2020 was unlike any other year and very challenging for Sidel. The effects of the Covid-19 pandemic have been severe, both for Sidel and our customers. To overcome these challenges our organisation has shown great commitment and agility – I would like to express my gratitude to all employees for outstanding achievements. We have focused on supporting our customers, and keeping our business running while prioritising the safety of our workforce.
We made a number of important achievements during the year. Our customer survey highlighted that our ability to meet the needs of our customers contributed to a sharp increase in customer satisfaction. We managed to support customers in various ways to minimise disruption to their operations, including offering more remote digital services, and I believe they truly see us as an essential partner. Other positive results from the year included advances in digitalisation, sustainability and further developments in aseptic technology. Sidel also formed a strategic alliance with Elettric80 to provide comprehensive services ranging from production to warehouse, distribution centre and logistics management. During the pandemic, customers have been even more focused on logistics, with automated warehousing offering an attractive solution to both reduce costs and respond to increasing e-commerce needs. Moreover, we launched our own packaging design agency, Gentlebrand, to meet our customers’ branding design needs. With an innovative approach, Gentlebrand really understands what it takes to design a good bottle – fulfilling every aspect of branding, production efficiency and sustainability. The agency was awarded the 2020 Bronze A’Design award.
2020 was also a very challenging year from a financial perspective. Despite order intake being down by about 20 per cent on capital goods and services decreasing by about 10 per cent, Sidel managed to achieve net sales of almost €1.3 billion, compared to around €1.4 billion in 2019. Through our ‘Fit for Business’ programme, we managed to substantially reduce costs and thereby achieve a small operating profit. This was thanks to the hard work of our colleagues who implemented both short- and long-term cost cutting measures to alleviate the effects of the pandemic. We also achieved an important reduction in receivables, which contributed to a positive cashflow for the year.
New consumer market trends emerged during the pandemic. For example, consumer preference for water shifted from single-serve on-the-go packaging towards larger, family-sized water containers – reflecting lifestyle changes. Another example was a declining beer market, mainly due to beverage sales at sporting events and concerts no longer being a source of revenue for many customers. Despite this development, Sidel had a strong increase in alcoholic beverage sales last year, while sales from non-alcoholic beverage customers declined. This was partly driven by the introduction of hard seltzers and low or no-alcohol beer to the market by brewers and other alcohol producers, addressing customer consciousness about health and wellness. Another trend caused by the pandemic was the increasing demand for hand sanitising gels and related products, which increased sales of FHPC (Food Home Personal Care) equipment.
Besides the portfolio of eco-friendly solutions for our customers and the commitment in our own operations to reduce environmental impact, we have developed a number of sustainable packaging solutions. X-LITE™ Still is an extremely light-weight 500ml PET bottle that is compatible with tethered caps. We have developed it with 100 per cent recycled PET (rPET), with reduced cost and impact for the environment. Another is AYA, an eco-friendly end-to-end packaging concept, which was awarded ‘Best Drink Packaging Design’ at the World Food Innovation Awards 2020. In addition, we are building a smaller-scale real-life PET recycling line, to serve as a service laboratory to support customers to transition to recycled PET packaging.“In terms of food safety, the Sidel Aseptic Combi PredisTM stands out and is a very good example of how PET can contribute to protect our customers’ high-quality products”.
The theme of this year’s report is Food Security, covering both food safety and food availability. In terms of food safety, the Sidel Aseptic Combi PredisTM stands out and is a very good example of how PET can contribute to protect our customers’ high-quality products. We were first in the industry to receive U.S. Food and Drug Administration (FDA) approval for our blow fill seal filler with aseptic technology for low acid products. Our sustainable packaging solutions for water is part of our commitment to make water available to consumers all over the world. Our end-to-end PET solutions for water encompass not only primary, but also secondary and tertiary packaging.
With a low order backlog from the end of 2020, we believe that 2021 will be another challenging year for our business and we do not expect the market to recover until 2022. With this in mind, we will focus on continuing to support our customers, further improving our cost structure, and continuing to develop new innovations that will help our customers to become even more competitive while lowering their Total Cost of Ownership.
The essence of our vision is innovation by looking at all dimensions of packaging, which is part of our DNA, built on our long history and expertise as industry pioneers. We shape the future of the packaging industry by providing customers with high-performance solutions for product protection, desirability, availability and sustainability. This is our purpose and passion, and will guide us in our journey ahead. With this in mind I look forward to an exciting 2021 for Sidel.