However, at
the end of the call, you will have the opportunity to ask to register your question via the phone lines at any time. I'm now handing over to your host, Michel Gianuzzi, CEO, to begin today's conference. Thank you.
Thank you. Good morning, everyone, and thank you very much for attending this call. I will be sharing this presentation today with Nathalie Debrugh, Group CFO, and I'm very pleased to be able to report to you our 2020 financial performance. First of all, I hope that you and your relatives are in good health, and I wish you to stay healthy going forward. So the first part of the agenda is about the highlights of the year.
And as a reminder, just would like to remind you the global positioning of Veralia. Veralia is the Glass Packaging leader in Europe, and Europe represents about 90% of our sales in 2020. We are number 2 in Latin America, and Latin America represents 10% of our sales, and we are number 3 in the world. If you look on the left hand side of this chart, you see that we have a very diversified end market segments exposure. And market segments exposure.
Of course, Tier 1 is still the number one Product category for Veradia, given our historical strong presence in the 3 largest wine producing countries in the world, Italy, France and Spain. But beyond the Still Wine segment, you see that it's very well Spread in the other segments with good exposure to all these markets, which has enabled us to, of course, benefit from some more dynamically oriented markets last year rather than and thus suffering from the poor performance last year. In terms of number of furnaces, As we speak today, this has changed compared to last year. We did have 57 furnaces that you remember. As of today, we are pleased to report to you that we are starting the 2 new furnaces that have been built 2 years ago and we were put on hold last year due to the pandemic, 1 in Spain and 1 in Italy.
And We have also, as you know very well, decided not to reconstruct 1 furnace in France due to excess capacity we had in France. And therefore, today, we operate in the company with 58 furnaces in the group. These are still in the 32 plants we have. And in addition to these 32 glass plants, we have 3 decoration plants and 8 cullet recycling centers, which are very important for Our sustainable strategy. Moving forward, if you look at the shareholder structure as of end of December 2020, You just remind you that during December, there has been a significant share in the ownership of the company with Horizon Investment Holdings, owned by Apollo, selling around 10% of the shares to BWSA.
And now you've seen the split between the main shareholders of the company with a strong increase of Brazier, the warrant and interest in Diben, E. M. Plesa, BWSC, our Brazilian investor in the company, who has Clearly declared that we are a long term investor alongside the management in this company. We were also pleased to see that Standard and Poor's I upgraded 2 notches the company in December, and we are now rated BB plus by Eastern Alarm Post With a stable outlook. And given the also the change in the capital structure of the company, in the shareholder structure of the company, I would say, The Board has slightly changed also with Apollo leaving 1 Board membership to BWSA, And we welcomed Marcia Fritas on behalf of BWSE last year.
Last but not least, I have to mention that Sylvain Artigault As beginning of the year this year, he decided to resign from his mandate, and we will be organizing for the year another election in France to elect a new employee representative. So altogether, the Board members are 12 in total with 2 non voting observers and 5 independent board members. And each of the committees, the Audit Committee, the Appointment and Nomination Committee And the Steenburgh Committee are all chaired by independent chairwoman. Moving forward, I would like also to remind you that last year was an important year for Verhaia because during that year, we redefined or redefined Our corporate purpose, which you can read here, we want to reimagine glass for a sustainable future, and this is really clearly embedded In our strategy and in everything we do in the company, this has led us on the 21st January to present To you and to all the general audiences, our commitments to the sustainable development goals of the United Nations, which in our company we have decided to focus on 3 main pillars. The first one is to enhance the circularity of glass Packaging.
The 2nd pillar is to significantly reduce our CO2 emissions across our operations. And the 3rd pillar Is to provide a safe and inclusive place of work. We have detailed in the presentation, which is available on the website, a lot more What it means for us in terms of concrete action plans and strategies and targets, but I would just like to highlight a few slides from this presentation. The first one, I remind you that glass is a beautiful material. It's a healthy material and infinitely recyclable material.
And it's a perfect material for the secular economy because we can recycle it forever. And not only it's good because we avoid depleting the planet from Natural and Rural Resources, but we also, by doing so, can save a lot of energy and also reduce significantly our emissions. Every time we can increase our COLETE usage rate, COLETE is named for the used glass, by 10 points, We can reduce our CO2 emissions by 5% and our energy consumption by 2.5%. So not only is good for the planet, it's also good for the P and L. And therefore, this pillar is very key for us to achieving our long term sustainable goals, especially in terms of CO2 emissions Because as you can see on this chart, we have built a very strong roadmap To achieve 27.5 percent CO2 emissions reduction By 2,030, which is the target defined by or with SBTI, Science Based Target Initiative, In order to comply with the well below 2 degrees temperature increase agreed at the COP 21.
This means for Veralia in scope 12 reduction of 850,000 tons of CO2 in absolute value between 2019 2030. And our roadmap basically is focusing on 3 main areas. The first area is to improve the emissions of CO2 or to reduce emissions of CO2 by using more current and more Less CO2 Emitted Raw Materials, and this contributes about to 1 third of the improvement. The second Peter is the zone area is to be more efficient with our processes. You know that the furnace We operate our running at around 1500 degrees C, and therefore, we are doing a lot of things to Optimize the energy consumption and therefore the CO2 emissions reductions for these operations.
