COMMENTS BY THE CEO

In 2017 we had the opportunity to show the world how we are enabling customers’ success via easy-to-use, future-proof, flexible technologies that add value to their businesses. Particularly impressive was our performance in aseptic applications, where our expertise on sensitive products is being well recognised by the market.

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Focus on customer success

In 2017 we had the opportunity to show the world how we are enabling customers’ success via easy-to-use, future-proof, flexible technologies that add value to their businesses. Particularly impressive was our performance in aseptic applications, where our expertise on sensitive products is being well recognised by the market. With more than 100 Sidel Combi Predis™ installations worldwide, we received further endorsement of this system last year, via the approval of the Food & Drug Administration (FDA). This validation makes the solution the world’s first aseptic PET filling equipment with dry preform sterilisation qualified for low-acid manufacturing and commercial distribution in the United States. We also launched a number of new solutions and continued to integrate our Agility 4.0™ programme into our product offering, creating great interest among our customers. In summarising 2017, I would like to highlight my personal satisfaction of being part of a team of committed colleagues. All the achievements from the past year come down to the hard work accomplished throughout the organisation and I would like to thank all our employees for their support and dedication.

SATISFACTORY FINANCIAL DEVELOPMENT

From a financial point of view, we were pleased to see growth in order intake, because of good levels of demand in the second half of 2017, after a weak start of that year. This is placing us almost 3 per cent ahead of 2016, with the PET business growing by 6 per cent, continued overall growth in Services and a strong backlog to start 2018. In terms of sales, our PET business grew, counterbalanced by a slight decline in can, glass and material handling. This resulted in flat net sales compared to previous year. In most regions, we have expanded our presence. This positive trend was particularly evident in Latin America and North America, where we reconfirmed the strong growth achieved in 2016. The Chinese market is picking up after two slow years. In South East Asia Pacific and the Middle East, we did not perform as expected; this is mainly due to a low level of investment. The equipment market overall saw strong demand for aseptic solutions, a segment where Sidel is a clear leader. In the Liquid Dairy Products (LDP) category, we have increasingly captured opportunities for conversion to PET, especially around on-the-go formats, designed to suit younger, more active consumers. The growth in the aseptic market reflects burgeoning consumer preference for healthy and functional products. The beer, home and personal care markets also showed positive figures, while we registered softer development in the water segment.

SUCCESSFUL PARTICIPATION AT DRINKTEC

One of the year’s highlights and an important milestone was our participation at the Drinktec fair. It gave us a good opportunity to show our customers, business partners and industry players what we really mean by Performance through Understanding. It all boils down to our ability to deeply understand our customers’ needs, targets, and the markets they serve, and to demonstrate how our solutions and equipment can improve their performance, lower their total cost of ownership and contribute to a reduced environmental impact. What they buy from us are production capabilities. As such, cost of ownership and revenue generation possibilities must be attractive for them. The many positive comments we collected from our visitors during the show has been reconfirmed by the deals we signed during the last quarter of 2017: this is a clear signal that we are going in the right direction.​

LAUNCH OF SEVERAL KEY INNOVATIONS

In 2017 we launched a significant number of product innovations. The global introductions of Sidel Super Combi at Drinktec, and the Gebo Cermex AQFlex® system at Interpack, were both monumental in their own right. The Super Combi, integrating five process steps – preform feeder, blower, labeller, filler/ capper and cap feeder into an all-in-one smart system – is the next-generation solution for water and CSD producers. As such, it was awarded the ‘Best Manufacturing or Processing Innovation’ at Drinktec. AQFlex represents a true breakthrough solution in product handling: suitable for all the markets we serve, it delivers unprecedented packaging line performance, unique agility and smooth contactless product conveying and accumulation, in a very compact space. Drinktec enabled us also to highlight our innovation capabilities, via concepts we are currently developing, for instance the Sidel Combi+, combining labelling and filling steps in an innovative way, and laser oven technology.

SMART SOLUTIONS FOR TODAY’S DEMANDS

In 2017 we continued to embed smart automation, innovative technologies of connected machines, and data-analytics management into our portfolio. One example is our Sidel Super Combi: its integrated intelligence helps manufacturers keep and improve performance, leading to optimised production and maintenance services. Two units of our Super Combi are already in use at the Niagara Bottling LLC production plant, allowing this leading US bottler to enhance performance in a smart way. Another valuable example is the Sidel InUse platform, able to predict potential failures and optimise maintenance plans. Accessible via smartphone or tablet with a dedicated mobile app, it helps producers share and interpret data from connected equipment, for faster problem solving and timely detection of possible issues. Our data acquisition & plant intelligence system EIT™ – Efficiency Improvement Tool – is also highly appreciated by the market, as it allows manufacturers to optimise efficiency and improve productivity of packaging lines over the lifetime of their investment. As such, it is particularly endorsed by customers working according to LEAN methodology and applying TPM, 6 sigma and similar approaches for continuous improvement.

Our Agility 4.0 programme allows customers to realise the opportunities offered by the most recent developments in IT, with machines smoothly communicating with operators, easy monitoring of potential faults and detection of the causes. For example, the intelligent end-of-line solution installed by Gebo Cermex at one of the main industrial bakeries for the Intermarché Group, in France, is managed via a centralised supervision system connected with the site’s ERP (Enterprise Resource Planning system) for a smoother production flow. In Indonesia, Gebo Cermex engineers designed a new automatic palletising solution tailored to the needs of the region’s biggest beverage plant – a Coca-Cola Amatil Indonesia (CCAI) facility. Since its installation, the plant has seen a 50 per cent increase in line efficiency and higher overall equipment effectiveness. All in all, we are helping customers to lower cost and improve performance of their lines, while benefitting from increased ease of use.

OUR LONG-TERM GROWTH AND BUSINESS STRATEGY

Looking forward, we can ensure to expand our presence only by making our customers successful. This is why we are relentlessly working at improving capabilities of our equipment and at optimising our Services portfolio, to offer our customers greater performance over the lifetime of their installations. We are developing our Services offering along two main directions: the optimisation of our maintenance portfolio, aimed at increasing uptime while lowering costs for producers, and the enhancement of our field service organisation, in terms of size and expertise. All of that by combining the diverse competences and resources of the entire Sidel Group.

FOCUS IN 2018

In 2018 we aim to continue the implementation of our strategy. In order to further connect to our customers on this regard, we recently launched our “Customer eXperience” programme, an initiative that will help us structure the feedback we are receiving from our clients, focusing on five touch points along the customer journey. By quickly implementing their input in our routines and procedures, we are significantly improving the quality of our business relationships and of our offering, while measuring our performance in real time. From a market perspective, we expect to see developments in the aseptic segment, allowing us to strengthen our position in China and South East Asia Pacific. Our Sidel product pipeline this year includes solutions that improve the flexibility and process speed of production lines, thus responding to customer demands for greater performance. In this regard, we should mention our new filling technology for bottling still water, EvoFILL HS Still; our new can filler, EvoFILL Can; and the new EvoDECO, the labelling platform providing manufacturers with reliability and performance, regardless of label type, with no compromises on efficiency. This is how we will continue to generate Performance through Understanding for our customers.

Sam Strömerstén

 “We are developing our Services offering along two main directions: the optimisation of our maintenance portfolio, aimed at increasing uptime while lowering costs for producers, and the enhancement of our field service organisation, in terms of size and expertise. All of that by combining the diverse competences and resources of the entire Sidel Group.”

“Particularly impressive was our performance in aseptic applications, where our expertise on sensitive products is being well recognised by the market.”