

The key assumptions for the actuarial valuation were:

The weighted average remaining duration for the anniver-saries is 10.4 years.

Duration was determined using probabilities of exit (death, disability, employee turnover) weighted by the amount of cash flows.

In essence, the provisions for anniversary benefits relate to subsidiaries in Austria, Germany, and Spain, where pro-visions have to be recognized based on laws or collective agreements and/or operating agreements, depending on the service affiliation.



Carrying amount as of January 1...............................................................................................................................................................................................................................................................................................................................................1,116 .............................................................................................4,253Change in the scope of consolidation...............................................................................................................................................................................................................................................................................................................................(15) .......................................................................................................546......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,101 ..............................................................................................4,799(Gain)/loss on currency translation differences ..........................................................................................................................................................................................................................................................................(22) ...............................................................................................................99Utilization ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(77) ...............................................................................................(156)Reversal ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(311) .......................................................................................................................0Reclassification ................................................................................................................................................................................................................................................................................................................................................................................................................................................................0 .....................................................................................(3,679)Additions (including interest) .......................................................................................................................................................................................................................................................................................................................................................................................67 ...............................................................................................................53Carrying amount as of December 31 ..................................................................................................................................................................................................................................................................................................................757 ..............................................................................................1,116


Carrying amount as of January 1.......................................................................................................................................................................................................................................................................................................................................56,725 .....................................................................................57,360Change in the scope of consolidation (addition) ...............................................................................................................................................................................................................................................................................76 .............................................................................................1,719Change in the scope of consolidation (disposal) .............................................................................................................................................................................................................................................................(120) .......................................................................................................................0...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................56,681 ......................................................................................59,079(Gain)/loss on currency translation differences ..........................................................................................................................................................................................................................................................................(34) .......................................................................................................193Utilization ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................(9,107) .............................................................................(10,906) Reversal ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................0 ...............................................................................................(354)Transfer/remeasurement ...................................................................................................................................................................................................................................................................................................................................................................................................................0 .............................................................................................3,679Additions .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5,198 .............................................................................................5,034Carrying amount as of December 31 ................................................................................................................................................................................................................................................................................................52,738 ......................................................................................56,725

The other non-current provisions primarily relate to medical insurance for the employees of the Afripack Group.

4. Other non-current provisions

5. Other current provisions

The anniversary benefit obligations are dependent on length of service, staff turnover, and in principle, also on salary.

All obligations (severance, anniversary bonus, pension) are exposed to interest rate risk (discount rate), mortality risk, and disability risk. The risk of a change in legal conditions is not significant, especially in Austria and Germany.


REMAINING TERM 12/31/2017 Total Less 1–5 Over(in € thousand) than 1 years 5 years year

Interest-bearing financial liabilities .................................................................................................................................................................................................................524,125 ..................................18,704 ..........................503,505 ..........................................1,916Other non-current liabilities ................................................................................................................................................................................................................................................................60,069 ....................................................................0 ..................................57,592 ..........................................2,477Trade payables ............................................................................................................................................................................................................................................................................................................................256,252 ..........................256,252 ...................................................................0 ....................................................................0Tax liabilities ..................................................................................................................................................................................................................................................................................................................................................21,946 ..................................21,946 ...................................................................0 ....................................................................0Other liabilities .....................................................................................................................................................................................................................................................................................................................................85,319 ..................................85,319 ...................................................................0 ....................................................................0.................................................................................................................................................................................................................................................................................................................................................................................................................947,711 ............................382,221 ...........................561,097 ...........................................4,393

REMAINING TERM 12/31/2016 Total Less 1–5 Over(in € thousand) than 1 years 5 years year

Interest-bearing financial liabilities .......................................................................................................................................................................................................1,309,991 ..........................155,470 ..................................14,581 ................1,139,940Other non-current liabilities ........................................................................................................................................................................................................................................................149,776 ....................................................................0 ..........................146,786 ..........................................2,990Trade payables ............................................................................................................................................................................................................................................................................................................................308,382 ..........................308,382 ...................................................................0 ....................................................................0Tax liabilities ..................................................................................................................................................................................................................................................................................................................................................26,742 ..................................26,742 ...................................................................0 ....................................................................0Other liabilities .............................................................................................................................................................................................................................................................................................................................110,914 ..........................110,914 ...................................................................0 ....................................................................0.......................................................................................................................................................................................................................................................................................................................................................................................................1,905,805 ............................601,508 ...........................161,366 .................1,142,931

The current provisions primarily relate to provisions for pending litigation amounting to €49,585 thousand (2016: €48,000 thousand), provisions for contract risks and ven-tures, legal and consulting costs, bonuses, other accruals, and warranty provisions. Details of material litigation in the Constantia Flexibles Group are described in Section 11. Material Litigation.

Details of the calculation and approach used for the Long-Term Incentive Plan are described in Section I. Notes to the Consolidated Income Statement, Note 3. Personnel Expenses.

9. Liabilities


(in € thousand) 12/31/2017 12/31/2016

Derivative financial instruments .......................................................................................................................................................................................................................................................................................................................................................2,332 .............................................................................................4,739Liabilities to employees ...........................................................................................................................................................................................................................................................................................................................................................................................27,653 .....................................................................................32,518Accrued unused vacations ..................................................................................................................................................................................................................................................................................................................................................................................9,946 .....................................................................................14,275Other tax liabilities ..............................................................................................................................................................................................................................................................................................................................................................................................................................7,129 .............................................................................................8,748Liabilities to medical insurance funds .......................................................................................................................................................................................................................................................................................................................4,858 .............................................................................................5,827Deferrals ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................779 .............................................................................................3,899Other current interest-bearing financial liabilites .....................................................................................................................................................................................................................................................................................0 .............................................................................................1,500Other liabilities ...........................................................................................................................................................................................................................................................................................................................................................................................................................................32,622 .....................................................................................39,408...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................85,319 ..............................................................................110,914

The carrying amount of the syndicated loan (excl. trans-action costs; term until April 2022) as of December 31, 2016, is (€886,286) thousand and (€236,576) thousand. This loan was repaid in fiscal year 2017.

The interest-bearing financial liabilities include a new syn-dicated loan of €250,000 thousand with a term of 5 years (October 2022). As of the December 31, 2017, reporting date, there are also €182,000 thousand in interest-bear-ing financial liabilities to Oesterreichische Kontrollbank (term until April 2022).

In 2016 interest-bearing financial liabilities included €128,941 thousand bond liabilities, which were settled in2017. The interest-bearing financial liabilities include leaseliabilities of €5,846 thousand (2016: €37,562 thousand).

Collateralized interest-bearing financial liabilities amount-ed to €1,994 thousand (2016: €1,130,468 thousand).

Liabilities to employees mainly include bonuses and time credits of €18,414 thousand (2016: €18,453 thousand), as well as payroll liabilities of €5,526 thousand (2016: €7,465 thousand).

The other non-current liabilities contain the liability from the measurement of the put options for the acquisition of the remaining shares of Parikh Packaging Pvt. Ltd., Oai Hung, and the Afripack Group in an aggregate amount of €47,432 thousand (2016: €119,698 thousand including Verstraete in mould labels N.V.), as well as the contingent purchase price liability for the Pemara Group of €0 thou-sand (2016: €9,056 thousand). They also include the deferred government grants received amounting to €2,854 thousand (2016: €4,752 thousand).

Additionally, other non-current liabilities include cash flow hedge derivatives of €4,803 thousand (2016: €9,073 thousand) with maturities of one to five years.

€4,816 thousand (2016: €7,949 thousand) of the trade payables is attributable to liabilities from capital expendi-tures.

Other current liabilities also include derivatives for fair value hedges amounting to €256 thousand (2016: €2,202 thousand), cash flow hedge derivatives amounting to €2,007 thousand (2016: €2,508 thousand), and a current loan of €0 thousand (2016: €1,500 thousand) from the Group parent company.

10. Other current liabilities


The decline in other liabilities resulted from the final pay-ment of the contingent purchase price liability from the acquisition of the Spear Group, balance as of December 31, 2017: €0 thousand (2016: €2,385 thousand), the payment of the contingent purchase price liability from the acquisition of Constantia Oai Hung Manufacturing Joint Stock Company of €14,273 thousand, balance as of De-cember 31, 2017: €0 thousand (2016: €13,494 thou-sand), and the final payment of the purchase price liabil-ity for the non-controlling interest of Constantia Aloform GmbH of €2,100 thousand, balance as of December 31, 2017: €0 thousand (2016: €2,100 thousand). An addi-tional decrease arose from the discontinuation of the in-terest accrual for the corporate bond that was repaid on May 25, 2017 (2016: €3,612 thousand).

The other liabilities essentially also include a current put option liability for the non-controlling interest of Parikh Packaging Pvt. Ltd. amounting to €12,139 thousand (2016: €5,695 thousand), a payment obligation to Multi- Color Corporation of €6,429 thousand (2016: €0 thou-sand), and a liability of €1,969 thousand for real estate transfer taxes in Germany (2016: €2,739 thousand).

11. Material litigation

Constantia Packaging AG – Squeeze-outIn fiscal year 2010, Sulipo Beteiligungsverwaltungs GmbH (“Sulipo”) acquired 91.49% of the shares in the listed company, Constantia Packaging AG. At the Annual Gen-eral Meeting of Constantia Packaging AG on August 24, 2010, it was resolved to transfer the shares of all other shareholders to Sulipo as the principal shareholder pur-suant to Section 1 (1) Austrian Shareholder Squeeze-Out Act (Gesellschafter-Ausschlussgesetz, GesAusG) in ex-change for payment of a cash settlement of €47.0 per share. This was followed by a delisting from the Vienna Stock Exchange. Due to individual applications by exclud-ed minority shareholders, a review procedure concerning the amount of cash compensation was initiated. In this procedure, the expert Dr. Klaus Rabel was commissioned to prepare an independent business valuation report. He completed his initial task with the release of the document “Opinion regarding the enterprise value of Constantia Packaging AG as of August 24, 2010” on September 19, 2013. The expert derived a settlement price of between

€68.08 and €71.82 per share from the calculated value of the company at the assessment date. This price range was also essentially confirmed in the supplementary opinion of May 29, 2015, which was also prepared by Dr. Klaus Rabel; he made small adjustments to his opinion of September 19, 2013, and calculated a range of €67.55 to €71.29 per share. In March 2016, the body responsible for assessing the cash settlement price sent its estimate of the reasonable amount of the cash compensation to the Vienna Commercial Court. In this estimate, the body confirmed the range determined by Dr. Klaus Rabel and resolved the value at €69.42 per share.

The timing of a final court settlement or any agreement on a final settlement price cannot be predicted at this time. Based on the result of this opinion, management estimat-ed a possible additional payment and recognized a pro-vision for this. The unwinding of the discount on the pro-vision at 4% per annum is recognized through profit and loss under borrowing costs pursuant to IAS 37.60.

I. Notes to the Consolidated Income Statement

1. Sales and cost of materialsNet income from derivatives that are designated in a hedging relationship in accordance with IAS 39 was included in sales in the amount of (€244) thousand (2016: (€347) thousand).

Cost of materials amounting to €874,921 thousand (adjusted 2016: €847,702 thousand) includes materi-als expenses of €782,994 thousand (adjusted 2016: €756,954 thousand), energy costs for production of €29,187 thousand (adjusted 2016: €27,596 thousand), costs of cylinders of €17,123 thousand (adjusted 2016: €16,746 thousand), and expenses for packaging materi-als of €19,363 thousand (adjusted 2016: €18,566 thousand).