And the first pillar is to move towards greener energy and want to move from 20% green energy we have today to 60% by 2,030. This is, of course, just a resume of what we presented on 21st January, And this will require also some investments we've quantified and you can see here how it will be split throughout the years in the next 10 years. This will represent an additional EUR 220,000,000 investment to be able to manage and achieve this very ambitious goal of CO2 Reduction. Last but not least on this topic, we are very pleased That not only Ecovadis with the new referential has confirmed our gold rating, which is putting Virea in the top 5% companies. But for the first time, because last year was the first time, We presented our results to CDP, the Carbon Disclosure Project, and we were rated A minus, Which I think for first approach is quite a significant achievement.
And as I mentioned before, we also worked with sales based target Chetif in order to define our goals for 2,030. Last but not least, we partnered also with Ellen MacArthur Foundation In order to work together to promote the circular economy in our industry. And you can see here the other partnerships we have. So this is very important for us to now focus on the deployment of our roadmap Moving to just one example of what we are trying to do to promote a more inclusive base work. There are many initiatives about Safety about the work of handicapped people in the company, but one area of which we are very proud of This is how we share the benefits and the growth and the profitable growth of this company with our employees.
I have to say that Over the period 2016, 2020, sorry, over 5 years, we went from 0% Employee ownership to 3.2 percent employee ownership in the company. And last year, like the 4 previous years, We offered to 80% of our employees the opportunity to invest in the company, buying shares. And altogether, we had a 42% participation rate to this program last year, 80% in France, which is quite remarkable. And this means that as of today, 37% of our employees are shareholders of this company. We chose the trust of employees in our company and in our strategy.
And as such, we have been rewarded by the fast Grand Prix for our practice focusing on developing the employee ownership program. And as we committed to at the IPO time, we will keep proposing in the years to come the same programs or similar programs to our employees To favor employee ownership and one program will be, of course, implemented in the coming months. So all these are important highlights of last year, and I think a lot have happened last year. And this has, of course, translated also into financial Results, which we are very proud to mention to you. First of all, the net sales reporting net sales dropped by 1.9% Actually, but at constant exchange rate and scope, the organic growth was 2.1%, which I think you can appreciate is showing the resilience of our company despite the pandemic.
Our EBITDA kept improving at EUR626,000,000 for the year last year Compared to if you remember EUR 650,000,000 the year before, this means an EBITDA margin Of 24.7 percent for 2020 compared to 23.8% in 2019. So again, the 90 basis points improvement in EVA margin despite the pandemic, which I think the team is very pleased to report to you. As such, the net income drastically improved From EUR 125,000,000 in 2019 to EUR 210,000,000 last year, You remember that last year, we had sorry, the year before in 2019, we had quite a lot of one off Expenses due to the IPO and the refinancing of the group debt and the fact that also that our debt has significantly been reduced throughout the year I'd help us reduce our financial expenses. The earnings per share It's now €0.67 per share compared to €1 the year before. And this includes a negative impact of EUR 0.37 due to the amortization Of the customer relationship that was booked at the time of the acquisition of the Glass Packaging division of Saint Gobain in 2015, which is a pure accounting, I would say, impact.
The net debt last year has also very strongly improved To €1,279,000,000 at the end of the year, which means a 2 times leverage, which is really at the low end of our range, our targeted range. Remember, it was between 2 and 3 times, thanks to very strong cash flow generation last year that I will let Nathalie comment in a few minutes. As such, we will propose to the Shareholder General Assembly in June to pay a dividend of €0.95 per share compared to EUR 0.85 a year before, and it will be proposed to pay the dividend all in cash. Last but not least, given the strong performance last year, we are very Confident on the fact that we will be achieving our midterm objectives, not in 2022 as initially planned at IPO time, But as of 2021, including the strong deployment of our EAG roadmap That was presented a month ago. This being said now, I will move to I will add the floor to Nathalie Delbrecht, who will go through the financial results presentation.
Thank you, Michel, and thank you very much to all of you for joining this call. It will be my pleasure to walk you through our 2020 financial results. I will split my presentation in 3 parts. We'll be first looking at the revenue numbers, then the EBITDA and profitability per segment and finally, CapEx and cash So moving to the positive the growth slide, You can see that we posted turnover of €2,536,000,000 With the reported growth negative, minus 1.9%, but in fact, opening growth has been positive Throughout 2020, which is, as Michel mentioned, showing really the resilience of the group. Volumes have been very erratic throughout the years.
The second quarter especially was showing very Significantly down volumes due to the 1st lockdown and the start of the pandemic. But then we've seen a good recovery in the second of the year, especially in the Q3, as we already commented with the September results. Throughout the year, in fact, in our product, sparkling wines and spirits have been the 2 categories really suffering, But food yields on the other side have been increasing and steadily throughout the year. Price increases have been supporting the growth of the sales and compensated our cost Inflation, as you will I will show you later. And talking about the mix, we have seen a negative impact of the Panini in the 1st semester, But recovery in the second half of the year, so overall throughout the year, it's basically flat.
Now the last pillar that you can see on this chart is the foreign exchange rates contributing significantly negatively Minus 4.1 percent and it is mainly driven from LatAm currencies. In Brazil, the currency As affected by 40% from the beginning of the year to the end, and we suffer from that mainly in LatAm. Now moving to geographical segments. South and West Europe Has been resisting quite well. So posting a slight decrease in sales, minus 0.5 And slight volume decreased as well, but Italy has been very resilient and could support this segment.
