High order intake in a difficult year with component crisis
2022 was a difficult year for Sidel and for the entire packaging industry. Following the pandemic crisis, there has been a huge need among food and beverage producers to invest in packaging equipment and increase their production capacity. Sidel therefore had a very high order intake during the year, but the global shortage of components has prolonged delivery times in our industry substantially. On a positive note, Sidel launched several new innovations, broadened its service concept, advanced its digitalisation and pushed boundaries within sustainability. After the pandemic restrictions, we had lots of positive meetings with customers that generated new businesses. When summarising 2022, I would like to take the opportunity to express my gratitude to all our employees for their hard work and devotion to serve our customers.
Positive economic result
In 2022, Sidel Group net sales amounted to €1.4 billion, compared with €1.4 billion in 2021. Order intake increased by 3 per cent for capital goods, slightly surpassing an already outstanding year. However, the shortage of components affected our working capital negatively, as Sidel continues to work diligently to shorten lead times. On the other hand, we successfully increased our sales of services, up 11 per cent versus 2021 at comparable rates, as our customers needed to maintain and improve their existing production lines. High inflation and energy costs affected our business and were mitigated by increased prices for packaging equipment across the industry, and we introduced new efforts to improve our structural costs. Altogether, we achieved a positive operating result for the year.
While order intake increased in all our regions, equipment sales were consistently somewhat lower than last year. US and Asia, including India, and Africa stand out as growth markets. We are leveraging the proximity of our production site in Pune, India, for example, to serve customers in the surrounding regions, and we further developed transversal engineering support in the country. We also opened an office in Kenya to increase our presence in Africa.
New innovations
At the Drinktec exhibition in Germany, we launched Aseptic Predis X4, which is an integrated blow-fill-cap solution that incorporates consolidated Predis™ dry preform sterilisation. This innovative Predis sets new standards and provides customers with a safe and sustainable platform that provides peace of mind while helping improve operational efficiency and reduce Total Cost of Ownership. We also developed 1SKIN™, a label-less recycled PET bottle with a tethered cap and a unique streamlined design for sensitive beverages. It is made from 100 per cent recycled PET (rPET) and was awarded Best in PET by the 2022 Global Water Drinks Awards. Hydra Ultrasonic is a new sustainable bottle washer for our beverage customers that uses ultrasound technology. Both returnable glass and refillable PET bottles can be treated, and we calculated a savings of 20 per cent in water versus traditional bottle washers, among other savings, thanks to this novel invention.
State of the art services through digitalisation
In 2022, we had the opportunity to premiere two more applications within our new Evo-ON® digital suite – Evo-ON Flex and Evo-ON Quality. The suite, now consisting of five unique apps, leverages built-in intelligence to supervise and optimise different aspects of the customers’ line. About 300 customer machines are connected to the platform. In addition, remote support solutions like Remote Access and Remote Video Assistance continue to optimise performance and further empower customers to resolve issues quickly and efficiently. In 2023, we will continue advancing our popular Sidel Services Online (SSO) platform, customised and designed to make it easier for our customers to not only find and order the exact parts they need, but also all the relevant services and upgrades to meet their production goals.
Sustainability progress
We revised our climate targets and, while still waiting for final confirmation from the SBTi (Science Based Targets initiative) committee, we are now on track to reduce the greenhouse gas (GHG) emissions from our own sites and facilities by 50 per cent by 2030, compared to 2019, instead of our previous target of 30 per cent. To reach this and other targets, we have strengthened our climate roadmap around four pillars: sustainability in our own operations, delivering more sustainable production lines through our equipment development and sourcing actions, advancing eco-services, and providing sustainable packaging. We inaugurated a pilot-scale rPET recycling line in Octeville, France, and services are provided in this testing platform along with laboratory capabilities to support customers in the transition from PET to rPET.
Leading Excellence at Sidel
The program ‘Leading Excellence at Sidel’ was initiated to manage ongoing internal projects and align our actions and initiatives across the company. It is all about how we work – with ultimate benefit for our customers from a more agile Sidel. We have prioritised and simplified over 250 projects into a harmonised smaller list of around 65 projects. Examples of projects are improved inventory management and strengthening our capabilities in the latest digital workplace technologies. We are stimulating cooperation by increasing visibility and empowering our people. The successful implementation of Leading Excellence will create a better supply chain, improve operational efficiency and reduce costs.
Theme – food accessibility
Providing access to safe food has always been at the core of what we do at Sidel. By designing and producing our equipment to high standards, we can ensure complete reliability in terms of food safety for both customers and consumers. A good example is Sidel’s high-quality bottled water solutions to meet the demand for safe drinking water. Service is also an important part of food accessibility by ensuring we have people on the ground 24/7 or supervising customers through remote digital devices to ensure customers can keep their machines running with minimal disruption.
Focus for 2023
Our main objective for 2023 is to overcome the component crisis, reduce our delivery times and become stronger as we turn learnings from recent challenges into better ways of working. Sustainability is at the core of our efforts, and Sidel will continue to take a proactive role, both in our own operations and through our solutions we develop for our customers, which is where we can make the biggest impact.
Finally, I am excited about our recent acquisition of Makro Labelling, Srl, an innovator and leader in modular labelling machines, based in Goito, Italy. Makro is a perfect complement to add to our existing labelling business, enabling us to offer a complete range of labelling technologies to customers, and broadening our reach within the Food, Home and Personal Care, and Wine and Spirits markets.
Despite the challenging market conditions, I am optimistic about 2023. We see signs that the component situation will improve, and with a record order book as we start 2023, we have many opportunities to make a sustainable difference for our customers as we commit to our vision of shaping the future of the packaging industry.
Monica Gimre