Cost of materials also includes a net expense from deriv-atives that are designated in a hedging relationship in ac-cordance with IAS 39 in the amount of €9,374 thousand (2016: €811 thousand).


(in € thousand) 2017 2016 (adjusted)

Proceeds from disposal of tangible assets......................................................................................................................................................................................................................................................................................................638 .......................................................................................................486Gains from currency translation differences ..............................................................................................................................................................................................................................................................................................864 .......................................................................................................436Subsidies and government grants ..........................................................................................................................................................................................................................................................................................................................................1,760 .............................................................................................1,153Insurance proceeds .......................................................................................................................................................................................................................................................................................................................................................................................................................3,483 .............................................................................................6,904Income from disposal of subsidiaries ...................................................................................................................................................................................................................................................................................................................................................0 .............................................................................................8,425Miscellaneous ......................................................................................................................................................................................................................................................................................................................................................................................................................................................5,167 .............................................................................................5,665...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11,912 ......................................................................................23,069


Wages and salaries .................................................................................................................................................................................................................................................................................................................................................................................................(241,973) .....................................................................(233,725)Expenses for severance payments andpayments to company employee pension funds ......................................................................................................................................................................................................................................................(4,112) .....................................................................................(4,063)Employee pension funds ...................................................................................................................................................................................................................................................................................................................................................................................(1,891) .....................................................................................(1,750)Expenses for mandatory social security contributions,pay-related charges, and compulsory contributions............................................................................................................................................................................................................................ (50,194) .............................................................................(48,066)Other social expenses.................................................................................................................................................................................................................................................................................................................................................................................................(8,194) .....................................................................................(8,932)..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(306,364) ......................................................................(296,535)

2. Other operating income

The subsidies and government grants are linked main-ly to conditions such as job guarantees or sales target achievements. The insurance proceeds are predominant-ly attributable to damage claims (storm) by Afripack Pty. Ltd. amounting to €930 thousand (2016: €0 thousand), flood claims by Constantia Teich GmbH of €950 thousand (2016: €0 thousand), and by Afripack Consumer Flexibles Pty. Ltd. of €858 thousand (2016: €5,806 thousand).

The deconsolidation gains are explained in more detail in Section D. Acquisitions and Other Changes in the Scope of Consolidation, Note 2. Deconsolidation.

Miscellaneous income includes income from the reversal of public investment grants amounting to €616 thousand (ad-justed 2016: €561 thousand) and rental income amounting to €211 thousand (adjusted 2016: €415 thousand).

3. Personnel expenses


Total number of employees as of December 31 (FTE) 2017 2016 (adjusted)

Employees ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................7,193 .............................................................................................7,096

IFRS 2 – disclosures1. Long-Term Incentive Plan (LTIP): A Long-Term Incen-tive Plan (in short: LTIP) was introduced in May 2013. It includes about 60 employees worldwide. The value of the LTIP is calculated based on the Wendel trade sale equity value.

In fiscal year 2013, the LTIP was accounted for under IAS 19 because the calculation was based on an internal val-uation model. Due to the completed trade sale to Wendel, accounting for the LTIP as of December 31, 2016, and as of December 31, 2017, was made pursuant to IFRS 2.Each of these employees initially makes an investment (zero bond) in the Group and receives it back at final ma-turity with interest. This zero bond has a fixed interest rate of 5% per annum and is the prerequisite for participation in the LTIP. The term ended in 2015 – with a one- or two-year vesting period, depending on the model.

The basis of the LTIP is a “fictitious participation certif-icate”, which corresponds to a theoretical share in the Company of 0.006939% per €10.000 zero bond com-ponent.

The LTIP payout at the time of the sale of the Company (trade sale) was determined by means of the following for-mula: transaction value x fictitious share in the Company

The payment is made exclusively in cash at the end of the vesting period. Each participating employee receives a payment after a vesting period of 1 year. Participants with an investment of greater than €20 thousand receive only 50% after 1 year and the remaining 50% after 2 years. The vesting period begins at the closing of the sale of the Company.

The LTIP is included in the salaries in the amount of €1,050 thousand (2016: €1,943 thousand). A payment of €5,659 thousand (2016: €9,030 thousand) was made in 2017. The total amount of the provisions in fiscal year 2017 thus amounts to €493 thousand (2016: €5,102 thousand).

A Management Equity Program (MEP) was launched at the level of the shareholder, Constantia Lux Parent S.A., Luxembourg, in December 2015. This also covers senior executives at Constantia Flexibles. The value of the MEP is calculated on the basis of equity value of Constantia Lux Parent S.A. In fiscal year 2016, the MEP was ac-counted for as equity-settled under IFRS 2. The fair value calculation at the grant date indicated that no recognition as a personnel expense was necessary.

In 2017, the expenses of €3,855 thousand have been recognized pursuant to IFRS 2, caused by the sale of the Labels Division and restructuring measures.

Contributions to employee benefit funds in the amount of €776 thousand (2016: €692 thousand) are included in the expenses for severance payments and contributions to employee benefit funds.



Depreciation and amortization .......................................................................................................................................................................................................................................................................................................................................(117,651) .....................................................................(116,420)Impairment ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................(507) .......................................................................................................................0..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(118,158) ......................................................................(116,420) thereof amortization of customer list (IFRS 3) .................................................................................................................................................................................................................................. (39,581) .............................................................................(39,189)


Losses from currency translation differences ...................................................................................................................................................................................................................................................................(3,888) .....................................................................................(1,323)Losses from disposal of tangible and intangible assets..............................................................................................................................................................................................................(1,202) .....................................................................................(1,320)Miscellaneous other expenses .....................................................................................................................................................................................................................................................................................................................................................................(54) ...............................................................................................................67.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(5,144) .....................................................................................(2,576)


Interest income ...............................................................................................................................................................................................................................................................................................................................................................................................................................................3,849 .............................................................................................1,330Interest expense........................................................................................................................................................................................................................................................................................................................................................................................................................(61,047) .............................................................................(65,809)Reversal transaction cost ........................................................................................................................................................................................................................................................................................................................................................................ (49,461) .....................................................................................(8,394) Net interest expense for pension provisions ....................................................................................................................................................................................................................................................................................(992) .....................................................................................(1,657)Compounding of other non-current liabilities and provisions ...................................................................................................................................................................................(7,090) .....................................................................................(4,869)Net interest income and expenses ............................................................................................................................................................................................................................................................................................(114,741) .............................................................................(79,399) (Gains)/losses from currency translation difference ........................................................................................................................................................................................................................................3,719 .....................................................................................(2,033)Derivatives – held for trading......................................................................................................................................................................................................................................................................................................................................................................(331) ...............................................................................................(336)Other ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................858 .....................................................................................(9,121)Other financial income and expense.........................................................................................................................................................................................................................................................................................................4,246 .............................................................................(11,491)

4. Depreciation, amortization, and impairment losses

5. Other operating expenses

6. Net financial income and expense



Current tax ...................................................................................................................................................................................................................................................................................................................................................................................................................................................... (16,530) .............................................................................(27,003)Deferred tax........................................................................................................................................................................................................................................................................................................................................................................................................................................................11,671 .....................................................................................13,367.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(4,860) .............................................................................(13,636)


Earnings before tax (EBT) ..................................................................................................................................................................................................................................................................................................................................................................(69,490) .............................................................................(24,707)Tax expense of 25% ...........................................................................................................................................................................................................................................................................................................................................................................................................17,373 .............................................................................................6,177Other tax rates ..................................................................................................................................................................................................................................................................................................................................................................................................................................................7,115 .............................................................................................1,815Changes in tax rates ............................................................................................................................................................................................................................................................................................................................................................................................................................930 .....................................................................................(1,956)Other non-deductible expenses and income ........................................................................................................................................................................................................................................................................(4,773) .............................................................................(10,358) Tax losses not recognized ..................................................................................................................................................................................................................................................................................................................................................................(25,505) .....................................................................................(9,313)Total tax expense .................................................................................................................................................................................................................................................................................................................................................................................................................(4,860) .............................................................................(13,636)Effective tax rate ......................................................................................................................................................................................................................................................................................................................................................................................................................(6.99%) .........................................................................(55.19%)

The interest expense includes factoring expenses of €974 thousand (2016: €905 thousand) and finance leases of €163 thousand (2016: €161 thousand). The expenses from the reversal of transaction costs include the derecognition of the entire accrued transaction costs for the syndicated non-current loans that were repaid in full in fiscal year 2017. The compounding on other non- current liabilities and provisions includes expenses of €5,288 thousand (2016: €3,423 thousand) for the com-pounding on the discounted liabilities from put options and €18 thousand (2016: €627 thousand) for the contingent purchase price liability from the acquisition of Oai Hung.

The other financial income and expense essentially in-cludes gains and losses from the remeasurement of op-tions for the acquisition of the remaining shares in Parikh Packaging Pvt. Ltd. of (€4,106) thousand (2016: (€6,164) thousand), and in the Afripack Group of €5,843 thousand (2016: €0 thousand), and in Oai Hung in the amount of

€1,497 thousand. This item also includes loan arrange-ment fees of €1,441 thousand (2016: €1,783 thousand).Foreign currency gains/(losses) originated from financing activities and were primarily due to the changes in US dol-lar and Vietnamese dong exchange rates.

7. Income tax In the context of group taxation, the Austrian companies of Constantia Flexibles Holding GmbH were combined to form a tax group within the meaning of Section 9 of the Austrian Corporate Income Tax Act (Körperschaft-steuergesetz, KStG). The tax results of the group members are allocated to Constantia Flexibles Holding GmbH (tax group parent) after offsetting against any losses result-ing from sub-group consolidation. To compensate for the transfer of taxable income, a tax allocation was agreed in the group and tax compensation contract, which is calcu-lated according to the stand-alone method.

Tax reconciliation


(in € thousand) 2017 2017 2016 2016 Deferred tax Deferred tax Deferred tax Deferred tax assets liabilities assets liabilities

Intangible assets, tangible assets,financial and non-current assets ....................................................................................................................................................................................................................................33,457 ..........................190,042 ..................................17,751 ..........................320,984Provisions and liabilities ...................................................................................................................................................................................................................................................................................13,097 ..................................12,748 ..................................25,105 ..........................................3,131Untaxed reserves........................................................................................................................................................................................................................................................................................................................................................0 ....................................................................0 ...................................................................0 ..........................................2,470Tax losses carried forward ......................................................................................................................................................................................................................................................................12,226 ....................................................................0 ..................................37,766 ....................................................................0Other ................................................................................................................................................................................................................................................................................................................................................................................................1,442 ..........................................2,145 ..........................................1,990 ..........................................4,832.........................................................................................................................................................................................................................................................................................................................................................................................................................60,222 ............................204,936 ...................................82,613 ...........................331,418Tax credits with the same tax authority ..........................................................................................................................................................................................(48,439) ..........................(48,439) .........................(69,036) ..........................(69,036)Net deferred tax assets and liabilites.............................................................................................................................................................................................................11,784 ............................156,497 ...................................13,577 ...........................262,382


As of January 1 .............................................................................................................................................................................................................................................................................................................................................................................................................................248,805 .............................................................................271,541Currency differences .......................................................................................................................................................................................................................................................................................................................................................................................................(1,323) .......................................................................................................358Changes recognized directly in equity First consolidation ..........................................................................................................................................................................................................................................................................................................................................................................................................3,070 .............................................................................................9,827 Deconsolidation ..................................................................................................................................................................................................................................................................................................................................................................................................... (93,787) .....................................................................................(6,241) Changes in equity ......................................................................................................................................................................................................................................................................................................................................................................................................................454 .......................................................................................................312Changes recognized through profit or loss - discontinued operations ..........................................................................................................................................(835) .......................................................................................................................0Changes recognized through profit or loss .......................................................................................................................................................................................................................................................................... (11,671) .............................................................................(26,993)As of December 31 ................................................................................................................................................................................................................................................................................................................................................................................................144,713 ..............................................................................248,805

No deferred tax assets were recognized in respect of cor-porate income tax loss carryforwards of €298,426 thou-sand (2016: €296,991 thousand). No deferred tax assets were recognized in respect of interest carryforwards of €0 thousand (2016: €6,496 thousand).

