Home Tetra Laval Annual report Sidel Comments by the CEO

Comments by the CEO

“We will capitalise on the lessons from COVID-19 to drive excellence, effectiveness and productivity, as well as continued development in core areas, such as digitalisation, sustainability and aseptic solutions”.

Positive results despite difficult market conditions

In 2021, Sidel achieved good results despite a challenging market with increased raw material prices, long delivery times and restrictions due to the COVID-19 pandemic. I believe that we were able to continue to meet customer needs through our ability to adapt and be agile, and by working closely with our customers to overcome market challenges. We also made good progress in digitalisation, aseptic solutions, sustainability and improving how we work at Sidel. When summarising 2021, I would like to express my gratitude to our devoted co-workers – without their commitment and hard work, we would never have succeeded in satisfying our customers amidst these difficult times.

We are well known by our customers for our agility and commitment that helped our achie­vements during the year. Agility comes from years of partnering with customers to overcome challenges, and commitment is related to how we support our customers to deliver value.

Meeting our financial goals

In 2021, we met our targets in net sales, order intake, operating profit and cashflow. Net sales amounted to €1.4 billion. Order intake increased by 42 per cent for capital goods and 11 per cent for services due to strong consumption. Many investments were made in 2021 to catch up with the ‘pause’ of 2020 related to uncertainty during the pandemic. Many orders were also placed earlier at the end of the year instead of 2022, due to long delivery times, which have more than doubled due to the widespread shortage of electronic components. We don’t expect delivery times to return to normal until the summer of 2023. We were also successful in cutting costs and achieved a positive operating result. Increased sales, lower costs and receivables also contributed to
a positive cash flow.

Rebound of the packaging market

The packaging market started to rebound in the fourth quarter of 2020 and the positive trend continued throughout 2021, with consumer demand back to 2019 levels for most categories apart from alcoholic beverages. Health and nutrition remain a priority for consumers, which boosted demand for products like flavoured water and dairy. The interest in ‘water on the go products’ also returned as well as aseptic bottles for healthy products, especially in the US.

The beverage, food, home and personal care market segments grew by 7.8 per cent to 3,835 billion units in 2021, compared to 2020. The positive market trend prevailed in most geographies except for Southeast Asia where the pandemic continued to impact investments. In terms of packages, PET enjoyed a strong demand with a particular interest in recycled (rPET). Both PET and can exceeded 2019 levels while the demand for glass as a packaging material decreased.

Lessons learned from the pandemic

During the past year, COVID-19 created market challenges for Sidel and the entire industry. A shortage of electronic components, travel restrictions, and price increases on raw materials, packaging materials, logistics and transport increased costs and delivery times. But there were also lessons learned that contributed to Sidel’s development, such as better price management, and accelerated digital services with the launch of the Evo-ON® digital suite and remote services for the instalment and servicing of machines at customer sites. Moreover, we continued to evolve our ‘Fit for Business’ programme that aims to alleviate the financial impact of the pandemic. In 2021, our focus was on sustainable, reoccurring savings year after year, and on improving the way we work. We have created a new programme, ‘Leading Excellence at Sidel’, where we simplify our routines, increase digitalisation, and become better at visualising and working cross-functionally to better co-ordinate an improved workflow.

Sustainability at our heart

In 2021, we set science-based climate targets in line with the Paris climate agreement and made good progress on achieving them. Our climate target for 2030 is to reduce energy consumption and emissions by 30 per cent across our sites and facilities and by 25 per cent for everything that we purchase and sell. Our work on scope 1 and 2 includes expanding our ISO certifications, making investments in renewable energy and energy efficiency, and using our Evo-ON Eco application for monitoring and improving on-site manufacturing in our factories, which is the same technology we provide to our customers for optimising their production. For scope 3, besides focusing on sustainable sourcing, we have developed a new aseptic PET line solution that lowers the CO2 footprint through a more efficient use of resources, and new bottle washers that allow less water and chemical use. Sidel has also set up a pilot-scale PET recycling line in Octeville, France, to support customers with the transition from PET to rPET to reduce their own scope 3 emissions. In addition, we are helping customers with tethered caps, developed by Novembal at Sidel Group, among others around the globe, which may require the upgrade of existing lines, for regular and sensitive products where food safety cannot be compromised.

Strong support for sustainable food systems

Sidel has a strong standpoint on the theme of this report – ‘Sustainable Food Systems’. With our packaging solutions and know-how, we can contribute to sustainable food systems and many of the Sustainable Development Goals. By engaging with customers, we can develop new innovative and sustainable solutions to meet their needs.

2022 – opportunities for growth and positive results

We are planning several new product launches in 2022. Having a leading position within aseptic PET solutions, one important product launch will be the Aseptic Predis X4 with an integrated blow-fill-cap solution, which will offer our customers simplicity, food-safety, and built-in intelligence. We will also continue to grow in the Food, Home and Personal Care markets, where we see good opportunities for market expansion. We will capitalise on the lessons from COVID-19 to drive excellence, effectiveness and productivity, as well as continued development in core areas, such as digitalisation, sustainability and aseptic solutions. Even though the current market challenges are difficult to predict, I am convinced that Sidel can continue to achieve positive results – by staying agile and working together for the success of our customers.

Monica Gimre