“Our performance last year demonstrates that our Group is well-positioned to deal with present market conditions. We have a product mix that makes us less vulnerable to cyclical shifts in the global economy.”

​​​​​​​​​​​​​​​​​​​​Creative ways to grow in an uncertain world ​

​The Tetra Laval Group delivered a solid overall performance in 2015 despite contractions in markets, for instance in China, Russia and Brazil. The Group found new ways to grow such as new product formats and technical services for improved customer productivity. Net sales increased by 6 per cent compared to 2014 to € 14,305 million. The weaker Euro relative to other currencies, for example the US dollar, impacted our sales positively. The operating profit improved but on comparable rates was at a similar level to last year due to currency effects. Cash flow was also stable compared to 2014. From a geographical point of view, the Tetra Laval Group had a positive sales development in North America across all industry groups, while markets like China, Russia and Brazil slowed down, affecting Group sales negatively. The Group developed favourably in India, while the Middle East, partly due to geopolitical reasons, developed less favourably. In this context I would like to take the opportunity to express my gratitude for all the outstanding achievements by our skilful co-workers during the year.

TETRA PAK IMPROVED IN SEVERAL WAYS

Tetra Pak delivered a small growth – net sales increased by just over 7 per cent compared to previous year. Excluding currency effects, net sales grew by 1 per cent. The industry group made important progress in several aspects. They improved the carton business by 4.32 billion and reached 184 billion packages. A substantial part of this improvement was attributable to advanced formats, which are attractive features to customers. Technical services, both within Packaging Solutions and Processing Solutions, displayed an impressive growth of about 7 and 10 per cent, respectively. Sales of capital equipment in both areas fell slightly to a more normal level after the record year of 2014. Tetra Pak took important initiatives to refurbish and upgrade customer equipment, which contributed to improved sales.

A TOUGH MARKET FOR SIDEL

Net sales at Sidel increased by 1 per cent, mainly due to the the lower demand for capital equipment. Excluding currency effects, net sales improved slightly by 3 per cent. Sidel has been very successful in establishing a strong market presence in China, with a substantial part of it’s sales originating from Chinese operations, inspite of a downturn in the Chinese market. However, during the year Sidel’s service business developed favourably in China, while sales of new equipment were more difficult.
Sidel continued to roll out the Sidel Matrix™ modular packaging system with positive reactions from their customers. It also devoted a lot of effort into product development with a new high-speed streamlined machine based on the modular Matrix platform. Prototypes have been set up and market launch is expected to take place within the coming year.
Sidel also launched a restructuring programme and a new and more functionally oriented organisation with fewer management levels and clearer accountabilities. These initiative will enable very substantial cost savings over the coming few years. The new structure will also empower Sidel’s employees worldwide and ensure that customers have faster access to Sidel’s global PET expertise and unrivalled local market knowledge. At the beginning of 2016 Sam Strömerstén commenced as the new CEO succeeding Mart
Tiismann who is leaving after eight years as head of Sidel. Sam and his colleagues in the management team are implementing the structural and organisational changes and a the same time improving the offer of complete line solutions for future growth.

MIXED DEVELOPMENT FOR DELAVAL

DeLaval’s net sales increased by less than 1 per cent compared to the previous year. This was mainly due to a lower demand for capital equipment fuelled by the uncertainty of the European CAP (Common Agricultural Policy) reform. Excluding currency effects, net sales decreased by 3 per cent. Since farmers do not know what to expect from future milk prices, many have postponed investments in dairy equipment. In addition, developments in Russia – which has prohibited import of certain goods – contributed to lower sales for DeLaval. But despite the economic downturn in China, Chinese customers continued to buy DeLaval equipment. They prioritise high-quality and durable equipment, possibly as a result of the efforts to improve food safety in China. DeLaval also increased its market presence by building a new plant in Tianjin, which was inaugurated during the year.

CUSTOMER AND SALES FOCUS IN OUR ROOTS

In times of economic uncertainty, the Group has managed to find new innovative ways to improve growth. Customer and sales focus is in the roots of the Group. The focus is helping customers to grow their businesses and be more productive. And there are many examples of this today. Tetra Pak’s metallised coating on the outside of packages are attractive for many customers, and help them to sell more of their products. Sidel’s Predis™, a revolutionary dry preform decontamination solution to enhance hygiene is another good example of an attractive alternative for customers. A third example of our Group’s focus on customer and sales is an infrared camera by DeLaval which monitor a cow’s feed and health status and gives the farmer valuable information for operating the business more effectively.

THE GROUP IS WELL-POSITIONED

It is difficult to form an opinion of the present macro-economic situation and widespread political instability. I think the uncertainty of GDP growth will persist at least in the short term. Our performance last year, however, demonstrates that our Group is well-positioned to deal with present market conditions. We have a product mix that makes us less vulnerable to cyclical shifts in the global economy. Regardless of whether it concerns companies or individuals, there is always a demand for food and beverages. If we, in addition, can help our customers to be more successful by offering innovative products and services, we have a bright future ahead of us.

FOCUS ON GROWTH, COST AND SUSTAINABILITY

So the theme for 2016 will be to find innovative and creative growth. The only way is to deliver value to our customers, for instance by helping them to operate their plants more efficiently or supporting them in developing new products for the market. Another key issue in 2016 will be our own financial performance. We will continue to work on cost and efficiency. Competitiveness programmes including restructuring measures will be implemented in all three industry groups. Our focus will be to improve return on capital.
Finally, we are going to continue to develop our sustainability performance in all aspects, from FSC™ to recycling and reducing carbon footprints. Sustainable business solutions will truly be a competitive edge for both our customers and Tetra Laval. With these initiatives I am convinced that the Group can deliver continued good results in 2016 despite a turbulent world.

Larry G. Pillard​​

Lars Renström, chairman of the board

Lars Renström Non-Executive Chairman from June 10, 2016

Effective June 10, 2016, Mr Lars Renström is appointed Non-Executive Chairman of the Tetra Laval Group.

Mr Renström has been a member of the Tetra Laval Group Board since 2013. He succeeds Mr Larry Pillard, who is retiring after 16 years, including 14 years as Chairman of the Board.