The net position for deferred taxes changed as follows in the 2017 reporting period:

8. Deferred taxes


The changes recognized directly in equity relate mainly to gains and losses on cash flow hedges and actuarial ef-fects recognized in other comprehensive income.

On the basis of current tax regulations, it may be assumed that the difference between the taxable investment and the proportional share of equity of the subsidiaries includ-ed in the consolidated financial statements, which results essentially from retained earnings and unabsorbed losses, will remain largely exempt from taxation, so no deferred taxes were recognized.

J. Notes to the ConsolidatedCash Flow Statement

The cash flow statement is prepared using the indirect method. The cash flows from operating, investing, and fi-nancing activities are presented separately in the cash flow statement.

Cash and cash equivalents reported in the cash flow statement are comprised of cash balances and invest-ments with a remaining duration of 3 months or less at the date of acquisition and therefore correspond to cash and cash equivalents.

Disposal of subsidiaries, less cash transferredThe Labels Division was sold in October 2017. The amount presented in the cash flow statement is composed of consideration received of €698,538 thousand and an incoming payment for the discharge of intragroup financ-ing of €126,562 thousand, as well as the Labels Division’s cash and cash equivalents disposed of in the amount of (€42,046) thousand.

Aluprint Plegadizos was sold in November 2016. The €57,582 thousand selling price comprises financial con-sideration of €50,582 thousand plus contingent consider-ation of €7,000 thousand. Cash and cash equivalents dis-posed of amounted to (€9,935) thousand.

The classification of assets and liabilities disposed of as part of deconsolidation is presented in Section D. Acquisi-tions and Other Changes to the Scope of Consolidation.

Acquisition of subsidiaries, less cash transferredThis item comprises payments of contingent consideration in connection with the acquisition of Oai Hung (€14,273 thousand) and the Spear Group (€2,480 thousand), as well as the payment for the acquisition of Constantia Alucap S.r.l. (€19,823 thousand). The acquired balances of cash and cash equivalents of Constantia Alucap S.r.l. and Constantia San Prospero S.r.l. amounted to €1,309 thousand. The consideration for the acquisition of Constantia San Prospero S.r.l. was already paid on the acquisition date in November 2016.

In fiscal year 2016 this item includes a contingent pur-chase price payment in connection with the acquisition of the Spear Group in fiscal year 2013 in the amount of (€35,939) thousand, the purchase price of (€15,066) thousand paid to acquire Oai Hung, and an additional pur-chase price payment for the acquisition of the Pemara Group in the amount of (€871) thousand. The balances of cash and cash equivalents acquired from the first consol-idation of the Afripack Group, the Pemara Group, and Oai Hung in the amount of €7,621 thousand are also present-ed there. The purchase prices for the Afripack Group and the Pemara Group were already paid at the time of their acquisition in November and December 2015.

The classification of the assets and liabilities acquired as part of the first consolidations is presented in Section D. Acquisitions and Other Changes to the Scope of Consolidation.

Payments for other financial investmentsThe payments for other financial investments in the previous year relate primarily to the payment of €6,772 thousand to acquire the assets of Constantia San Prospero S.r.l. and a loan receivable from the same company.


NON-CASH CHANGES

Carrying Cash Acquisitions/ Foreign Other Carrying amount flows divestitures exchange amount(in € thousand) 1/1/2017 movements 12/31/2017

Interest-bearing non-current financial liabilities ...........................................................................................................................................1,154,521..................(641,211) ..........................(23,429) ..........................(25,934) ..................................41,474 ..........................505,421 Interest-bearing current financial liabilities .....................................................................................................................................................155,470..................(139,879) ................................. (3,255) ..................................(1,619) ..........................................7,987 ..................................18,704Other current interest-bearing financial liabilites ........................................................................................................................................................................1,500..................................(1,500) ....................................................................0 ....................................................................0 ...................................................................0 ....................................................................0Non-current loan receivables .....................................................................................(13,352)..........................(47,201) ....................................................................5 ............................................................15 ...................................................................0 ..........................(60,533)Non-current loan and lease receivables ....................................(1,077).....................................................182 ....................................................896 ....................................................................0 ...................................................................0 ....................................................................0Current loan and lease receivables .......................................................................(167)............................................................(7) ....................................................175 ....................................................................0 ...................................................................0 ....................................................................0 Other current receivables .................................................................................................................(2,812)..........................................2,812 ....................................................................0 ....................................................................0 ...................................................................0 ....................................................................0..............................................................................................................................................................................................................................................1,294,083...................(826,805) ..........................(25,610) ..........................(27,538) ...................................49,461 ...........................463,592

The other non-cash changes include the reversal of the accrued transaction costs for the non-current syndicated loans that were repaid in full in fiscal year 2017.

Other cash flow disclosuresInvestments in tangible and intangible assets presented in the cash flow statement correspond to the investments reported in the consolidated asset table, adjusted for the change in liabilities arising from the acquisition of tangible and intangible assets, changes in prepayments on fixed assets which are included in non-current assets, as well as non-cash additions for finance leases.

The “Other non-cash income/expenses” item mainly com-prises gains and losses from changes in exchange rates and expenses from the fair value measurement of put option liabilities.

K. Financial Instruments

Risk management strategiesConstantia Flexibles is exposed to risks with respect to its assets, liabilities, and forecast transactions arising from changes in exchange rates, interest rates, and quoted market prices. Management of these risks is regulated by policies that apply throughout the Group. The aim of fi-nancial risk management is to mitigate these market risks through ongoing operational and finance-related activities. Derivative financial instruments are only used as hedging instruments.

Financial concentration riskThe financial concentration or cluster risk describes the risk to the Group emanating from a dependency upon banks or other financial counterparties. Constantia Flexibles follows the principle of financial independence, which is also regulated in Group-wide policies. The financial inde-pendence of the Group is guaranteed by actively manag-ing the allocation of business. The Constantia Flexibles Group is not exposed to any concentration risks.

Borrowings and redemption of financial liabilities


(in € thousand) 12/31/2017 12/31/2016

Non-current financial assets .......................................................................................................................................................................................................................................................................................................................................................(60,533) .............................................................................(14,430)Current financial assets ........................................................................................................................................................................................................................................................................................................................................................................................(2,000) .....................................................................................(2,167)Other current interest-bearing financial liabilities ..................................................................................................................................................................................................................................................................................0 .............................................................................................1,500Interest-bearing non-current financial liabilities ..................................................................................................................................................................................................................................................505,421 ...................................................................1,154,521Interest-bearing current financial liabilities ....................................................................................................................................................................................................................................................................................18,704 .............................................................................155,470Debt .........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................461,592 ....................................................................1,294,894 Cash and cash equivalents ...............................................................................................................................................................................................................................................................................................................................................................(64,717) .....................................................................(122,706) Total .........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................396,874 ....................................................................1,172,188

Capital risk managementThe Group manages its capital with the objective of en-suring that all Group entities can operate under the go-ing-concern assumption, while concurrently maximizing

Foreign currency riskForeign currency risk arises from the fact that the value of a financial instrument can change due to exchange rate fluctuations. The Group enters into foreign currency de-rivatives in order to hedge both the foreign exchange risk related to cash flow from operating activities (cash flow hedges) and the risk of fair value changes of assets and liabilities reported in the balance sheet (fair value hedg-es). No derivatives are used for speculative purposes. As a matter of principle, only instruments that can be clearly measured and recognized are used.

The transaction risk is calculated for each individual for-eign currency. Both foreign currency receivables and li-abilities arising from transactions are recognized in the balance sheet at the time that the contract is entered into, as are certain off-balance-sheet items, which above all in-clude recurring operating transactions (forecast material purchases and sales).

the income from its equity investments by optimizing the debt-to-equity ratio.

The net debt at year end was as follows:

Foreign currency risks for the Constantia Flexibles Group result from the fact that it operates worldwide in a num-ber of countries where it owns production sites and sells its goods and services. Owing to the Constantia Flexibles Group’s decentralized organizational structure, material purchasing generally takes place in the respective national currencies of the local companies. Similarly, the resulting invoices of the foreign companies are largely billed in the local currency. This results in a closed currency position and a significant reduction in the identifiable currency risk. In the case of positions that cannot be closed through a matching transaction (natural hedge), overhangs are hedged via foreign currency derivatives that correspond to the risk exposure and horizon.

Primary financial instruments, which include trade receiv-ables and payables, financial receivables and liabilities, and securities are allocated to the following currency positions at the reporting date:


12/31/2017 12/31/2016 Currency in € thousand In % Currency in € thousand In %

Primary financial instrument assets ..........................................................................USD...........................230,822 ......................................44.5% .................................................USD ..................................87,717 ......................................21.1%.............................................................................................................................................................................................................................................................................EUR...........................195,702 ......................................37.8% .................................................EUR ..........................191,960 ......................................46.1%...............................................................................................................................................................................................................................................................................ZAR...................................24,167 ..............................................4.7% ...................................................ZAR ..................................34,606 ..............................................8.3%...........................................................................................................................................................................................................................................................................MXN...................................20,941 ..............................................4.0% ..............................................MXN ..................................39,974 ..............................................9.6%.................................................................................................................................................................................................................................................................................TRY...................................15,927 ..............................................3.1% ....................................................TRY ..................................13,693 ..............................................3.3%.............................................................................................................................................................................................................................................................................GBP...................................10,150 ..............................................2.0% ................................................GBP .............................. 19,679 ..............................................4.7%.............................................................................................................................................................................................................................................................................VND..........................................6,153 ..............................................1.2% ................................................VND ..........................................6,034 ..............................................1.4%..................................................................................................................................................................................................................................................................................INR..........................................4,343 ..............................................0.8% ..................................................... INR ..........................................4,291 ..............................................1.0%.............................................................................................................................................................................................................................................................................RUB..........................................2,644 ..............................................0.5% ................................................RUB ..........................................3,063 ..............................................0.7%.............................................................................................................................................................................................................................................................................DKK..........................................1,931 ..............................................0.4% ................................................DKK ..........................................1,842 ..............................................0.4%...............................................................................................................................................................................................................................................................................PLN..........................................1,460 ..............................................0.3% ..................................................PLN ..........................................1,777 ..............................................0.4%.............................................................................................................................................................................................................................................................................AUD.....................................................892 ..............................................0.2% ................................................AUD ..........................................4,691 ..............................................1.1%.........................................................................................................................................................................................................................................................................Other..........................................3,203 ..............................................0.6% ............................................Other ..........................................7,155 ..............................................1.7%Total .......................................................................................................................................................................................................................................................................................................518,336 ....................................................................................................................................................................................416,482 ............................................................................