So, FuJobs were quite strong throughout the region. In the beer segment, we've seen a stable H1 and then Given some good performance in the second half. And talking about wine, in France, we have negative Evolution in the wine volumes, but it has been good well compensated in Italy and Iberia. So here we really benefit from our geographical footprint that is well balanced in Europe and could mitigate the negative impact of And in fact here in this segment, France is the country affected the most. And here we have the negative impact Of the premium and sparkling and spirits, which I already commented on top of it.
In North Europe and Eastern Europe, here we have a negative impact of the foreign exchange rates, which we didn't see, of In the South and West Europe, the Ukraine, Crimea and Russian ruble devaluated also during the year. But except for that, we have also a slightly positive organic growth, plus 0.4. We could see that rulings were down and in older countries, but it was well offset by selling price increases And mainly in Eastern Europe. And here in this segment, FUJAR's as well behaved well, Not enough to fully compensate the volume drop in sales in other categories. In Latin America, Latin America has shown really strong organic growth throughout the year.
Look at this quite impressive number, Plus 23.4%. So the market in all the three countries has been very dynamic, is still very dynamic. We've seen volume expansions in all the countries, and volume performance have been very good in wine, in spirits as well. We have been able to increase selling price throughout the year. And we mentioned particularly Argentina, As you well know, with the high inflation in the country, it's absolutely key to follow cost inflation in prices.
And You will see in our spread that is what we managed to do in the year. Then unfortunately, the headwinds from exchange rates, But still a very good and dynamic market. So now moving to profitability And adjusted EBITDA. You will see in the presentation, in the next slide, we will go through segments. On the top right, you have the adjusted EBITDA And you will see that we improved the margin percentage at group level, but also in all the segments, Which is a very good achievement.
So now if you remember, the bridge, the EBITDA bridge is Showing you how our pillars deliver EBITDA. So the first one is the activity one, very negative this year With a minus €51,300,000 here we have the full effect of the volume decrease of the market decrease we just commented And also, adverse impact of inventory variation, we've been destocking this year More than last year, much more than last year, and this has a negative impact that you can see here. The spread and price mix cost pillar, as you see, has been very positive, very contributive to our profitability. So prices have been increased well throughout the year. We've been benefiting from that All the year.
And as I mentioned, the mix, in fact, was negative at the beginning in the first half, But we covered well, including improvement in premium segment in the 2nd part of the year. So this is adding up To this very positive pillar that you can see here. The third one, the net productivity is very important. You know this is our in our strategy to reduce our production cash cost by an average of The target is 2% improvement per year. And as you can see here, we've been able to deliver more with 2.2%.
This is Really an achievement in a year with such disruptions close to the pandemic. So we are really proud of this Achievement, you can see how contributive it is to our profitability. So EUR 36,000,000 net contribution. The exchange rates, we you can see, unfortunately, minus EUR 36,500,000, Mainly LatAm currencies, but also in Eastern Europe, as I already commented. And to bridge the gap in the other, you can see a It's mainly our COVID-nineteen direct some incremental cost and also some Positive impact as a compensation.
So this EBITDA performance per segment, In South and West Europe, we have you can see that we improved the percentage from 23.5% to 24% Despite the panini. On the positive spread has been positive. We have delivered a good industrial performance. I was mentioning our PAP program, but then we had some negative impact in volumes. Here in this segment, the mix did not fully recover.
We have the exposure in France to quite premium segments. So we've seen improvements, but not back to the 0 that we can see at group level. So here mix is still contributing slightly And then the situation specifically in France has been quite difficult in 2020. So the reduction in sales, even if JAS managed to compensate slightly Demicks, I mentioned. And also social disturbances linked to the transformation plan That is now carried out and impacting as well industrial performance.
In North and Eastern Europe, here as well on the right, you can see improvement of our adjusted EBITDA margin By 0.8 points. The margin improvement is due to positive spread and productivity. So really, these pillars Are the 2 ones which managed to compensate the activity impact throughout the group last year. And I mentioned already the negative impact that you can see here for the ForEx. So all in all, the improvement in the adjusted EBITDA, excluding that impact, is 4.6%.
Moving to Latin America, really outstanding performance. There is no other word. You can see 29.8 percent margin in 2019, up to 33.8% in 2020, A remarkable margin expansion and really the three levels our three drivers delivered fully. We've seen that the market It has been dynamic. We were there to catch the growth.
And the price mix spread, everything has been positive here. We mentioned already the price increase is well monitored. And the production action plan Is Performance Action Plan is really contributing strongly to our EBITDA in Latin America is one of the segments That is overachieving our 2% target. Moving now to CapEx and cash. So investments are quite significant in our business.
So Very important to show and to prove that we keep them under control. You can see on this chart that recurring CapEx Stays in the 8% of sales range that is our strategy and our target. So in 2020, it was fully achieved. And we had strategic investments that impact our Over the 2 years, you have the Villa Puma and Azukeka investments, capacity investments, which are the CapEx has been over the 2 years. And the start up of these 2 new furnaces in Italy, 1 in Italy and one in Spain, Has been voluntarily delayed to the Q1 2021 to adjust our capacity To last year's market.
