PACKAGING
Stronger earnings and
greater market share
In a market that saw a slight decline in demand for blister
packagings, the Packaging Division maintained its sales at
a healthy CHF 106.5 million. EBIT was raised a substantial
33.3% to CHF 5.0 million.
Market environment
The growth in the market of blister packagings for the pharmaceuticals sector has slowed recently all over the world. In the key European
market, the volumes of PVC-based medical packagings sold in 2012
were a full 2.5% below their prior-year levels. The resulting lower
capacity utilizations intensified competition among producers, with a
corresponding increase in pricing pressures. The Asian market saw
particularly intense competition, especially from Indian and Chinese
manufacturers.
2012 brought a continuation of the recent trend towards simpler
packaging qualities with their substantial cost savings. The tendency
is being further promoted by the expiry of patents on a number of
blockbuster products and the continued production of these medications under generic names and in simpler packagings. Client manufacturers in the generic medication market are highly price-sensitive,
and also demand swift supplier responses to their specific needs.
At the same time, the market is also witnessing the emergence of
several newly developed agents, which, by virtue of their complex
molecular structures, make greater demands on their packagings’
barrier-film credentials. This is an area in which Perlen Packaging,
with its high-barrier-film products, can compete extremely effectively
against its rival producers.
28 CPH Annual Report 2012 Packaging
On the raw materials prices front, the upward trend of the previous
two years persisted in 2012, with some products subjected to excessive price increases. Most of the higher raw materials costs could be
passed on to customers, however, in the form of pricing adjustments.
Business development
After the traditionally stronger first six months, demand for the Packaging Division’s products was additionally muted by a weakening economy in its core markets in the second half of the year. Despite the
adverse market conditions, Perlen Packaging maintained its business
in Europe, recorded growth in Asia and consolidated its position in the
USA. Its South American operations sustained a slight year-on-year
decline in volumes sold. Overall, and despite a 2.4% decline in sales
volumes, the Packaging Division was able to increase its market share.
Net sales for the year amounted to CHF 106.5 million, up 0.7% from
2011. The enhanced product mix and the corresponding improvement
in sales margins were reflected in the CHF 11.2 million EBITDA result,
which was a 9.0% increase on the prior year. EBIT was also raised,
from CHF 3.8 million to CHF 5.0 million; and EBIT margin rose accordingly from 3.6% to 4.7%. The division invested CHF 3.0 million in tangible fixed assets in the course of 2012, and employed 279 personnel
at year-end (compared to 275 at the end of 2011).
in CHF million
Strategy
Perlen Packaging offers a full range of packaging products from
PVC monofilms to high-barrier films. Its prime focus is on developing higher-value products for demanding pharmaceutical applications.
The recent expansion of its key account management to permit the
coordinated implementation of its global customer care strategy has
also proved a success and will be further pursued.
Greater exploitation of the growing Asian and Latin American markets
is another central plank of the current divisional strategy. With this aim
in mind, sales and distribution activities were intensified in Japan and
China in the course of 2012; and in South America the foundation was
laid for a closer sales collaboration with a local partner that should
permit the more intensive cultivation of the region’s markets. Perlen
Packaging also increased its presence in Eastern Europe by recruiting
additional sales agents.
in CHF million
(left-hand scale)
Outlook
The global pharmaceuticals market will continue to expand. In view
of this, projections for the blister packaging segment predict strong
further growth, albeit with regional variations. The European market
should return to growth following its decline in 2012; and stable development is expected in the emerging markets, for Asia in particular
but also for South America.
Perlen Packaging is the market leader for high-barrier PVdC films.
To further consolidate this position, the division plans to introduce a
new product range. With its enhanced barrier credentials, this new
generation of products should enable Perlen Packaging to tap into
new segments of its demanding target market.
The Packaging Division expects to achieve further increases in 2013
in both its net sales and its earnings results.
Packaging net sales by region
Switzerland 4%
Eurozone 45%
Rest of Europe 17%
USA 4%
Rest of the Americas 11%
Rest of the world 19%
Packaging net sales trends
120
108
96
84
72
60
48
36
24
12
0
2008
2009
2010
2011
2012
Packaging EBITDA trends
20
20
18
18
16
16
14
14
12
12
10
10
8
8
6
6
4
4
in % of net sales
(right-hand scale)
2
2
0
0
2008
2009
2010
2011
2012
Packaging EBIT trends
10
20
9
18
8
16
7
14
6
12
5
10
4
8
3
6
2
4
1
in CHF million
(left-hand scale)
in % of net sales
(right-hand scale)
2
0
0
2008
2009
2010
2011
2012
Packaging CPH Annual Report 2012 29