12/31/2017 12/31/2016 Currency in € thousand In % Currency in € thousand In %

Primary financial instrument liabilities ..............................................................EUR...........................697,142 ......................................81.3% .................................................EUR ................1,307,188 ......................................73.3%.............................................................................................................................................................................................................................................................................VND...................................40,582 ..............................................4.7% ................................................VND ..................................61,596 ..............................................3.5%..............................................................................................................................................................................................................................................................................USD...................................40,131 ..............................................4.7% .................................................USD .......................327,081 ......................................18.3%...............................................................................................................................................................................................................................................................................ZAR...................................29,217 ..............................................3.4% ...................................................ZAR ...............................29,966 ..............................................1.7%..................................................................................................................................................................................................................................................................................INR...................................29,163 ..............................................3.4% ..................................................... INR ..................................12,336 ..............................................0.7%...........................................................................................................................................................................................................................................................................MXN..........................................3,954 ..............................................0.5% ..............................................MXN .......................................8,262 ..............................................0.5%.................................................................................................................................................................................................................................................................................TRY..........................................8,209 ..............................................1.0% ....................................................TRY .......................................8,660 ..............................................0.5%.............................................................................................................................................................................................................................................................................RUB..........................................3,147 ..............................................0.4% ................................................RUB .......................................4,073 ..............................................0.2%.............................................................................................................................................................................................................................................................................GBP..........................................1,493 ..............................................0.2% ................................................GBP .......................................6,630 ..............................................0.4%............................................................................................................................................................................................................................................................................RON.....................................................991 ..............................................0.1% ................................................RON .......................................2,398 ..............................................0.1%.............................................................................................................................................................................................................................................................................AUD....................................................................0 ..............................................0.0% ................................................AUD .......................................4,175 ..............................................0.2%.............................................................................................................................................................................................................................................................................CNY....................................................................0 ..............................................0.0% .................................................CNY .......................................3,467 ..............................................0.2%.........................................................................................................................................................................................................................................................................Other..........................................3,087 ..............................................0.4% ............................................Other ..........................................7,330 ..............................................0.4%Total .......................................................................................................................................................................................................................................................................................................857,114 ..........................................................................................................................................................................1,783,162 ............................................................................


Liquidity riskLiquidity risk is the risk of not having funds available at all times that can be used to settle financial liabilities that are incurred. Accordingly, the Group ensures that sufficient cash and cash equivalents are available or that necessary funding is secured through corresponding credit lines. Liquidity risk is determined by the currency-specific liquid-ity planning carried out across the Group. Capitalization measures are planned for all Group entities based on the results.

In order to minimize liquidity risk, Constantia Flexibles has committed lines available in the amount of €165 million, of which €165 million (2016: €150 million) were free at the reporting date.

Interest rate riskInterest rate risk occurs in the form of net interest or pres-ent value risks. Interest rate risk cannot be eliminated, since an interaction between present value and net inter-est risk exists. Present value risk adversely impacts the Group in the fair value of interest-bearing financial instru-ments and investments, while net interest risk impacts in-terest expense or interest income.

At the reporting date, qualifying interest rate swaps and interest rate caps on a euro basis were designated as cash flow hedges. Under the interest rate swap contracts,

Constantia Flexibles pays a fixed interest rate on the notional value of the swap contract and in return receives variable interest rates on the same principal amount. These interest rate swaps offset the impact on cash flows of the underlying variable-rate financial liabilities due to future changes in interest rates. Interest rate caps limit the risk of rising EURIBOR interest rates at 2.00% p.a.

Liquidity and interest rate risk tablesThe average interest rate on borrowings is 3.02%.

A facility agreement is a significant source of funding. This funding consists of a long-term loan in the amount of €250 million and an available revolving credit line (RCF) of €125 million as of the reporting date, both maturing on October 5, 2022.

The following tables show the remaining contractual ma-turities of the Group’s primary financial liabilities. The ta-bles are based on the undiscounted cash flows from fi-nancial liabilities and are based on the earliest date at which the Group can be forced to pay. The table includes both interest and principal payments. If interest pay-ments are based on variable parameters, the undiscount-ed amount is determined based on the interest rates at the reporting date. The contractual maturities are based on the earliest date at which the Group can be forced to make payments.


The “Non-financial liabilities” item consists of prepaid expenses, prepayments, liabilities to employees and for social security benefits, liabilities to tax authorities, and VAT liabilities.

Non-interest bearing financial instruments include trade payables, call/put option liabilities, contingent consider-ation liabilities (earn-outs), and other liabilities.

The following table describes the expected maturities of the Group’s primary financial assets. The table below was prepared on the basis of undiscounted contractual matur-ities of financial assets including interest thereon. The in-clusion of information on primary financial assets is neces-sary in order to understand the liquidity risk management of the Group, since this is done on a net basis.

(in € thousand) CARRYING AMOUNT UNDISCOUNTED CASH FLOWS Total Weighted Less than 1–5 years Over Total average 1 year 5 years effective interest rate

12/31/2017Non-financial instruments ...............................................................................................................61,494...............................................................................................................55,131 ..........................................3,886 ..........................................2,477 ..................................61,494Non-interest bearing financial instruments ...................................................................................................................................333,065.......................................................................................................288,489 ..................................49,525 ...................................................................0 ..........................338,014Finance lease liability ................................................................................................................................................5,846......................................7.47% ..........................................1,281 ..........................................5,117 ..........................................1,966 ..........................................8,364Variable interest rate instruments ..............................................................316,681......................................2.46% ..................................20,381 ..........................345,912 ...................................................................0 ..........................366,293Fixed interest rate deposits ..............................................................................................201,598......................................3.95% ..........................................8,170 ..........................202,868 ...................................................................0 ..........................211,038........................................................................................................................................................................................................................................................918,684........................................................................................................373,452 ............................607,308 ..........................................4,443 ...........................985,204

12/31/2016Non-financial instruments ...............................................................................................................82,090...............................................................................................................72,834 ..........................................9,256 ...................................................................0 ..................................82,090 Non-interest bearing financial instruments ...................................................................................................................................471,672.......................................................................................................340,878 ..........................156,692 ...................................................................0 ..........................497,571 Finance lease liability ........................................................................................................................................37,562......................................4.96% ..........................................5,856 ..................................18,403 ..................................29,613 ..................................53,872 Variable interest rate instruments ..............................................................900,241......................................4.00% ..................................65,327 ..........................197,447 ..........................905,361 ................1,168,135 Fixed interest rate deposits ..............................................................................................373,688......................................6.64% ..........................147,284 ..................................30,241 ..........................225,215 ..........................402,740 ..............................................................................................................................................................................................................................................1,865,252........................................................................................................632,179 ............................412,040 .................1,160,189 .................2,204,407


The item “Non-financial assets” consists of prepaid ex-penses, prepayments received, and advances to employ-ees and social benefits receivables, receivables from tax authorities, and VAT receivables.

Non-interest bearing financial instruments include trade receivables and other receivables.

Variable-rate financial instruments comprise loan receiv-ables, sub-lease receivables, reimbursement claims, and other claims.

Credit riskCredit risk or the risk of delayed payment or non-payment by a counterparty is managed by using credit checks, credit limits, and routine audit procedures. Where possible, the Group obtains state export guarantees or guarantees from private credit insurers in order to reduce the risk of pay-ment default. The Group also limits credit risk by only working with financial partners with excellent credit ratings.

On the assets side, the reported amounts of primary finan-cial instruments represent both the maximum credit and the maximum default risks.

Valuation allowances are recognized for all identified risks, with the result that management is of the opinion that no other credit risks will arise.

Commodity price riskIn its business activities, Constantia Flexibles is exposed to commodity price risks associated with aluminum. The aluminum risks of the Group are due to the fact that the Constantia Flexibles Group processes aluminum.

The price risks of the commodity listed on the London Metal Exchange (LME) are hedged by standard commodity futures. Hedges of future cash flows from the acquisition of aluminum are classified as cash flow hedges if the criteria for using hedge accounting are met. In other cases, deriva-tives used to hedge commodity price risk are classified as held for trading. In the area of commodity price hedging, the principle also applies that only derivatives that can be clearly measured and recognized are used.

(in € thousand) CARRYING AMOUNT UNDISCOUNTED CASH FLOWS Total Weighted Less than 1–5 years Over Total average 1 year 5 years effective interest rate

12/31/2017Non-financial assets ............................................................................................................................................25,311...............................................................................................................21,366 ..........................................3,946 ...................................................................0 ..................................25,311Non-interest bearing financial instruments ...................................................................................................................................389,579.......................................................................................................175,826 ..........................213,753 ...................................................................0 ..........................389,579Variable interest rate instruments ......................................................................64,039......................................4.09% ..........................................9,671 ..................................60,533 ...................................................................0 ..................................70,204Variable interest rate deposits .........................................................................................64,717......................................0.23% ..................................64,792 ....................................................................0 ...................................................................0 ..................................64,792........................................................................................................................................................................................................................................................543,646........................................................................................................271,654 ............................278,231 ....................................................................0 ...........................549,886

12/31/2016Non-financial assets ............................................................................................................................................38,793...............................................................................................................31,041 ..........................................7,752 ...................................................................0 ..................................38,793 Non-interest bearing financial instruments ...................................................................................................................................271,057.......................................................................................................264,179 ..........................................7,277 ...................................................................0 ..........................271,456 Variable interest rate instruments ......................................................................22,718......................................2.42% ..........................................7,014 ..................................11,966 ..........................................5,380 ..................................24,360 Variable interest rate deposits .................................................................................122,706......................................0.38% ..........................123,177 ....................................................................0 ...................................................................0 ..........................123,177 ........................................................................................................................................................................................................................................................455,275........................................................................................................425,411 ...................................26,995 ..........................................5,380 ...........................457,787


Risk analysisExchange rate risk: The risk analysis for foreign curren-cies is carried out based on the net financial position and cash flows in foreign currency operating activities. On av-erage, the risk horizon for this analysis is about 6 months, since prices can be adjusted after this period. However, some business activities may have longer maturities.

The risk is calculated based on the net positions per cur-rency existing at the reporting date using the “value-at-risk” approach. At the reporting date, an effect of €0.3 mil-lion for the Group’s income statement may arise from the EUR/USD exposure. Due to the uncertainty of the EUR/ZAR exchange rate and the high volatility of this currency, the risk amounts to €0.5 million.

The risk in case of negative changes in all 33 currency pairs at the same time amounts to €3.1 million. The cur-rent foreign currency hedging transactions have maturity until 2019.

A rise in interest rates in the eurozone by 1.0% would re-sult in additional interest expense for the variable-rate financial liabilities of €1.7 million. If the interest rates in all currency areas were to increase by 1.0%, the interest expense of the variable-rate financial liabilities would in-crease by €2.4 million.

Commodity price risk: If the LME aluminum price were to fall by 10%, the carrying amount of inventories would decrease by €3,983 thousand. The calculation of the sen-sitivity is based on the aluminum stocks recorded at the closing inventories, in metric tons.

Sensitivity analyses as of December 31, 2017(in € thousand) Change EUR USD Other Total

Exchange rate risksP&L impact of negative developmentof all currencies accordingto market volatility (cash flow at risk) ..................................................................................market volatility ....................................................................0 ............................................(251) .................................(2,892) ..................................(3,143) Interest rate risksChange in net interest result dueto a change in interest rates of......................................................................................................................................................................................1% ................................. (1,709) ............................................................(5) ...........................................(719) ..................................(2,432) Change AL

Commodity price risksChange in inventory valuation due to an LME aluminum price cut of ...................................................................................................................................................................10% .......................................................................................................................................................................................................................................................................(3,983)


Primary financial instrumentsThe holdings of primary financial instruments can be seen directly from the balance sheet and the accompanying disclosures.