So how did that translate into cash flow generation? On this chart, you can see that adjusted EBITDA overall ended up €10,000,000 above 2019, So contributing positively to our operating cash flow, CapEx kept under control at a stable level. So that means a cash conversion of 60% in 2020. Then change in operating working capital contributed Very positively, as you can see, with €67,000,000 So to comment here, Stock levels stock has been reduced significantly during this year. I mentioned already the EBITDA impact.
It is contributing very positively on our cash. This is quite specific to 2020. We ended the year at Extremely low level of stock, so 2021 will not see the same trend here. And important comment on overdues. We managed to keep our reviews at very exactly the same level as 2019 in amount Pat.
So operating cash flow ended at €400,000,000 To be compared to EUR 400,000,000,000 in 2019. So all in all, our net debt has been significantly reduced in 2020, Thanks to this operating cash flow we've seen. Thanks to also reduction in some non operating cash outs. As Michel mentioned, we had IPO specific cash out in 2019. And also, Let's not forget that in 2020, the dividends cash out has been €30,000,000 because we allowed You know, we some dividend has been given as shares.
So out of the total of EUR 100,000,000, only EUR 13,000,000 I have been a cash out in 2020. So the leverage is 2.04 to be very precise And the deleveraging of EUR 0.6 so as a conclusion is very good, but with some specifics of 2020. And liquidity at the end of the year reached €1,000,000,000 €80,000,000 Which is at a very good level and very comfortable level.
Thank you very much, Nathalie. So let's now conclude and give some perspectives about next year. First of all, as you can understand, we are very pleased to report These numbers to all of you, which have shown the strong resilience of our company last year. First of all, I have to recognize and we will the tribute from our teams and engagement from our teams throughout the year, which made it possible. This is also the result of the strong Health measures that we took as soon as the pandemic started to protect our teams and keep improving Both health and safety conditions at our plants and operations.
We, in a nutshell, are pleased to report Positive organic growth of 2.1 percent and an increased EBITDA up to the level of 24.7% for the year. The net income also significantly improved to €210,000,000 with an earning per share at €1.67 And as the conclusion, we will propose to the General and Shareholder Assembly dividend per share of EUR 0.95 in all in cash. If we look forward for this year, 2021, We had a slight volume drop last year, a bit less than 2% drop last year. We will recover this volume Vischel, therefore going back to 2019 volume level. And of course, this will lead also to positive organic growth.
Although on the sales side, we expect sales prices to be more or less flat given the fact that the costs Inflation, of course, in our industry has been more or less flat or slightly negative in some cases last year. The goal for us still is to have a positive contribution of spread to the improvement of EBITDA year after year. We are aiming at EBITDA of around €650,000,000 for the year, which will provide more than 25% EBITDA margin, which was the goal for 2022, so we'll be 1 year ahead of our goal. And as you understood from Nathalie's comments, I mean, we have a very strong market in Latin America and more specifically in Brazil. We are sold out despite the new factory we built 2 years ago in We are now sold out in Brazil, and therefore, we decided to build a second furnace in our Jack Cutinga factory in Brazil, which will represent a strategic investment of around €60,000,000 to be spread over 2 years between this year and next year.
So altogether, we are as the of course, the hotels, cafes and restaurants will progressively We opened in many countries as people get more and more vaccinated. We are hoping that the worst is behind us. And as you can see for Veraya, last year was not such a worst year. And going forward, We have a positive outlook on the future growth of the company and the continuous improvement of EBITDA margin of this company, allowing Vireya to achieve its midterm target 1 year ahead of the goal, which means in 2021, we Shall reach all our targets except, of course, the organic growth target that has been abandoned already a year ago. So this being said, now we are very pleased to end up this presentation and take your questions through the Q and A session.
Hye. This is your operator. Please ensure that your line remains unmuted locally. You will then be prompted when to ask your question. Our first question via the phone lines comes from Matthijs Seyssenberter from Deutsche Bank.
Matthijs, you are now unmuted. Please go ahead.
Hey, good morning, Nathalie, Alexandre and Michel. Congrats to the results and thanks for taking my questions. The first one is really on the pricing dynamic. Now as I've heard for 2020, you raised prices. That's what Nathalie said.
I think you're doing it at the beginning of the year and then the energy costs obviously deflated. And now this Here you're seeing flat prices, but energy prices recovered. Is that just basically saying for you it hasn't changed? Energy prices Last year, they are coming back now to these levels and pricing, therefore, can remain stable. Is that how to think about it?
Okay, Matthias, thanks for the question. Clearly, first of all, you remember that We have a very strict hedging policy that was implemented now 3 years ago, which basically Covers all energy costs at October period time October period, sorry, October time, we cover The next year energy costs through our hedging policy. Therefore, what happened during last year, which is the fact that The spot price of energy has dropped during the year. Frankly speaking, we didn't benefit. And on the opposite, We have aged in October 2020 the energy cost for 2021.
Therefore, should the energy price keep going up In 2021, we will not suffer from that. So that's just an important reminder for everyone to understand. And this hedging policy that we've implemented 3 years ago is the one that allows us to give precise Price increase targets to our salespeople in order to cover for the inflation of costs. The good news last year is in 2020, you know that mostly in Europe, it's not the case in Latin America where prices are negotiated On a HADOC basis, which means very often, up to every month in Argentina, for example. But in Europe, usually, the prices are negotiated once a year.
