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Positive results in a difficult year
for a future to be tackled with confidence and courage.

LETTER
TO STAKEHOLDERS

2020, which was marked by the Covid-19 pandemic, was a difficult year on a global level and has left an indelible trail of suffering and unsolved problems.
Despite the heavy health impact and the economic and social repercussions caused by the virus, Sofidel ended the year on a positive note, in terms of both sales and net operating margins.

Six factors have enabled us to achieve this result:

•    We belong to an industrial sector that has always remained active, even during lockdown periods, in all the countries where the Group operates, because we produce a commodity – paper for hygienic and domestic use – that is considered essential for the well-being of people and the hygiene of domestic environments and workplaces.

•    The launch, in February 2020, of an effective and caution-oriented “Action Plan”, coordinated and monitored by a dedicated control room. This plan, which is constantly updated according to directives from individual governments and international (WHO) and national health authorities in the various countries, has enabled us to protect Sofidel’s plants and prevent the development of internal outbreaks and the spread of the virus.    

•    The strong increase in sales in the retail market (Private Labels and Brands), in particular in March and April 2020 during the first wave of the pandemic, when toilet paper and kitchen towels literally disappeared from supermarket shelves in several countries due to panic buying. This growth compensated for the decline in the Away-From-Home line which, for Sofidel, accounts for just over 12% of sales and was heavily affected by the emergency.

•    Full operation, beginning in late summer 2020, of the new integrated plant in Inola, Oklahoma. A new-generation greenfield site which, in addition to increasing production capacity and improving the Group’s geographical coverage in the United States, significantly strengthened its position and growth potential in the American market.

•    The cost of pulp, our main raw material, remained stable and in line with the low values of the second half of 2019 after increases in previous years.

•    Favorable energy prices throughout the period, which allowed us to limit production costs.


With regard to the Covid-19 emergency, we have focused on three priorities: protecting the health of our employees and of the partners we work with, supporting the communities in which we operate, and safeguarding production continuity to ensure product supply and meet the needs of customers and consumers.

Consistent with our commitment to inclusive, sustainable and lasting development, we have promoted various initiatives aimed at the communities to offer support during health emergencies and prevent or counter situations of economic suffering and social hardship.

The projects concerned a number of hospitals in the areas where our plants are located, families in difficulty – identified through collaboration with public bodies and non-governmental organizations – and sectors particularly affected by lockdown periods, such as the catering industry.

Also with regard to our commitment to responsible development, our targets for reducing greenhouse gas emissions by 2030 were approved by the Science Based Targets initiative (SBTi).

An acknowledgement that confirms that our progress is in line with the reductions needed to limit global warming to below 2°C, as required by the 2015 Paris Agreement.

In 2020, Sofidel reaffirmed the priority of certain issues already at the heart of its strategy: the absolute importance of digital transformation (with its implications for production, maintenance, supply, logistics, e-commerce and cyber security); the increasingly widespread demand for innovation in all company areas (product, processes and services); the need for an even more shared and multilateral commitment to promote integral well-being and give people and the planet a positive future.

Today, people are increasingly attentive to the values that a company expresses. Brands are not only asked to develop high-quality products, they need to be authentic and contribute to the well-being of society and the planet. In this very complicated year, we wondered about the true raison d'être of our company and the values that guide us. 

To give form and substance to these reflections, at the end of the year we presented our purpose within the company:
 

CLEAN
LIVING
FOR EVERYDAY NEEDS
FOR A HEALTHIER PLANET
FOR INTEGRITY AND RESPECT

This purpose, which will guide our future actions, clearly expresses how we want to participate in building the common good.

2020 ended with the distribution of the first doses of vaccine. While it is certainly not the time to lower our guard yet, it is time to start looking beyond the emergency to promote a recovery based on more balanced and sustainable development paradigms.

On a market level – pandemic permitting – we expect a recovery in the Away-From-Home line in the short term as well as a return to more stable and ordinary consumption conditions in the retail channel. Similar considerations apply to the cost of pulp, for which we expect a likely increase.

In this context, Sofidel will work to further strengthen its position in the American market (currently the Group's top market in terms of sales) and on the digital front, which is growing rapidly.

In addition, we will strive to promote innovation, both in terms of production processes and product offerings, to create shared added value along the entire value chain.

Looking at the medium-long term, the Group intends to promote the “transformational change” needed to build a stronger, fairer society in harmony with the planet.

In a world where the speed of change generates imbalances and uncertainties, Sofidel is working to be among the companies that are committed to anticipating and governing this evolution in the best possible way. A role in tune with the main international institutions, which guides our development path along three fundamental axes: ecological transition, technological and digital transformation, inclusion and social cohesion.

Looking ahead to 2021 and beyond, this is the direction we intend to take together with all our stakeholders.
 


Emi Stefani
Sofidel Chairman


Luigi Lazzareschi
Sofidel CEO

“OUR DEVELOPMENT PATH IS ORIENTED ALONG THREE
FUNDAMENTAL AXES: ECOLOGICAL TRANSITION, TECHNOLOGICAL
AND DIGITAL TRANSFORMATION
, INCLUSION AND SOCIAL COHESION.

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