Cash and cash equivalentsThe carrying amounts can be regarded as reasonable esti-mates of fair value.

Securities included in non-current and current assetsThe fair value of publicly traded securities is based on their current market prices. All securities held by the

Derivative financial instrumentsOnly standard market instruments with sufficient liquidity are used for hedging purposes.

Group are classified as available-for-sale assets. Secu-rities that are listed in an active market and for which a quoted price is available are measured at the current mar-ket price at the reporting date. If the fair value of equity in-struments cannot be reliably determined due to lack of an active market and a quoted price, they are measuredat cost plus transaction costs net of impairment losses.

The breakdown of the long-term securities held at thereporting date is as follows:

Cash flow hedgesCurrency derivatives are used to hedge future cash flows on pending and forecast foreign currency transactions.

Sensitivity analyses as of December 31, 2016(in € thousand) Change EUR USD Other Total

Exchange rate risksP&L impact of negative developmentof all currencies accordingto market volatility (cash flow at risk) ..................................................................................market volatility ....................................................................0 ............................................(728) .................................(7,871) ..................................(8,599) Interest rate risksChange in net interest result dueto a change in interest rates of......................................................................................................................................................................................1% ............................................(617) ..................................(1,943) ...........................................(187) ..................................(2,747) Change AL

Commodity price risksChange in inventory valuation due to an LME aluminum price cut of ...................................................................................................................................................................10% .......................................................................................................................................................................................................................................................................(3,188)

(in € thousand) 12/31/2017 12/31/2016

Fund shares ................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,083 .............................................................................................1,083Shares ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................212,452 .............................................................................................2,627.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................213,535 ..............................................................................................3,710


Commodity derivatives are also used to hedge commodity price risks (aluminum) as well as duty premium paid (DPP) on highly probable forecast transactions.Interest rate swaps on a EUR basis are used to hedge interest rate risk. The fair values of the interest rate de-rivatives result from changes in the yield curve that have occurred since the beginning of their term. To limit the in-terest expense, there are also interest rate caps on a EUR basis. Since the intrinsic value of the interest rate caps is currently set at zero, the fair value (current market value) is recognized in profit or loss as held for trading.

Fair value hedgesForeign exchange forward contracts were entered into and classified as fair value hedges in order to hedge the

financial portfolio. Changes in the fair value of these for-eign currency derivatives are reported in net financial in-come and expense.

Held for tradingForeign currency and commodity derivatives (aluminum, DPP) that do not meet the requirements for hedge ac-counting under IAS 39 with regard to documentation and effectiveness are classified as held for trading. Changes in the fair value of these derivative financial instruments are recognized in profit or loss in the consolidated income statement.

Derivative financial instruments classified as cash flow hedges and recognized in the hedging reserve:

Cash flow hedge 12/31/2017 12/31/2017 12/31/2016 12/31/2016(in € thousand) Currency or Nominal Market value Nominal Market value commodity value1 in € thousand value1 in € thousand

Currency derivativesForwards ..........................................................................................................................................................................................................................USD...................................................Sale ..................................19,084 ....................................................321 ..................................28,167 ..................................(1,727)..............................................................................................................................................................................................................................................................................USD......................................................Buy ..........................................6,003 ............................................(500) ..........................................6,179 ....................................................172 .............................................................................................................................................................................................................................................................................GBP...................................................Sale ..........................................1,810 ............................................................(9) ..........................................1,465 ....................................................(36).............................................................................................................................................................................................................................................................................GBP......................................................Buy ....................................................360 ....................................................................8 ...................................................................2 ...........................................................(0).............................................................................................................................................................................................................................................................................EUR......................................................Buy ..................................11,896 ............................................(958) ..........................................9,145 ............................................(574)...............................................................................................................................................................................................................................................................................SEK......................................................Buy ....................................................197 ............................................................(3) ....................................................262 ...........................................................(0)...............................................................................................................................................................................................................................................................................ZAR...................................................Sale ..................................................N/A ...................................................N/A ..................................70,600 ............................................(313)...............................................................................................................................................................................................................................................................................................................................................................Buy ..........................................1,120 ............................................................34 ....................................................568 ...........................................................(0).............................................................................................................................................................................................................................................................................AUD...................................................Sale ..........................................1,210 ............................................................47 ..........................................1,900 ....................................................(24)...........................................................................................................................................................................................................................................................................MXN...................................................Sale ..................................................N/A ...................................................N/A ..........................................3,000 ....................................................................4 .................................................................................................................................................................................................................................................................................TRY...................................................Sale ..................................................N/A ...................................................N/A ..........................................2,000 ............................................................11 .................................................................................................................................................................................................................................................................................JPY......................................................Buy ..................................12,100 ........................................................(6) ..................................25,300 ....................................................................5 Commodity derivativesLME forward contracts .......................................................................................................................................................AL...................................................Sale ..........................................3,200 ............................................(403) ..........................................3,250 ....................................................(89)........................................................................................................................................................................................................................................................................................AL......................................................Buy ..................................35,350 ..........................................5,362 ..................................44,500 ..........................................4,666 DPP forward contracts .............................................................................................................................................DPP...................................................Sale ..........................................1,025 ............................................................(2) ..........................................2,000 ...........................................................(1)..............................................................................................................................................................................................................................................................................DPP......................................................Buy ..........................................2,175 ....................................................(23) ..........................................6,475 ....................................................(97)Interest rate derivativesInterest rate swaps ..................................................................................................................................................................EUR.......................................................................................................180,000 ..................................(4,803) ..........................200,000 ..................................(8,389)

..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................(934) ..............................................................................................................(6,392)

1 Nominal values for currencies reported in thousands, commodities in metric tons of aluminum (AL)


Derivative financial instruments included in fair value hedges or classified as held for trading and recognized in the con-solidated income statement:

Held for trading 12/31/2017 12/31/2017 12/31/2016 12/31/2016(in € thousand) Currency or Nominal Market value Nominal Market value commodity value1 in € thousand value1 in € thousand

Currency derivativesForwards .........................................................................................................................................................................................................................GBP...................................................Sale ....................................................169 ........................................................(0) ..................................................N/A ..................................................N/A..............................................................................................................................................................................................................................................................................USD...................................................Sale ..........................................1,030 ........................................................28 ...............................................N/A ..................................................N/AInterest rate derivativesInterest caps ....................................................................................................................................................................................................EUR...................................................Sale ..........................400,000 ......................................1,876 .......................400,000 ..........................................1,736 Commodity derivativesForward contracts ...................................................................................................................................................................................AL......................................................Buy ..........................................1,325 ................................................333 ..........................................1,625 ....................................................111........................................................................................................................................................................................................................................................................................AL...................................................Sale ....................................................700 ....................................................(84) ....................................................600 ............................................................12.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................2,153 .......................................................................................................................1,835

1 Nominal values for currencies reported in thousands of Euros, commodities in metric tons of aluminum (AL)

Fair value hedge 12/31/2017 12/31/2017 12/31/2016 12/31/2016(in € thousand) Currency or Nominal Market value Nominal Market value commodity value1 in € thousand value1 in € thousand

Cross-currency swapsForwards ........................................................................................................................................................................................................................RON...................................................Sale ..................................44,785 ............................................................47 ..................................42,200 ............................................................42 .............................................................................................................................................................................................................................................................................AUD...................................................Sale ..................................................N/A ....................................................................0 ...............................10,100 ....................................................132 ...............................................................................................................................................................................................................................................................................................................................................................Buy ..................................................N/A ....................................................................0 ....................................................700 ...........................................................(7).................................................................................................................................................................................................................................................................................TRY...................................................Sale ..................................................N/A ....................................................................0 ..................................10,000 ............................................................28 .................................................................................................................................................................................................................................................................................TRY......................................................Buy ..................................................N/A ...................................................N/A ..........................................6,000 ....................................................(17)..............................................................................................................................................................................................................................................................................USD...................................................Sale ..................................60,000 ..........................................1,313 ...............................40,300 ............................................(942)...............................................................................................................................................................................................................................................................................................................................................................Buy ..................................................N/A ...................................................N/A ..........................................1,159 ....................................................(41).............................................................................................................................................................................................................................................................................EUR......................................................Buy ............................................................53 ....................................................(14) ..........................................4,641 ............................................(701).............................................................................................................................................................................................................................................................................GBP......................................................Buy ..................................................N/A ...................................................N/A ..........................................3,201 ....................................................(29)............................................................................................................................................................................................................................................................................................................................................................Sale ..................................................N/A ...................................................N/A ..........................................6,400 ............................................................57 .............................................................................................................................................................................................................................................................................RUB...................................................Sale ..................................................N/A ....................................................................0 ...................................................................0 ............................................................21 ...............................................................................................................................................................................................................................................................................SEK......................................................Buy ..................................................N/A ...................................................N/A ....................................................149 ...........................................................(1)...............................................................................................................................................................................................................................................................................ZAR...................................................Sale ..................................26,484 ............................................(196) ..................................72,270 ............................................(345).............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,151 ...........................................................................................................(1,802)

1 Nominal values for currencies reported in thousands of Euros, commodities in metric tons of aluminum (AL)


Derivatives classified as held for trading do not meet the hedge accounting requirements under IAS 39. However, they are used to safeguard the business operations and are not held for speculative purposes.

The hedging periods are all based on the maturity of the hedged item. The terms of the currency derivatives ex-tend to 2019, commodity derivatives extend to 2019, and interest rate derivatives to 2022. The hedged cash flows will be due between 2018 and 2022. Where hedge ac-counting has been applied, fair value changes that were previously recognized in other comprehensive income are reclassified to the income statement.

Foreign currency hedges realized within the next year amount to €347 thousand, and expected long-term realizations amount to €40 thousand.

LME hedges realized within the next year amount to €5,186 thousand, and expected long-term realizations amount to €23 thousand.

DPP hedges realized within the next year amount to (€25) thousand and expected long-term realizations amount to €0 thousand.

Interest rate derivatives realized within the next year amount to €0, and expected long-term realizations amount to (€4,803) thousand. Interest rate caps realized within the next year amount to €0, and expected long-term realizations amount to €1,876 thousand.

The notional values are derived from the aggregate gross amount of all purchase and sale amounts of derivative fi-nancial transactions, and commodity derivatives are re-corded in metric tons in the transaction currency.

The fair values are derived from the amounts at which the financial transactions in question are traded on the reporting date. The fair values of commodity derivatives are based on official aluminum prices on the LME at the reporting date. The fair values of currency forward deriv-atives and interest rate derivatives are determined on the basis of market data at the reporting date. The fair value of interest rate derivatives is determined using generally recognized mathematical valuation models.