And the good news is that when the pandemic arose last year, Price most negotiations were completed and there has been no renegotiations throughout the year. So our customers and our competitors and our sales, We all stuck to our agreements and therefore, a precedent move. Now Moving forward, for 2021, taking your comments, it's true that we have In some countries, the real deflation of energy costs and therefore, in some countries, this could even lead to slight price decreases whilst still maintaining a positive spread. In other countries, it's Not the case. In other countries, we still have an inflation of cost, and therefore, some price increases will be made.
Altogether, we guess that it will be prices will be more or less stable in 2021 compared to 2020, Even if and still maintaining, sorry, positive spread despite stable prices.
Okay. Thanks a lot. The second question is basically on current trading, especially on the premium stuff, champagne, spirits. And then also whether you stand on FX in terms of year to date versus 2020 average? Thanks.
Okay. So I will answer the question about the premium trend. As you've seen in our comments As you heard from Nathalie's comments, the mix impact was quite negative in the first half of last year And as we covered in the second half of the year, meaning that for the full year, our mix impact was more or less neutral. There has been no Significant throughout the year on a full year basis, change in mix. However, if we look, of course, in more details, What happened last year is the 2 segments that have been the most severely impacted by the drop of volume have been spirits and in Sparkling Wine, these are the 2 products that you are usually used for celebrating parties and other events, but Last year was not very eventful.
Unfortunately, they have been less consumed by the market. Therefore and these are usually segments in which you have quite a significant share, especially in the spirits segment, significant share Of Premium Products. As you can read from our customers already comments, some of our customers' comments in the spirits industry, This year, positive ARPU for 2021 with a progressive recovery starting with China and Asia, which was, if you remember last year, quite the first country very strongly impacted by the low consumption of spirits And a progressive recovery in this area. So on the spirit side, we should see some recovery and some improvements. The champagne this year, which is a small part of our business, but a very important and profitable part of our business, We'll still be in a difficult situation, the 2nd year in a row.
I remind you that last year, champagne dropped by 18%. And this year, we expect Champagne to drop high single digit. But the spirits and the other sparkling wines Should recover and therefore we don't expect for the full year negative mix impact at company level.
Okay. Thanks a lot. And lastly
For the Clorics, I can answer. I'm sorry. You had the question. So In fact, the main impact is for us is coming from LatAm, as we said, The conversion impact, I would say, and average BRL translation conversion rate financial rate In 2020, it was EUR 6,300,000,000 to be compared to EUR 4,500,000,000 in 2029, Tina. So quite a significant devaluation.
In our outlook for 2021, we hope we are cautious on this translation impact. As for today, I would say that the currency is behaving more is more stable. And we hope that we think that we have been cautious enough in our 2021 outlook. Then one comment On other foreign exchange exposure, don't forget that it's pretty limited. We have local flows, in fact.
And when we have specific exposure, for example, linked to CapEx, we do hedge to limit this impact. So the foreign exchange is really conversion of our financial statements.
Okay. Thanks a lot. I'll get back in line. Thanks.
Thank you, Matias.
Our next question comes from the line of Francisco Ruiz from Exane. Francisco, you are now unmuted. Please go ahead.
Hi, good morning and congratulations for the great numbers. I have two questions. The first one is on the outlook. Mainly, if we take into account that the PAP will continue And could I add something like €30,000,000 And as you have said, I mean, you do not expect any negative price cost contribution and probably Some positive contribution from volumes. I think that this 650, It is conservative unless you think a very strong headwind in terms of FX.
The second question It's on the dividend that clearly this is above your the target that you mentioned on the IPO to do Or 40% or €100,000,000 But given the good performance of the debt in 2020, Do you expect that this dividend could be increased during the year or even at a higher pace in 2022?
Okay. Thank you, Francisco, for your questions. First point, I think you perfectly well understood our Position regarding the outlook for 2021, and your math is correct. So therefore, if we do more than €30,000,000 of PAP, which is our goal, as you know, Every year to generate more than €30,000,000 of net savings and with, I would say, flat spread or 0 plus spread And a slight growth, we should be above €650,000,000 indeed. However, as you have mentioned, the last 2 years, we have Been hit by negative headwinds coming from the ForEx.
And it's still very Difficult to forecast, but if we look at what the market consensus is about exchange rates, unfortunately, we might still this year face Negative headwinds on the FX side. So this is the one thing that we will, of course, monitor very carefully. And you can monitor as well as we do, because this is not under our control. So that's the reason why we guide, if you want, towards €650,000,000 and not more. Of course, as the ForEx situation clarifies for the year, we'll probably be able to Maybe adjust our forecast.
No, regarding the silicon point sorry?
Michel, could you give us an idea of what's the impact on FX that you are assuming on And
the outlook? Well, you know that, I mean, 10% of our business is in Latin America. And as Nathalie said, it's Purely translation impact. It's not a transaction impact, it's translation impact. Therefore, If let's say together, I mean, if the all the currencies in Latin America dropped by 10%, That's a one point of the NVIDIA impact for the company.
