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Vidrala (BME:VID) Has Some Way To Go To Become A Multi-Bagger

Simply Wall St · 2d ago

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. That's why when we briefly looked at Vidrala's (BME:VID) ROCE trend, we were pretty happy with what we saw.

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Understanding Return On Capital Employed (ROCE)

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. To calculate this metric for Vidrala, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.17 = €321m ÷ (€2.3b - €441m) (Based on the trailing twelve months to June 2025).

So, Vidrala has an ROCE of 17%. In absolute terms, that's a satisfactory return, but compared to the Packaging industry average of 9.1% it's much better.

See our latest analysis for Vidrala

roce
BME:VID Return on Capital Employed December 13th 2025

Above you can see how the current ROCE for Vidrala compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Vidrala for free.

What Does the ROCE Trend For Vidrala Tell Us?

While the current returns on capital are decent, they haven't changed much. Over the past five years, ROCE has remained relatively flat at around 17% and the business has deployed 77% more capital into its operations. 17% is a pretty standard return, and it provides some comfort knowing that Vidrala has consistently earned this amount. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns.

The Bottom Line On Vidrala's ROCE

In the end, Vidrala has proven its ability to adequately reinvest capital at good rates of return. However, over the last five years, the stock has only delivered a 27% return to shareholders who held over that period. So to determine if Vidrala is a multi-bagger going forward, we'd suggest digging deeper into the company's other fundamentals.

Vidrala could be trading at an attractive price in other respects, so you might find our free intrinsic value estimation for VID on our platform quite valuable.

While Vidrala isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.