Additional disclosures on financial instruments pursuant to IFRS 7Carrying amounts, amounts recognized, and fair values by valuation category:

(in € thousand) Carrying amount Fair value Cash flow Held for Available Loans and Cash and Other 12/31/2017 hedge hedge trading for sale receivables cash receivables equivalents

AssetsOther non-current and financial assets .................................................281,693.......................................................0 ...................................................23 .................................1,934 ..................213,687 .........................62,103 ...........................................................0..................................3,946Trade accounts receivable .......................................................................................................152,220.......................................................0 ...........................................................0 ...........................................................0 ...........................................................0 .................152,220 ...........................................................0............................................................0Other receivables.....................................................................54,537..............................1,407 .................................5,852 ...........................................305 .................................6,696 .........................18,911 ...........................................................0..........................21,366Cash and cash equivalents ..........................................................................64,717.......................................................0 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................................0 .........................64,717............................................................0Total assets ......................................................................................553,167..............................1,407 ..................................5,875 ..................................2,239 ...................220,383 ...................233,234 ..........................64,717...........................25,311

Total per Fair value Cash flow Held for Available level hedge hedge trading for sale

Fair value hierarchy IFRS 13Level 1.....................................................................................................................212,232.......................................................0 ...........................................................0 ...........................................................0 ..................212,232 ...........................................................................................................................................................................................................

Level 2.............................................................................................................................10,825..............................1,407 .................................5,875 .................................2,239 .................................1,304 ...........................................................................................................................................................................................................

Level 3.....................................................................................................................................6,696.......................................................0 ...........................................................0 ...........................................................0 .................................6,696 ...........................................................................................................................................................................................................

Total ..................................................................................................................................229,753..............................1,407 ..................................5,875 ..................................2,239 ...................220,232 ...........................................................................................................................................................................................................


(in € thousand) Carrying amount Fair value Cash flow Held for Available Loans and Cash and Other 12/31/2016 hedge hedge trading for sale receivables cash receivables equivalents

AssetsOther non-current and financial assets ........................................................43,887.......................................................0 ............................................651 .................................1,760 .........................10,741 .........................16,212 ...........................................................0..........................14,524Trade accounts receivable .......................................................................................................242,363.......................................................0 ...........................................................0 ...........................................................0 ...........................................................0 .................242,363 ...........................................................0............................................................0Other receivables.....................................................................53,772........................................400 .................................4,539 ...........................................104 ...........................................................0 .........................24,460 ...........................................................0..........................24,268Cash and cash equivalents ...................................................................122,706.......................................................0 ...........................................................0 ...........................................................0 ...........................................................0 ...........................................................0 .................122,706............................................................0Total assets ......................................................................................462,728.........................................400 ..................................5,189 ..................................1,864 ..........................10,741 ...................283,035 ...................122,706...........................38,793

Total per Fair value Cash flow Held for Available level hedge hedge trading for sale

Fair value hierarchy IFRS 13Level 1.....................................................................................................................................1,083.......................................................0 ...........................................................0 ...........................................................0 .................................1,083 ...........................................................................................................................................................................................................

Level 2.....................................................................................................................................7,453........................................400 .................................5,189 .................................1,864 ...........................................................0 ...........................................................................................................................................................................................................

Level 3.....................................................................................................................................6,878.......................................................0 ...........................................................0 ...........................................................0 .................................6,878 ...........................................................................................................................................................................................................

Total .........................................................................................................................................15,415.........................................400 ..................................5,189 ..................................1,864 ..................................7,962 ...........................................................................................................................................................................................................


(in € thousand) Carrying amount Fair value Cash flow At FV Other Accrued 12/31/2017 hedge hedge through financial and other P&L liabilities¹ liabilities

LiabilitiesNon-current liabilities ...........................................................................................................................................................................565,490 ...........................................................0 .................................4,803 ...........................................................0 .................554,324..................................6,363Current liabilities .....................................................................................................................................................................................................104,022 ...........................................256 .................................2,007 ...................................................69 .........................46,614..........................55,076Trade accounts payable ...............................................................................................................................................................256,252 ...........................................................0 ...........................................................0 ...........................................................0 .................256,252............................................................0Total liabilities ...........................................................................................................................................................................................................925,764 ............................................256 ..................................6,809 ....................................................69 ...................857,190...........................61,440

Total per Fair value Cash flow At FV level hedge hedge through P&L

Fair value hierarchy IFRS 13Level 1..................................................................................................................................................................................................................................................................................................0 ...........................................................0 ...........................................................0 ...........................................................0 .......................................................................................................................................

Level 2........................................................................................................................................................................................................................................................................7,135 ...........................................256 .................................6,809 ...................................................69 .......................................................................................................................................

Level 3..................................................................................................................................................................................................................................................................................................0 ...........................................................0 ...........................................................0 ...........................................................0 .......................................................................................................................................

Total ....................................................................................................................................................................................................................................................................................7,135 ............................................256 ..................................6,809 ....................................................69 .......................................................................................................................................

1 The fair value of other financial liabilities is discussed below.


(in € thousand) Carrying amount Fair value Cash flow At FV Other Accrued 12/31/2016 hedge hedge through financial and other P&L liabilities¹ liabilities

LiabilitiesNon-current liabilities .................................................................................................................................................................1,304,297 ...........................................................0 .................................9,074 .................................9,055 .......1,276,912..................................9,256Current liabilities .....................................................................................................................................................................................................266,384 .................................2,202 .................................2,508 .........................15,908 .................172,933..........................72,834Trade accounts payable ...............................................................................................................................................................308,382 ...........................................................0 ...........................................................0 ...........................................................0 .................308,382............................................................0Total liabilities .................................................................................................................................................................................................1,879,063 ..................................2,202 ..........................11,582 ..........................24,963 ........1,758,227...........................82,090

Total per Fair value Cash flow At FV level hedge hedge through P&L

Fair value hierarchy IFRS 13Level 1..................................................................................................................................................................................................................................................................................................0 ...........................................................0 ...........................................................0 ...........................................................0 .......................................................................................................................................

Level 2.................................................................................................................................................................................................................................................................13,812 .................................2,202 .........................11,582 ...................................................29 .......................................................................................................................................

Level 3.................................................................................................................................................................................................................................................................24,934 ...........................................................0 ...........................................................0 .........................24,934 .......................................................................................................................................

Total ............................................................................................................................................................................................................................................................................38,747 ..................................2,202 ..........................11,582 ..........................24,963 ................................................................... ..................................................................

1 The fair value of other financial liabilities is discussed below.

Other receivables and liabilities are not financial instru-ments under IFRS 7. In order to ensure comparability with the balance sheet, they were included in the tables.

Other available-for-sale equity instruments for which there is no listed market price in an active market and whose fair value cannot be reliably determined are initially rec-ognized at cost plus transaction costs and are reported at the reporting date net of any impairment losses.

For trade receivables, other receivables, cash and cash equivalents, securities, and trade payables, as well as ac-crued and other liabilities, the carrying amounts are rea-sonable approximations of their fair values.

The carrying amount of other current and non-current financial liabilities is €600,938 thousand (2016: €1,449,845 thousand). The corresponding fair value (excluding finance leases, put options, and other liabilities) is calculated using the discounted cash flow method. The interest rate used is 3.02% (2016: 4.33%).

The carrying amount of the financial liabilities is a rea-sonable approximation of the fair value and amounts to €518,278 thousand (2016: €1,142,243 thousand). It includes a current portion of €18,041 thousand (2016: €22,916 thousand). The discount rate corresponds to the relevant country-specific interest rates for a corresponding credit rating and maturity. The fair values correspond to Level 2 of the fair value hierarchy.


The bond (AT0000A0V7Q0) was repaid on May 25, 2017. The principal amount of the security was €129,121 thou-sand. As of the December 31, 2016, reporting date, a carrying amount of €128,941 thousand was presented as current liabilities; the fair value (2016: €130,580 thou-sand) as per the Vienna Stock Exchange corresponds to Level 1 of the fair value hierarchy.

Fair value hedges, cash flow hedges, and financial instru-ments held for trading are classified as Level 2 because the fair values of these financial instruments are based on market-derived inputs.

Disclosures on the “Loans and receivables/payables” measurement categoryThe fair values of other non-current assets and financial assets and non-current liabilities represent the present value of payments associated with the assets or liabilities in consideration of the current interest rate inputs that re-flect market- and counterparty-related changes in condi-tions and expectations. The measurement categories of the fair value hierarchy are as follows:

Level 1: Fair values are determined based on publicly quoted market prices. Level 2: Fair values are estimated, based on the results of a valuation technique that uses the data from the market and is based on company-specific data as little as possible. Level 3: Fair value measurements are those that arise from models, using parameters for the valuation of assets or liabilities that are not based on observable market data (unobservable inputs, assumptions).

The fair values for Level 2 measurement of simple over-the-counter derivative financial instruments, available- for-sale financial assets, and liabilities held for trading are determined by reference to prices quoted by brokers. These quotations are tested for plausibility by discounting the expected future cash flows using market interest rates for similar instruments relevant at the measurement date.

The fair value reflects the credit risk of the instrument and includes adjustments to adequately consider the credit risk of the Group entity and the counterparty where appropriate.

The Group recognizes transfers between measurement levels at the end of the reporting period in which a reclas-sification occurs. In the 12 months of fiscal year 2017, there were no reclassifications between Level 1, Level 2, and Level 3.

Level 3 fair valuesThe Group has established a control system related to the measurement of fair value. In line with the control system, a measurement team has been nominated that reports di-rectly to the Chief Financial Officer, and which has overall responsibility for all significant fair value measurements, including Level 3 measurements.

The measurement team regularly reviews significant unobservable inputs and measurement adjustments. If third-party data such as broker quotes is used to measure fair value, the measurement team evaluates and docu-ments the evidence obtained from third parties and as-sesses whether these measurements are consistent with the IFRS requirements. This assessment includes the proper classification in the hierarchy.

Financial instruments at fair value through profit or loss include contingent selling prices. Contingent purchase prices are classified as available for sale. Details on the measurement of Level 3 fair values in the 12 months of fiscal year 2017 are shown in the following table.


Contingent purchase price and contingent selling priceThe contingent purchase prices result from the acqui-sitions of the Spear Group, the Pemara Group, and Oai Hung Manufacturing Joint Stock Company. The outflow by payment concerns the settlement of the contingent pur-chase price payment for Oai Hung Manufacturing Joint Stock Company and payment in connection with the ac-quisition of the Spear Group. The change from business disposals concerns the derecognition of the purchase

price liability of the Pemara Group due to the deconsolida-tion of the Labels Division.

The contingent selling price resulted from the sale of Aluprint Plegadizos in 2016.

Sensitivity analysisThe fair values correspond to the expected payments dis-counted to present value using a risk-adjusted interest rate. The inputs used and the sensitivities of the individual contingent purchase prices are as follows:

(in € thousand) Contingent consideration Aluprint Plegadizos

Base currency ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................MXNAnnual sales growth .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Unobservable input parameter used ....................................................................................................................................................................................................................................................................................................................................................................................................................................14.2% Effect from +0.5% points adjustment ........................................................................................................................................................................................................................................................................................................................................................................................................................................105 Effect from -0.5% points adjustment......................................................................................................................................................................................................................................................................................................................................................................................................................................(105)EBITDA margin ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Unobservable input parameter used ....................................................................................................................................................................................................................................................................................................................................................................................................................................14.3% Effect from +0.5% points adjustment ........................................................................................................................................................................................................................................................................................................................................................................................................................................842 Effect from -0.5% points adjustment......................................................................................................................................................................................................................................................................................................................................................................................................................................(842)

(in € thousand) Contingent consideration Contingent consideration (selling price) (purchase price)

Balance as of January 1, 2017 .......................................................................................................................................................................................................................................................................................................................................................6,878 ......................................................................................24,936Addition through acquisition ..................................................................................................................................................................................................................................................................................................................................................................................................0 ......................................................................................(8,126)Disposal through payment ............................................................................................................................................................................................................................................................................................................................................................................................................0 ..............................................................................(16,753)Total gains and losses for the period included in profit or loss: Net finance income and expense ..........................................................................................................................................................................................................................................................................................................................415 ........................................................................................................167 Currency translation differences .............................................................................................................................................................................................................................................................................................................(597) ................................................................................................(224)Balance as of December 31, 2017......................................................................................................................................................................................................................................................................................................................6,696 ........................................................................................................................0


The change in the “held for trading” category is mainly at-tributable to ineffectively hedged and traded financial in-struments.

