In summary, Sidel made considerable progress during 2016. For all of us in the Sidel Group the biggest highlight was the improved performance we can see coming out of the comprehensive and often tough change process we are taking ourselves through. Of course, a fundamental element in this process is the continued dialogue and success we have had with our customers worldwide. Understanding and delivering the performance they need every day in their operations has become a key focus in our organisation.
For me personally, 2016 was my first year as CEO and President. In addition to my interactions with customers, a second highlight was meeting so many of my new colleagues. I remain consistently impressed by their expertise and passion. On all sites, in all teams, people have a very clear passion for what we do, and a passion for continued success. In this context, I would like to thank my colleagues throughout the organisation for all their work during the year.
Last year was important also because we updated our group strategy, aimed at delivering superior performance over the lifetime of our customers’ investments, leading to profitable growth for ourselves. We have captured this in a new commitment for our group, to deliver Performance through Understanding. By thoroughly understanding our customers’ products, markets and value chains, we can tailor our solutions through a combination of technology, services and expertise, ensuring long-term success.
The financial development for 2016 is satisfactory, particularly in the context of the group being engaged in some significant organisational changes. Net sales increased by 1.7 per cent to €1.4 billion, achieved during a significant slowdown in the Chinese market. Order intake increased by 3.6 per cent, compared to the previous year. We recorded order intake growth in Europe and Central Asia, Latin America and the Greater Middle East and Africa regions, while Greater China and Asia moved at a slower pace due to reduced market growth in our target businesses in those geographies. Profitability improved in our three business units – Sidel, Gebo Cermex and Novembal – mainly due to our efforts to lower costs.
Novembal, offering a full range of caps and closures to the liquid packaging industry, continued its positive development during the year. In 2016, the opening of a new plant in Peoria, Arizona, U.S, added a third facility to Novembal’s production footprint, improving our logistics within the North American market.
Bottled water remains the most important beverage category for our business. We also saw a continued need for investments in the CSD category, even though consumption growth overall remains modest. However, consumption of juices, nectars, soft drinks, isotonics and teas is growing, giving us the opportunity to benefit from our aseptic and barrier technologies. Our technologies also gives opportunities in liquid dairy products (LDP), where our customers’ needs for innovation create new business. In addition, we increasingly give our attention to home and personal care categories, where PET in particular is more and more becoming an attractive option for the industry.
Another clear trend representing a common theme in all the market segments we serve is the digital revolution. Digital innovations are encouraging consumers to partly think and act outside traditional retailing formats. As a result, our customers are looking for ways to harness the power of digital experiences as well as data management, both for their products and their packaging lines. In production, robust reliable operations become supported by digital development, strengthening our focus on smart automation that simplifies the reality on our customers’ factory floors.
We have strengthened and optimised our complete line offerings, backed-up and complemented by our services portfolio, to deliver customers what they need most: lifetime competitive performance. There is a clear trend towards customers increasingly buying our offering of complete line solutions. It is a logical choice since it simplifies the customers’ reality from purchasing, installation and commissioning and, most importantly, throughout the operational lifetime. In the Sidel Group we can count on two brands globally renowned for their respective expertise in the packaging industry: Sidel and Gebo Cermex. Combining their strengths, our group is able to act as a full solution partner to help any customer choose the right solution for the specific needs of any liquid product.
Last year one of our major launches was the Sidel Matrix Predis™, in which Sidel’s industry-leading Predis aseptic technology became available for the company’s latest generation of modular Sidel Matrix™ Combi equipment. In addition, we also introduced two notable PET packaging design innovations in 2016, building on the benefits of our existing Star- Lite™ bottle base.
Just as importantly, we are helping our customers reap the benefits of digitalisation in services. With the introduction of the new Sidel Services Online web interface, higher line performance and maximum uptime are just one click away. This tool has been recently enriched with new features, such as line improvement options and upgrades.
Looking ahead, we don’t foresee any major changes to the packaging market in 2017. It will continue to be highly competitive, where focus on innovation and costs will be key for success.
Our customers want the ability to produce their products as reliably and consistently as possible, with the lowest overall total cost and the right product quality. Our immediate goal will be to bring all the innovative technologies on which we are currently working to market, complete and on schedule, thus continuing the good work we have carried out so far.
One of the highlights for us in 2017 will be our appearance at the Drinktec exhibition in Munich in September. This is a tremendous opportunity to showcase our latest developments across the group. We are looking forward to meeting our customers there, and elsewhere globally throughout 2017, and start showing them the value of achieving Performance through Understanding.