So it's quite meaningful. It's just a lot of transparent year Pat, so and 10% shift in exchange rates in both countries is not a big number, by the way. Of course, excluding Argentina, which is in hyperinflation, this is more if you look at what Brazil currency, the Brazilian real I divested last year. We are talking about 33% devaluation last year of the Brazilian real. So 10% It's as good as anything.
I'm not I don't have a crystal ball tell you what would be the exchange rates, but it's plausible. I mean, it's Unfortunately, it's possible. Now of course, if we are, for the 1st year, not impacted by H and G, we'll be more than happy to So what I can do is your math is correct and I confirm the PAP target of at least EUR 30,000,000 sales. Okay. Regarding the dividend, this is true that with €0.95 per share, This represents a payout ratio close to 55%, above the 40%.
But if you remember, when we guided at AQtime, we said that The 40% was a minimum and the €100,000,000 of dividend was also a minimum. It was a floor in both cases. So What happened is given the huge cash flow generation of last year, given the fact that we've reached the low end of our Leverage target, which is 2 times EBITDA, we thought it was appropriate to start increasing The dividend by EUR0.10 per share. And going forward, this still leaves us Enough and sufficient room for looking for acquisitions. So let's be clear, this has always been our Our strategy is to we could increase, of course, a lot more of the dividend to the shareholders, but We want to leave some room for acquisitions should there be any opportunity during the year.
And of course, if at the end of the year, we find that We see that to match cash, we will keep saying keep doing what we've said, which is basically return the cash to the shareholders. But today, it's Too early to say what will be during the future in terms of dividend policy.
Okay, very clear. Thank you very much.
Our next question comes from the line of Lars Kjellberg from Credit Suisse. Lars, you are now unmuted. Please go ahead.
Thank you. Just wanted to focus in a bit on the final quarter performance, which were clearly above Certainly, we had modeled and I guess market expectations. You had called out accelerated furnace activity and potentially Longer stops. But as you alluded to in your prepared remarks, clearly, stocks are very low. So I suspect production exceeded your own expectations, if you want to comment on that.
And also if you can walk us through how you think about furnace rebale Cycles and the activity in 2021, clearly, you had a bias towards the second half in twenty twenty. See if you can walk us through how that should work through the system. And the last question I have Would be on CapEx. Of course, you have your sustainable CapEx, part of which is strategic, You now have the new plant in Yacatinga and then the maintenance, I suppose, still around the 8% mark. But if you can share any color on how you how we should think about CapEx in totality in those various buckets in 2021, please.
Okay. So comments on the quarter 4 and how we explained the over performance. So first, let's remember then when we last published and when we made the outlook for the year, It was in October. And just the day before or after, our President Announced the 2nd lockdown. So it was again quite an uncertain period, if you remember, after A very strong and quite back to normal summer, at least in Europe.
We were again in quite uncertain times. So the first comment we can make on the Q4 versus our outlook at the time is that we have yes, we were better First in sales volumes, the market has been better than expected. Also, the mix that we had in our Outlook was conservative, still negative. And in fact, as I commented, the mix did recover To back to normal overall or back to 2019 overall throughout the year, and it was also in Q4. And then one area which contributed much more than expected is LatAm.
Latin America, we did not Such a dynamic market, good very high profitability. And also, again, the currencies The FX impact was less negative. The devaluation we mentioned for the year was less acute in the 4th Quota. So that is in a nutshell what we can comment. And For the furnace rebuilds, so in the second quarter in the second half of twenty twenty, we had 6 Finance reveals shutdowns for rebuilds.
And in 2020 so in 2020, it was basically out of the 7, we have Almost every year, 6 were in S2 in the 2nd semester in 2020. And in 2021, we won't have the Pat. Same pattern, as most of the rebuilds will be in S1 and even in Q1. So we will have a very different shape this year.
And still around the 7 Furnace Rebuild.
Yes. Yes, totally. Yes, exactly.
We'll have 7 furnaces as last year, this year. Pat, again, the seasonality is changing every year based on the condition of the furnace, then also on the suppliers that are Intervening to help us repair and rebuild the Astellasies. Last year, there was a strong workload In the second half of the year, this year, the first half of the year will be the most loaded part because we will have 5 furnaces repaired in H1 in first half And 2 in the sum of our figures. So regarding your question about CapEx, so clearly, the guidance of 8% recurring CapEx It's still valid and as you've seen last year, very well respected. On the top of this, you have to add strategic CapEx.
In the past, the strategic CapEx were the Azucheca and gliapoma services, the 2 brownfields in Italy and Spain. There is for this year and next year a new strategic CapEx with the 2nd furnace in Jacutinga for about EUR 60,000,000 over the 2 years period. And you need to add to the strategic CapEx, the CapEx that we presented in the on the 21st January, which are related to the transition towards a greener company, I would say, with less CO2 emissions. And we've provided a kind of visual split Year by year of this CapEx, and you can see that every year it's around €20,000,000 to 25,000,000 Euro of CapEx altogether is EUR 220,000,000 over 10 years. So this is what you can look at.
And this CO2 related CapEx will be clearly isolated As strategic CapEx as well.
Right. So strategic CapEx, that's around EUR 50,000,000 mark then, probably speaking. Is that fair?
Sorry, say it again, please last.