The “cash flow hedge” category includes income and ex-penses from derivatives that serve to hedge operating and financial risks. Further details on the income and expenses are contained in Section I. Notes to the Consolidated In-come Statement, Note 1, Sales and Cost of Materials.

The expected payment from the sale of Aluprint Plega-dizos was calculated based on the forecast EBITDA and net debt. Management is responsible for the exercise date, which will be based on the 2017 figures.

If one or more of the significant unobservable inputs were to be replaced by reasonable possible alternatives, this would have the effects presented on the fair value of the

The effective fair value hedge of forward currency transactions in the amount of €2,988 thousand (2016: (€2,120) thousand) is partly offset by foreign exchange gains on loans.

The change in the “amortized cost” category is mainly due to the realized and unrealized gains and losses in the amount of (€2,295) thousand (2016: (€5,200) thousand) and the change in the allowance for doubtful debt in the amount of €1,647 thousand (2016: €41 thousand).

contingent consideration. These effects were calculated by replacing the underlying assumptions with alternative estimates of unobservable inputs that might reasonably have been applied by market participants when measuring the contingent consideration. It is assumed that interac-tions between the individual unobservable inputs have no significant impact on the range of reasonably possible al-ternative assumptions.

Net gains and losses on financial instruments by category:


Held for trading...............................................................................................................................................................................................................................................................................................................................................................................................................................................(331) ...............................................................................................(340)Cash flow hedge .......................................................................................................................................................................................................................................................................................................................................................................................................................................7,007 .....................................................................................(3,009)Fair value hedge .........................................................................................................................................................................................................................................................................................................................................................................................................................................2,988 .....................................................................................(2,120)Available for sale..............................................................................................................................................................................................................................................................................................................................................................................................................................(1,323) ..............................................................................................................(1)Loans and receivables/liabilities1

...............................................................................................................................................................................................................................................................................................................................................(839) .....................................................................................(5,234)......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................7,502 .............................................................................(10,703)

1 Measured at amortized cost


L. Contingent Liabilities/Receivables andContingencies

Contingent liabilities are not recognized in the consolidat-ed balance sheet, except in the case of contingent liabili-ties accounted for under IFRS 3. They are disclosed when the outflow of resources embodying economic benefits is possible, but the requirements for recognition of a provi-sion are not met.

A contingent asset is not recognized in the consolidated financial statements but is disclosed when an inflow of economic benefits is probable.

LitigationAll material litigation in the Constantia Flexibles Group is described in detail in Section H. Notes to the Consolidated Balance Sheet, Note 11, Material Litigation.

Environmental contaminationThe Constantia Flexibles Group is not aware of any significant environmental contamination at the balance sheet date that has a more than negligible probability of occurrence.

Other

The bank guarantees received relate mainly to a building deposit, customs guarantees, and gas purchase commit-ments.

In addition, Constantia Flexibles Holding GmbH has is-sued a guarantee of €20 million in favor of Bank BNP Fortis to secure a loan of Parikh Packaging Pvt. Ltd.

M. Related Party DisclosuresThe ultimate controlling company of Constantia Flexibles Holding GmbH is Wendel S.E., which is based in Paris, France. The consolidated financial statements are pub-lished at the Commercial Court in Paris, France.

All business transactions between the companies within the Group and related entities and individuals have been conducted at an arm’s length basis.

A loan of €0 thousand (2016: €400 thousand) to the Management Board was outstanding at the end of the reporting period. A loan with a payment of €400 thousand was repaid during the fiscal year (2016: €135 thousand). The interest rate was 1%.

No other material transactions of any kind, in particular contracts for the sale of significant assets, were entered into.

The key management personnel of Constantia Flexibles were awarded the following compensation in 2017:


Discounted bank drafts .....................................................................................................................................................................................................................................................................................................................................................................................................................12 .......................................................................................................................3Bank guarantees received .............................................................................................................................................................................................................................................................................................................................................................................................913 .......................................................................................................291.................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................925 ........................................................................................................294


Performance-based compensation currently amounts to an average of 50% of total compensation and is linked to the achievement of certain key performance figures. The earnings targets are specified as part of a multi-year bud-get. The exemption provision of Section 266 No. 7 of the Austrian Commercial Code (Unternehmensgesetzbuch, UGB) is exercised.

A consulting agreement was entered into with a mem-ber of the Management Board in 2016. It commences on the day after the termination of the employment relation-ship, for a period of 2 years, with the right to terminate the agreement after the expiration of 12 months and in com-pliance with the notice period. The consulting activities are compensated on the basis of a flat fee per consulting day, for at least 65 consulting days per year.

In addition, there is a D&O liability insurance for the mem-bers of the Management Board of Constantia Flexibles

Holding GmbH. The premium amounts to €56 thousand (2016: €75 thousand).

Since 2013, occupational pension provisions for the mem-bers of the Management Board have been made via con-tribution-based insurance plans, for which the Company carries no obligation to make additional contributions. In addition, there are also performance-based insurance plans.

The Supervisory Board of the Group is located at Constantia Flexibles Holding GmbH. The costs of the Supervisory Board amounted to €1,299 thousand (2016: €1,430 thousand) in fiscal year 2017.

Supply and service relationships with the Group holding companies in fiscal year 2017:

(in € million) 2017 2016

Share-based payments ...................................................................................................................................................................................................................................................................................................................................................................................................................0.9 .............................................................................................................0.0Current due payments ........................................................................................................................................................................................................................................................................................................................................................................................................................5.0 .............................................................................................................8.2Benefits for termination of contract ................................................................................................................................................................................................................................................................................................................................................0.4 ....................................................................................................(1.3)Post-employment benefits ..................................................................................................................................................................................................................................................................................................................................................................................................0.1 .............................................................................................................0.2.....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................6.4 .............................................................................................................7.1

(in € thousand) Received (+) Receivables Payables and completed (-)

Winvest Conseil........................................................................................................................................................................................................................................................................................................................................................2,656 ..................................................................................................................................................................................2,109Constantia Lux Parent S.A. .....................................................................................................................................................................................................................................................................................................................3 ....................................................................................................................................................................................................................

.................................................................................................................................................................................................................................................................................................................................................................................................................................................2,659 ..............................................................................................0 .........................................................................2,109


N. Auditors’ Fees

Pursuant to Section 238 No. 18 of the Austrian Commercial Code (Unternehmensgesetzbuch, UGB), audit fees due in the reporting year are reported in the consolidated financial statements of Wendel Group S.E.

Supply and service relationships with Group holding companies in fiscal year 2016:

(in € thousand) Received (+) Receivables Payables and completed (-)

Winvest Conseil...............................................................................................................................................................................................................................................................................................................................................(2,650) ..................................................................................................................................................................................2,157 Trief Corporation S.A. ...................................................................................................................................................................................................................................................................................................................................(20) .................................................................................................................................................................................................................... Constantia Coinvestco ...............................................................................................................................................................................................................................................................................................................................................................................................................................................15 .......................................................................................................... Constantia Lux Parent S.A. ...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1,500 .........................................................................................................................................................................................................................................................................................................................................................................................................................................(2,670) ..........................................................................................15 .........................................................................3,657


O. Group Entities

Interest in % Interest in %Name Location directly* indirectly** Consolidated

Constantia Flexibles GmbH .............................................................................................................................................................................................................................................................Vienna, A .....................................................................................................................100.00 .........................................................................100.00Constantia Flexibles Beteiligungs GmbH ............................................................................................................................................................................................................Vienna, A .....................................................................................................................100.00 .........................................................................100.00 Constantia Flexibles Group GmbH ............................................................................................................................................................................................................Vienna, A .....................................................................................................................100.00 .........................................................................100.00 Constantia Flexibles International GmbH ..................................................................................................................................................................Vienna, A .....................................................................................................................100.00 .........................................................................100.00 Constantia Flexibles DMCC ....................................................................................................................................................................................................Dubai, UAE ............................................................................................................100.00 .........................................................................100.00 Constantia Flexibles Sales B.V. ........................................................................................................................................................................................Gameren, NL ...................................................................................................100.00 .........................................................................100.00 Constantia St. Petersburg OOO ....................................................................................................................................................................................St. Petersburg, RUS .............................................................................99.90 ...............................................................................99.90 Afripack Holdings Pty. Ltd............................................................................................................................................................................................................Mobeni, ZA ..................................................................................................................95.00 ...............................................................................95.00 Afripack International ................................................................................................................................................................................................................................Pailles, MU .............................................................................................................100.00 ...............................................................................95.00 Afriflex East Africa Ltd. ....................................................................................................................................................................................................Embakasi, KE .................................................................................................100.00 ...............................................................................95.00 Standard Labels Ltd. ..............................................................................................................................................................................................................Pailles, MU .............................................................................................................100.00 ...............................................................................95.00 Afripack Consumer Flexibles Pty. Ltd. ...........................................................................................................................................................Mobeni, ZA ..................................................................................................................74.00 ...............................................................................70.30 Bag and Pouch Converters Pty. Ltd. ..............................................................................................................................................Muizenberg, ZA ................................................................................................75.50 ...............................................................................53.08 Afripack Pty. Ltd. ....................................................................................................................................................................................................................................................Durban, ZA ..................................................................................................................74.00 ...............................................................................70.30 Constantia Teich GmbH ......................................................................................................................................................................................................................Weinburg, A .........................................................................................................100.00 .........................................................................100.00 Constantia Flexibles Poland Holding Sp. z o.o. ..................................................................................................Krakow, PL ............................................................................................................100.00 .........................................................................100.00 Constantia ColorCap Sp. z o.o. .....................................................................................................................................................................Jejkowice, PL .................................................................................................100.00 .........................................................................100.00 Constantia Verpackungen Deutschland GmbH ...............................................................................................Wangen im Allgäu, D ...................................................................100.00 .........................................................................100.00 Constantia Aloform GmbH ....................................................................................................................................................................................Werdohl, D ..............................................................................................................100.00 .........................................................................100.00 Constantia Imballaggi SRL ...................................................................................................................................................................................Schio, I ...............................................................................................................................100.00 .........................................................................100.00 Constantia Alucap s.r.l. .................................................................................................................................................................................Borgo Valsugana, I .............................................................................100.00 .........................................................................100.00 Constantia Emballage France SARL...........................................................................................................................................Versailles, F ..........................................................................................................100.00 .........................................................................100.00 Corona Packaging ApS .................................................................................................................................................................................................. Ishoej, DK .................................................................................................................100.00 .........................................................................100.00 Constantia Sittingbourne Ltd. ...................................................................................................................................................Sittingbourne, GB ................................................................................100.00 .........................................................................100.00 Constantia Jeanne d’Arc SAS ........................................................................................................................................................................Joinville, F .................................................................................................................100.00 .........................................................................100.00 Constantia Flexibles Sales AB .....................................................................................................................................................................Stockholm, S .....................................................................................................100.00 .........................................................................100.00 Constantia Flexibles Sales Ltd. ..................................................................................................................................................................Girvan, GB...............................................................................................................100.00 .........................................................................100.00 Constantia Tobepal S.L.U. .........................................................................................................................................................................................Logroño, E...............................................................................................................100.00 .........................................................................100.00 Constantia Oai Hung Manufacturing Joint Stock Company...................... Ho Chi Minh City, VN ........................................................................51.00 ...............................................................................51.00 Constantia San Prospero S.r.l. ..................................................................................................................................................San Prospero s/S, I .........................................................................100.00 .........................................................................100.00 Asas Ambalaj A.S. .........................................................................................................................................................................................................................Ankara, TR ..............................................................................................................100.00 .........................................................................100.00 Constantia Flexibles Bucuresti S.R.L. ................................................................................................................... Budesti, RO .........................................................................................................100.00 .........................................................................100.00 Constantia Flexibles Sales GmbH ......................................................................................................................................................Vienna, A .....................................................................................................................100.00 .........................................................................100.00 Constantia Patz Ges.m.b.H. ...................................................................................................................................................................................Natschbach-Loipersbach, A ......................................100.00 .........................................................................100.00 Constantia Teich Poland Sp. z o.o. .......................................................................................................................................................Kleszczów, PL ................................................................................................100.00 .........................................................................100.00 CJSC Constantia Kuban .............................................................................................................................................................................................Timashevsk, RUS..................................................................................100.00 .........................................................................100.00


