Tetra Pak Results Impacted by Softening GDP and Rising Competition

08 Apr 2015 --- A further softening of global GDP and rising competition within the liquid food packaging sector made 2014 a challenging year for Tetra Pak. Despite this, the company achieved net sales of €10.9 billion, up 1.7 per cent from 2013, with strong growth in Capital Equipment and Technical Sales helping to offset a disappointing year for packaging material.

“Against the backdrop of a tough year, with slower packaging material growth than originally expected, we saw clear evidence that our business strategy is working. Capital Equipment sales reached almost €2 billion and Technical Sales topped €1 billion for the first time in the company’s history. Our processing business closed the year with a record high order backlog, up 20 per cent compared with the end of 2013. And we saw a significant increase in sales of our advanced packing formats: 7.1 billion more packs reached the shelves in 2014 than in 2013, offering customers optimal functionality and differentiation,” Tetra Pak President and CEO Dennis Jönsson commented.

The company’s Packaging Solutions business reported net sales of €9.4 billion, 0.9 per cent higher than in 2013. Packaging material volumes touched 180 billion packs, slightly ahead of the 178 billion packs sold in 2013, while Capital Equipment saw revenues rise 6.4 per cent year on year and Technical Sales climbed nearly 11 per cent.  Almost 30 per cent of Technical Sales now comes from service contracts, as more and more customers recognise the value of proactive maintenance, stable performance and predictable costs.

Rising demand for products within the company’s advanced format came mainly from within the family pack segment, where Tetra Brik Aseptic Slim and Tetra Brik Aseptic Edge, each with new generation openings, saw annual sales climb 42 per cent and 55 per cent respectively. In portion packs, Tetra Prisma Aseptic continued to set the pace, with year-on-year growth of more than 38 per cent, or 2.1 billion packages.

In contrast to the company’s Packaging Solutions business, Processing Solutions had another year of good growth, with particularly strong demand in the milk powder and cheese processing sectors. Net sales increased by almost 7 per cent year-on-year, driven by double digit improvements in South Asia, East Asia & Oceania and in Greater China, and buoyed by Tetra Pak’s first quarter acquisition of Switzerland-based Miteco, the world leader in production solutions for carbonated soft drinks.

The company also reaped benefit from the 2013 acquisition of Danish filtration technology specialist, DSS Silkesborg, whose expertise and reputation played a key role in securing the largest Processing order in Tetra Pak’s history, a dairy and whey powder plant in Germany.

2014 saw the launch of a range of new processing and packaging products, designed to support customers’ sustainable growth ambitions.

One of the highlights in this regard was the introduction of Tetra Rex Bio-based, the world’s first carton package made entirely from plant-based materials, combining paperboard with plastics derived from sugar cane, rather than oil or gas.

More broadly, the innovation pipeline continued to deliver processing and packaging solutions to meet customers’ needs in ways that minimise environmental impact, and lower costs, by optimising energy use, reducing water consumption and cutting waste

“2015 will undoubtedly be another demanding year, but we are confident that our strategic direction will continue to strengthen our market position and bring us further success in both Packaging and Processing. Our focus, as always, will be on creating customer value, through continuous innovation and by helping to ensure customers are well-placed to capitalise on the many opportunities we see on their horizons,” concluded Jönsson.