About EUR 50,000,000 in strategic CapEx, including CO2 related investments In 2020
Yes, well, the CO2 will be not every year the same because some of these investments are linked to Furnace repairs and furnace reconstructions, and they will be not evenly spread out for the year. By the way, altogether in terms of cash CapEx, you are closer to EUR 180,000,000 rather than EUR 220,000,000 because So the difference could be considered as a partnership with some suppliers. So therefore, There are no CapEx that will be borne by Veraya, but by our partners. But for Veraya, you're talking about around EUR 180,000,000 of cash out or cash weighted CapEx. And you see that in 2021, we are talking about Around €15,000,000 2022 will be much higher, around €28,000,000 So that's why I'm indicating It's around €20,000,000 per year on a regular basis.
Thank you.
Our next question comes from the line of Scotty Charles from Kepler. Scotty, you are now unmuted. Please go ahead.
Yes. Good morning, everyone. I have three questions. The first one on the profitability target. You are on track to reach a 25% margin as of 2021.
So basically, what's the next step for you? Any reasons why And you should not be able to fully catch up with Vidal. The second question on the new furnace in Jacut India. What's the size of the new furnace and how much additional capacities it will bring in 2022. And also overall, including the start up of Azulqueca and Vila Poma, What should we expect in terms of additional production capacity in 2021?
And finally, it seems that you Who ended up the year with a very low level of stock at your level. So it means that you will sell on Production in 2021. So should we expect the profitability on incremental volumes to be in the high end of the historical range? Thank you.
Okay. So regarding the first question on profitability, I mean, clearly, We will have to give ourselves a new target based on our 3 levers, organic growth, Positive spread and regular Performance Action Plans improvements, we Don't see any limit right now for us to not to reach at some point in time the level of margin that Our direct competitor in Europe, Beddala, has. So clearly, we will communicate probably Later during the year, some midterm objectives after having had our strategic reviews internally. But yes, there is no reason there is no fundamental reason why we should not be able as a company to reach this level of margin. Regarding the 2nd furnace in Jacutinga, it's an average size furnace, around 100 square meters furnace, Which will provide around again 100,000 tons per year of extra capacity on the market.
And the second question is in Europe, what happens? So we are starting as we speak The 2 brownfields that have been invested in the last 2 years in Viacoma and Eszwica, so in Spain and Italy. And we will enjoy with these 2 furnaces on an annual basis. Again, more or less the same amount of if If you take an average furnace, it's around 100,000 tons per furnace on average. So on an annual basis, we have 2 new furnaces of 2x100,000 tons minus the furnace we stopped in cognac.
So all net net, all in, The capacity increase for Veraya is only, if I can say so, 1,000 tons on a fully on a full annual basis. So and this is to be compared with the European market of glass, just to have some numbers in mind, of 20,000,000 tons. So basically, the additional capacity of the Hialeah is very minimum compared to the size of the market. Your last question About inventory, you want to answer this one, Nathalie?
Yes. So inventory, You are right. We end the year 2020 with quite low inventory. So As you said, we will sell mainly on stock in 2021. We also need to rebuild Inventory.
And we will sorry, sell on production, excuse me, my mistake. We will sell on production and we need also to come back to better levels of inventory and we have The additional capacity we just mentioned to support that. Then in the beginning of the year, we are still in the ramp up of these facilities, Which means that some extra fixed costs are not fully covered for the ramp up. So that is important to say that we will not be At full speed right from
the start.
Thank you very much. Our next question comes from the line of Jean Francois Gragnon from ODDO. Jean Francois, you are now unmuted. Please go ahead.
Yes, good morning. The first question concerns the organic growth. Could you give us more color for the What you expect for the organic growth in 2021, if I understood, as you expect higher volume, What about price mix? And due to the probably negative FX impact, do you expect Growth for the global sales in 2021 compared to 2020. My second question concerns the EBITDA guidance.
So the strategy improvement expected by more than €650,000,000 We're coming from more volume or from more spread price mix impact. And my third question concerns the CapEx. We're taking into account the recurring CapEx, the new investment for the new furnace In Brazil and the CO2 Investment, could we integrate an average, I would say €250,000,000 CapEx program for each year. Thank you.
Okay, Jean Francois. Good morning. Thank you very much for your questions. Regarding the revenue growth this year in 2021, We expect to recover the less than 2% volume drop of last year, which means volume wise, it's around 2% growth that we expect You see, this year, as indicated, prices will be more or less flat. So not except in Latin America, where, of course, we have So much more inflation in the countries, but in Europe, which is 90% of our business, prices will be more or less flat.
And mix should be slightly positive, but again, you are not talking about huge numbers. So we expect price and mix to be Slightly favorable, but without the same positive impact as the one we had last year. And as you said and we commented before With Francisco, we still have a big unknown, which is the exchange rate impact That we will face that we believe will still be quite negative, but probably not as negative as it was last year. And regarding the EBITDA improvement, again, same pillars. We have the volume contribution To help improve the EBITDA, spread should be slightly positive.
That's the goal, but not as strong as last year as we indicated before. And you can count on the €30,000,000 plus productivity coming from the Performance Action Plan next year, With still the negative impact of exchange rate due to the translation of Financial statements in Latin America, especially and a little bit of Eastern Europe into Europe.
