Meeting financial targets despite supply chain challenges
Despite on-going supply chain challenges, we exceeded our net sales and operating profit targets in 2023. We also progressed in our Leading Excellence transformation journey and continued to ensure our customers benefit from the latest sustainability innovations in the food, personal care and beverage industries.
Our net sales amounted to an all-time high of €1.6 billion in 2023 compared with €1.4 billion in 2022. Order intake levelled-off very close to budget, while we continued to considerably increase our order backlog due to the component shortages we have experienced in the last two years. We were challenged to meet the demand for our products and had to be selective on our order intake. In all regions, sales increased compared to 2022, with the strongest growth in Asia, Oceania and Africa.
Our Leading Excellence transformation
In 2023, we embarked on the implementation phase of Leading Excellence, our three-year transformation programme. Several projects entered the execution stage, which will continue throughout 2024 and 2025. Through this journey, we are fundamentally changing the way we work to become a more agile and high- performance organisation, so that we can best address the end-to-end needs of our customers.
The programme is being driven by a dedicated team of Sidel leaders and experts in a ‘bottom-up’ manner across our organisation. Leading Excellence will ensure we have the right tools, processes and capabilities to make us more efficient – while retaining the things that make us unique in terms of our customer centricity and focus on innovation.
During the year, we continued to optimise our industrial footprint by moving the manufacturing of two factories in France to existing Sidel factories and divesting the Novembal cap factories in the US. These changes are being complemented with on-going manufacturing evolutions to leverage more flexible and efficient production.
Helping our customers optimise their resource use
We have fully embraced the Environment, Social and Governance (ESG) framework, which goes hand-in-hand with our transformation. In 2023, we continued to drive our offering of innovative solutions that help customers to reduce, reuse and recycle resources, as well as improve quality and realise cost savings.
We continue to be a recognised leader in optimised container design where we drive the sustainability performance of our customers’ packaging through our expertise and state-of-the-art laboratory in France for recycled PET. The innovative solutions we have developed include a breakthrough PET blower that produces resource-efficient, uniquely designed bottles with patented laser technology. At the same time, we completed final tests of our ultra-sonic washer for reusable bottles, that uses significantly less cleaning liquid and water.
Aseptic bottling is becoming increasingly popular for customers, for several reasons across different markets including sustainability, quality and innovative design opportunities. We’ve seen the largest growth in aseptic in large markets, like China and India. And of course, all customers value the cost savings that aseptic bottling can deliver.
In addition, we are further driving digitalisation at Sidel by developing the next generation of connected machines for our customer offering and providing digital services such as 3D machine renderings that facilitate spare part recognition for customers. Our ‘365 Technical Assistance’ service was launched in 2023 to help customers enhance their performance with 24/7 support, a two-hour response time, and the best technical experts for assistance solutions provided through remote channels. But just as important, digitalisation is helping us to optimise our own processes and operations, which will significantly benefit how we operate and better serve customers.
Our role in mitigating climate change
With ‘mitigating climate change in the food and beverage industry’ the theme of this year’s report, we clearly have an important role in enabling customers to reduce their climate impact – particularly as 89 per cent of Sidel’s life cycle climate footprint is created by scope 3 downstream activities. Climate mitigation is a major focus area for our customers, and we must similarly work to decarbonise our own operations.
Our strengthened labelling offering
We acquired the Italy-based, modular labelling machine company Makro Labelling in 2023, which has provided us with innovative technologies that we did not previously have in house. We are pursuing many mutually beneficial synergies, including looking at how we can both strengthen our development capabilities. The acquisition is also supporting our growth strategy for the food, home, personal care, wine and spirits customer segments, which is really exciting.
Transformation for a better future
In the last quarter of 2023, we were able to begin to reduce our order backlog and are already returning to better delivery times for customers in 2024. We look forward to continuing the implementation of our Leading Excellence transformation journey in 2024, while stabilising our supply chain, and really starting to reap the benefits of our enhanced way of working.
With innovation a core part of our DNA, we will fuel this passion by improving how we innovate for a more efficient and faster flow from idea to market. This will involve offering more innovations that help boost our customers’ efficiency and sustainability performance. I am confident that our transformation will ensure we have the tools and the evolving culture we need to safeguard our own destiny and be better prepared for the future.
Monica Gimre