ANNUAL REPORT
Original perspective

EVOLUTION Be MORE. 2012-2015

Viscofan ended up Be ONE period (2009-2011) fulfilling main targets, with a more cohesive structure which positioned Viscofan in a favourable situation to benefit from the economies of scale, the geographical and competitive positioning achieved.

The Be MORE Plan has led to Viscofan achieving greater specialisation in the casing market, reinforcing its technological leadership in cellulose and collagen casings. A specialisation which transformed it into “The Casing Company ”.

The global context was characterised by an economic downturn and uncertainty, but this contrasted with the growth acceleration in the casing market. Ultimately, an environment that required Viscofan to be more in the Market, Optimisation, Returns and Excellence. Using these guidelines, the Be MORE Strategic Period (2012 - 2015) took over. 

Four years with two different phases, the first characterised by a high level of investment activity to respond to a growing and more global market, with an emphasis on investments to establish new collagen production factories, transforming the Viscofan Group into a global producer of this technology.

On the one hand, the construction of the Suzhou (China) collagen extrusion plant, in a country that is currently home to the biggest collagen casing market in the world, with almost1,400 million people, and where the Viscofan Group has managed to reach its target of a market share of over 20%. To respond to the growing demand for customized casings in the Latin American market, a year later, the Viscofan Group constructed the collagen extrusion plant in Pando (Uruguay), a competitive advantage given that Viscofan is the sole producer of collagen casing with productive presence in the region.

In parallel to this, investments have been made to improve technology and the productive processes in the remaining plants belonging to the Group, leading to a better use of the installed capacity and therefore greater growth in the region where the Viscofan Group is already present.

Following this, in the second half of the period, the casing sector began converging to normalised rates of growing volumes. Normalisation which in turn was affected by the volatility of commercial currencies and their impact on the purchasing power of emerging markets. In this backdrop, the Viscofan Group has driven forward Optimisation measures established in the Strategic Plan, allowing for speedy adaptation to this environment: Improvements in productive speed and automated processes, greater diversification and a better use of raw materials, energy efficiency, among others.

The Be MORE Plan has led Viscofan achieving greater specialisation in the casing market, reinforcing its technological leadership in cellulose and collagen casings. A specialisation which transformed it into “The Casing Company”, which was completed by the sale in March 2015 of the vegetable food division (IAN Group), and which was continued with the acquisition of the Nanopack Technology & Packaging S.L. in the second half of the 2015 financial year, and the implementation of plastic productive capacity in Mexico.

Ultimately, four years characterised by high investment activity, especially in the first half, with €287 million devoted to improve the Market value proposition, unique in the sector, and also to strengthen and improve the efficiency of the asset base thanks to the Optimisation projects.

From a financial perspective, the results obtained over these four years have been very positive. The Viscofan Group has registered an annual revenue growth in the casing division, with a CAGR 2015-2011 of 7.0%, a 8.6% growth of the EBITDA CAGR 2015-2011, and a 1.7 p.p. EBIDTA margin improvement. 

All this expansion has been undertaken through implementing rigorous commercial and operative discipline, which falls within the Return and Excellence initiatives, allowing growth to be accompanied by greater shareholder remuneration, which grew from €1.00 in 2011 to €1.35 per share from 2015 earnings, equivalent to a total overall payout of €221.4 million.

This period also saw a strengthening of the company’s balance sheet, reducing exposure to long-term risks by externalising the pension plans in a context of reduced interest, and achieving a net cash position of €3.2 million upon closing the 2015 financial year.

The Viscofan Group closed the 2015 financial year and the Be MORE Strategic Period in an ideal position, commercially, operatively and financially, to continue improving its long-term value proposition. Leading a market that has sound growth fundamentals and in which the Viscofan Group still requires much “more to be” a true global leader, which is the base for the “MORE TO BE 2016-2020” Strategic Plan.


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