So for the CapEx, indeed, we intend to keep the 8% recurring, so that is for sure. And so as we target to basically go back to 2019 level in sales In 2021, that is our outlook. And then on top of that, we have the Investment, which we mentioned that will be spread over the 2 years. So that is EUR 30,000,000 And in average and then the CO2 investments. So indeed, yes, if you do the math like that, The €50,000,000 at least for the next 2 years are quite possible even if there will be some timing for sure.
The EUR 250,000,000 are quite okay for 2021 and 2022.
Okay. Thank you very much.
Our final question comes from the line of Fraser Donlon from Berenberg. Fraser. You are now unmuted. Please go ahead.
Yes. Hi, Michel and Nathalie. Just three questions from my side. So the first would be if you could maybe talk a bit more about France and maybe in very approximate terms how the margin there is looking versus the rest Southwestern Europe and whether you feel like you performed in line with the market in 2020 or whether you some of the lower Operator in Iberia, in particular, might have taken some share. The second question would just be on the carbon Costs, and what does that mean for the glass industry in Europe in general?
I know it's a fact of rural operators, but do you see any risk of Imports from regions outside of the EU ETF scheme. And the final question is just On the discipline of competitors in terms of visibility on capacity additions into 2021, do you think that your peers will remain sensible as we head into An inflationary cost climate where you probably will need to look to increase prices again into 2022 perhaps.
Okay. Thank you very much, Fraser, for your questions. First of all, if we zoom on France situation, As you probably understood from the previous calls and presentations we made, in the Southwest Europe segment, France is the lagging country out of the 3 countries four countries there. It's possible Spain, Italy and France. France is, in terms of margin, behind the other three countries.
So it's still an opportunity for us to improve. And we don't know for yet because the statistics are not yet available about the French market last year. We don't know if we gain or won or lost market share. And by the way, that's not a driver for us and we've never been driven by market share, as I Before, but clearly, with the difficult year last year linked to the transformation plan that took place, We believe that we are now in a much better situation in 2021 and going forward with a much more leaner, Nutrient footprint, Nutrient footprint in France and a slightly more competitive cost base as well. So we are pleased not pleased because at the other day it was difficult to implement.
It was, of course, Socially difficult, although out of the 150 jobs that are positioned that have been eliminated in the 7 French factories, Only one factory had to go through the 4th dismissal. And at the end, out of the 1 or 2 jobs that have eliminated, only 20 people had to leave the company, I was forced to leave the company and the company has taken the commitment to support these people until such time they find Job close to their working place living place. So this is now Behind us, this plan is over and it's been implemented. The last letters have been sent out this week. And therefore, France is now in a much better position, I would say, to regain the competitiveness that and to catch up with the other countries That was necessary.
Regarding the second question on CO2, as you've seen, the CO2 cost I will go up to €40 per ton now. Again, let's remind you that we've Also very clearly indicated our hedging policy in terms of CO2 coverage. We are fully covered for this year. We were hedged a long time ago on 2021. We have covered 75% of our shortfall of CO2 quota for 2022 in Europe, and we have covered 25 sorry, 50% of 2023 shortfall already.
So our hedging policy has proven to be quite useful. And should, of course, CO2 keep increasing, I am sure the whole industry will Pass this inflation cost to the customers through the annual negotiations as we've done in the past, Passing the final cost, inflation cost to the customers. And personally, I think it's not a bad thing that CO2 increases because it helps us justify The investments that we are making to move away from some technologies that are not as efficient As the most modern technology that we can have on the market in terms of production Emissions related to production. Regarding your first question, It is clear that the market, if you remember, before the pandemic, the market in Europe was short of capacity, and this is what led the IRR to build both to the new furnaces in Italy and Spain. That was quite different from one country to the other.
Of course, France, we was on the same situation. We didn't have Shortage of capacity, just the opposite for Varian. However, many of our competitors, from what we understood from the public statements Pat. I've also decided to postpone or delay, in some cases maybe even withdraw Some future investments that as the market I think recovers and the volume go back to the 2019 levels Or above, the market will have to be served with new capacities coming from the area or others. Pat.
That's nice to accompany this growth in the market. So we don't see a lot of projects Right now, but surely as the market, I repeat, strengthens and grows again, You should expect some capacity increases in the future, which is normal and which is expected.
Allow me to take the opportunity of your question, Fraser, to enlighten you on some cash patterns for 2021. You were Mentioning the France situation and also CO2 and carbon costs. Have in mind that in 2021, so the cash out of the transformation plan in France is for 2021. We are Looking about 15 around €15,000,000 And also with our hedging strategy and the end of the Phase III on the CO2 quotas, We have a specific cash out this year, so in 2021 of €28,000,000 for this that we didn't have in the previous year.
Very clear. Thanks to both of you.
And in the cash pattern, sorry, to be fully complete Dividends, just to focus again, I mentioned that we did not cash out all the dividends in 2020, only 13 out of the 100 total. And now the dividend we will propose to the shareholders meeting, we intend to have it cash.
Which is an amount of EUR 117,000,000 altogether.
I can confirm that we have no further questions in the queue. So I will pass the call back to your hosts.
Okay. Well, thank you all for attending this call this morning. I wish you all to stay in good health, And I look forward to talking to you very soon in the various opportunities that we will have. Thank you very much, and I wish you a good day.
Thank you. Goodbye. And have
a good day. Thank you
for joining today's call. You may now disconnect your handsets.