Interest in % Interest in %Name Location directly* indirectly**

Constantia Hueck Folien GmbH & Co KG ....................................................................................................................Pirk, D .................................................................................................................................100.00 .........................................................................100.00 HC Beteiligungs GmbH ...........................................................................................................................................................................Pirk, D .................................................................................................................................100.00 .........................................................................100.00 Constantia Louvain BVBA ............................................................................................................................................ Louvain-La-Neuve, B ..................................................................100.00 .........................................................................100.00 Constantia Flexibles Sales s.r.o ....................................................................................................................... Marianske Lazne, CZ ..................................................................100.00 .........................................................................100.00 Constantia Hueck Folien Geschäftsführungs GmbH .......................................................................Pirk, D .................................................................................................................................100.00 .........................................................................100.00 Constantia Flexibles America Co...............................................................................................................................................................................Blythewood, USA ..................................................................................100.00 .........................................................................100.00 Constantia Blythewood LLC ..............................................................................................................................................................................Blythewood, USA ..................................................................................100.00 .........................................................................100.00 Constantia Colmar LLC ..................................................................................................................................................................................................Colmar, USA ......................................................................................................100.00 .........................................................................100.00 Constantia Flexibles Sales LLC.................................................................................................................................................................Barrington, USA .......................................................................................100.00 .........................................................................100.00 GPC Holdings Coöperatif UA .............................................................................................................................................................................................Amsterdam, NL .........................................................................................100.00 .........................................................................100.00 GPC Holdings BV .........................................................................................................................................................................................................................Amsterdam, NL .........................................................................................100.00 .........................................................................100.00 Aluprint S de R.L. de C.V. .......................................................................................................................................................................San Luis Potosí, MX ......................................................................100.00 .........................................................................100.00 Global Packaging USA Corp. .....................................................................................................................................................Miami, USA ...........................................................................................................100.00 .........................................................................100.00 Parikh Packaging Pvt. Ltd. .................................................................................................................................................................Ahmedabad, IN.................................................................................................75.00 ...............................................................................75.00 Parikh Flexibles Private Ltd. ..................................................................................................................................... Ahmedabad, IN ..........................................................................................100.00 ...............................................................................75.00 Constantia Flexibles Germany GmbH............................................................................................................................................................Frankfurt, D ..........................................................................................................100.00 .........................................................................100.00 Constantia Business Service GmbH .......................................................................................................................Pirk, D .................................................................................................................................100.00 .........................................................................100.00 Constantia Fromm GmbH ...................................................................................................................................................................Remshalden-Geradstetten, D ...............................100.00 .........................................................................100.00 Constantia Nusser GmbH .............................................................................................................................................Wangen im Allgäu, D ...................................................................100.00 .........................................................................100.00 Constantia Ebert GmbH ..................................................................................................................................................... Wiesbaden, D ..................................................................................................100.00 .........................................................................100.00 Constantia Finance Holding GmbH ..........................................................................................................................................................................................Vienna A .......................................................................................................................100.00 .........................................................................100.00 Constantia Business Service Austria GmbH ................................................................................................................................Weinburg, A .........................................................................................................100.00 .........................................................................100.00 Eveku Österreich GmbH ........................................................................................................................................................................................................................................Vienna, A .....................................................................................................................100.00 .........................................................................100.00 Eveku Spain SL........................................................................................................................................................................................................................................................Madrid, E .....................................................................................................................100.00 .........................................................................100.00 Eveku Deutschland GmbH..........................................................................................................................................................................................................Hann. Münden, D ..................................................................................100.00 .........................................................................100.00 Eveku Netherlands BV ..........................................................................................................................................................................................................................Amsterdam, NL .........................................................................................100.00 .........................................................................100.00 Eveku Belgium SPRL ..............................................................................................................................................................................................................................Liege, B ..........................................................................................................................100.00 .........................................................................100.00

* From the perspective of direct parent companies** From the perspective of Constantia Flexibles Holding GmbH


For the Management BoardVienna, April 4, 2018


Stephan KühneChief Financial Offi cer

P. Other Disclosures

Events after the end of the reporting periodFinal purchase price calculation for the sale ofthe Labels Division approvedConstantia Flexibles successfully completed the sale of its Labels Division to Multi-Color Corporation at the end of October for an enterprise value of around €1.15 billion. The final purchase price formula has been prepared and both parties have accepted this calculation.

Increase in production capacity in IndiaConstantia Flexibles invested a double-digit million euro amount in the expansion of capacity of its Indian subsidi-ary, Parikh Packaging in Ahmedabad, Gujarat. The ground-breaking ceremony took place in mid-2017 at a newlocation near Parikh Packaging’s existing plant.

Increase in interest in Parikh Packaging in IndiaIn 2018, Constantia Flexibles increased the interest inits Indian subsidiary, Parikh Packaging in Ahmedabad,Gujarat, from 75% to 100%.

Acquisition of Creative Polypack Ltd. in IndiaIn March 2018, Constantia Flexibles resolved to buyCreative Polypack Ltd. in India. This will further expand the market position of the Constantia Flexibles Group in the Indian market. Subject to the approval by the responsible competition authorities, the acquisition will be completed in the coming weeks. The parties have agreed to keep the financial details of the transaction confidential.

Governing bodies of the Constantia Flexibles GroupThe following people were active in the reporting period:

a. On the Management BoardAlexander BaumgartnerStephan Kühne

b. On the Supervisory Board Frederic Lemoine, Chairman (until 10/1/2017)Bernard Jean-Pierre Gautier, Deputy Chairman(until 10/1/2017), Chairman as of 10/2/2017Roland Lienau, memberAlbrecht von Alvensleben, member (until 4/28/2017)Patrick Tanguy, memberJan Homan, memberWolfgang Pfarl, memberUlrich Köstlin, member (until 10/1/2017),Deputy Chairman as of 10/2/2017Mathias Hlubek, memberFelix Treptow, member (as of 4/28/2017)José Vargas López, member (as of 7/20/2017)


Auditor’s Report / IFRS Consolidated Financial Statements Constantia Flexibles_119

Auditor’s Report

Report on the Consolidated Financial Statements

Audit OpinionWe have audited the consolidated financial statements of Constantia Flexibles Holding GmbH, Vienna, and its subsidiaries (the Group), which comprise the consolidated balance sheet as at December 31, 2017, the separate consolidated income statement, the consolidated state-ment of comprehensive income, the consolidated state-ment of cash flows and the consolidated statement of changes in equity for the fiscal year then ended, and the notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements comply with legal requirements and give a true and fair view of the financial position of the Group as at December 31, 2017, and of its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards (IFRSs) as adopted by the EU and the additional requirements under Section 245a Austrian Commercial Code.

Basis for OpinionWe conducted our audit in accordance with Austrian generally accepted auditing standards. Those standards require the application of the International Standards on Auditing (ISAs). Our responsibilities under those provi-sions and standards are further described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements” section of our report. We are independent of the Group in accordance with Austrian Generally Accept-ed Accounting Principles and professional requirements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appro-priate to provide a basis for our opinion.

Responsibilities of Management and the Supervisory BoardManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Stand-ards (IFRSs) as adopted by the EU, and the additional re-quirements under Section 245a UGB, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, manage-ment is responsible for assessing the Group’s ability to con-tinue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liqui-date the Group or to cease operations, or has no realistic alternative but to do so.

The supervisory board is responsible for overseeing the Group’s financial reporting process. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accord-ance with Austrian generally accepted auditing standards, which require the application of ISAs, will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Austrian generally accepted auditing standards, which require the application of ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit.

We also:

• identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risks of not detecting a material misstate-ment resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, inten-tional omissions, misrepresentations, or the override of internal control.

120_Constantia Flexibles IFRS Consolidated Financial Statements / Auditor’s Report

This report is a translation of the original report in German, which is solely valid. Publication and sharing with third parties of the consolidated financial statements together with our auditor’s opinion is only allowed if the consolidated financial statements and the management report for the Group are identical with the German audited version. This audit opinion is only applicable to the German and complete consolidated financial statements with the management report for the Group. For deviating versions, the provisions of Section 281 (2) UGB apply.

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncer-tainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated fi-nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activ-ities within the Group to express an opinion on the con-solidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Comments on the Management Report for the GroupPursuant to the Austrian Commercial Code, the manage-ment report for the Group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the management report for the Group was prepared in accordance with the applicable legal requirements.

Management is responsible for the preparation of the management report for the Group in accordance with the Austrian Commercial Code.

We conducted our audit in accordance with Austrian Standards on Auditing for the audit of the management report for the Group.

OpinionIn our opinion, the management report for the Group was prepared in accordance with the applicable legal require-ments and is consistent with the consolidated financial statements.

StatementBased on the findings during the audit of the consolidated financial statements and due to the obtained understand-ing concerning the Group and its circumstances no mate-rial misstatements in the management report for the Group came to our attention.

PwC Wirtschaftsprüfung GmbHVienna, April 4, 2018

Horst BerneggerAustrian Certified Public Accountant

Imprint

PublisherConstantia Flexibles Group GmbHRivergate, Handelskai 921200 ViennaAustriaT +43 1 888 56 40 1000F +43 1 888 56 40 [email protected] FN 332189 pVienna Commercial Court

ContactGroup CommunicationsDaniel Smith, Head of Group Communications

ConsultingGrayling Austria GmbHDirk Moser-Delarami, Ute Greutter

DesignBrainds, Marken und Design GmbH

DisclaimerThis annual report was prepared with due care, and all information contained therein was reviewed. Rounding,typographical, and printing errors may nevertheless appear. The annual report contains information and forecastsbased on the future performance of the ConstantiaFlexibles Group. The forecasts present estimates based on all available information at the time the annual report was published. Should the assumptions underlying the forecasts turn out to be wrong, actual results may vary.This annual report is available in English and German.In case of discrepancies, the German text is binding.

Imprint / IFRS Consolidated Financial Statements Constantia Flexibles_121


www.cflex.com

financial report 2017 people passion packaging

Documents