​​​​​​​​​​​​​​​​​Strong progress in a challenging year

2015 was a year that brought many changes to Sidel, which is leading the group in a positive direction to meet our customers’ needs. We improved many areas of our operations while facing challenging market conditions. Several key markets, especially in developing regions, weakened during the year. In China, where our market position is very strong, demand for new equipment dropped precipitously. As usual, when demand weakens, pricing pressure increases and this is exactly what we have seen in the last quarter of the year. However, the improvements that we have made to our business will enable us to adapt to this situation and react faster to market demands in the coming few years.

During year 2015 we continued to launch Sidel Matrix™, our latest generation of PET packaging equipment based on a modular platform, with a very positive reception from our customers.

The Gebo Cermex business, offering production lines and standalone equipment for the glass and can markets, continued to grow external order intake rapidly, due to improvements in its product offering and by addressing non-beverage market segments with its separate sales force. Another very positive development was the performance of the newest member of the Sidel Group, Novembal, which develops and manufactures plastic caps for the bottled liquid food market. By providing a consumable to our beverage customers, Novembal is a strategic complement to our equipment and services offerings. In addition, we continued to roll out our refreshed Sidel Services™ portfolio. A new spare parts delivery service, to choose just one example, aims to lower costs for beverage producers by encouraging them to take a more proactive approach to parts inventory management. The importance of services will continue to grow, driven both by customer demand and by our expanded offering.

SLIGHTLY HIGHER SALES AND IMPROVED PROFITABILITY

From a financial point of view Sidel Group net sales were flat in 2015, reaching €1,410 million, which is a slight increase from €1,390 million the year before. Order intake for PET packaging equipment decreased compared to the previous year, as we were not able to completely offset the collapse of the Chinese market. Sidel continued to improve its competitiveness by driving cost-efficiency in structural costs, sourcing and project execution. Gebo Cermex has delivered solid growth for the last three years, increasing market share through enhanced business focus, especially in non-beverage markets, and it is hitting its profitability targets. Novembal also demonstrated solid growth in 2015 in line with its focus on the North American market for bottled water in PET.

MIXED DEVELOPMENT IN GEOGRAPHICAL MARKETS

The general slowdown in the developing economies, and especially China, has resulted in a severe cyclical downturn in equipment demand. However, the North American market improved in 2015, while the recession in South America continued. Particularly the Brazilian and Argentinian markets weakened during the year. The European market was quite stable as was Greater Middle East, although oil price volatility negatively affected demand. South East Asia Pacific displayed a steady demand from customers.

REDESIGNED ORGANISATION

In the Sidel core PET business, we continued to make progress toward becoming a simpler, faster and more efficient company. With the launch of Sidel Matrix now well under way, we redesigned our organisation to better exploit the modular architect​​ure of the new product platforms. From previously having sales process of “engineer to order”, we now offer “configure to order” meaning that we have predefined modules but still the flexibility to meet customer demand by adding different characteristics and features. This allows us to better standardise our processes and components and thereby simplifying operations and reducing costs.

The new and more functionally oriented organisation will have fewer management levels and clearer accountabilities, and it will enable substantial cost savings over the coming few years. The new structure will also empower Sidel’s employees worldwide to ensure that customers have faster access Sidel’s PET packaging expertise and unrivalled local market knowledge around the world. As part of this planned reorganisation, Sidel also intends to move its headquarters from Zug in Switzerland to Parma in Italy. 2015 we laid the groundwork for this new organisation, and in 2016 we will implement it.

After eight rewarding years as CEO I am now leaving Sidel. I would like to take the opportunity to thank all my colleagues past and present for their outstanding achievements and loyalty to the group, as well as customers and other partners for our fruitful collaborations. Sidel is positioned for great success the years ahead, under the leadership of successor Sam Strömerstén. I will now be looking at the Sidel Group from the outside, however I will continue to feel the passion and rejoice in the future success of this great company.​

Mart Tiismann​