Viscofan World
Letter from the chairman
"In 2016 we laid down the first cornerstones upon which we will roll out our strategic plan “MORE TO BE”, which will transform our company into a genuine global leader in meat casings, a leader in service, a technological key player and a pioneer in costs."
Viscofan Chairman
Dear shareholder,
In 2017, we carried out the projects defined in our MORE TO BE 2016-2020 strategic plan with a view to transforming our company into an authentic global leader in the casings market. In this very demanding market, we must rapidly respond to the needs of our worldwide customers, providing them with the best guarantees and product quality.

And this is exactly what Viscofan has done throughout 2017: a wide array of projects at all our facilities transforming our company and, most likely, the way we compete in the future.

I would first like to highlight the new plant in Cáseda, which was built in record time. The first metres produced at this plant became a reality in less than 18 months following the board’s approval. This significantly complex project concluded satisfactorily with a remarkably low accident rate, one that is much lower than the rates in other projects of comparable breadth. While the notable swiftness in this regard is excellent for generating returns on the project, the special care with which it was carried out is nevertheless much more important, since we are dealing with personal safety.

In collagen, we also completed the scheduled extensions in Serbia and China to gain better response times for our customers and buttress a more competitive cost structure.

Some projects, such as the inauguration of the clean room in Germany, entailed the application of our knowledge to other fields. A plant that has all the guarantees for producing collagen for medical use. Being capable of producing at the demanding levels of a medical product is a good demonstration of our technological know-how and the quality that Viscofan can offer with our products. In November 2017, we also inaugurated the hydrolysed collagen plant in Germany for producing nutritional supplements and skin and joint healthcare products.

Viscofan continues making strides in its commitment to sustainability, human rights and the environment as a partner in the United Nations Global Compact. Within this framework regarding the importance of safety and sustainability in our activities, 60% of our manufacturing plants were ISO and OSHA certified for guaranteeing these standards in 2017 and our target for 2018 is to certify 100% of our plants.

Our acquisition of Supralon’s European companies in November 2017 shored up our positioning near the top in the world of plastic casings. While substantial margins are not easily secured in such a highly competitive market, there are nevertheless opportunities for growth and product development that could be combined with the business opportunities of other Viscofan technologies.

In 2017, we grew in terms of revenue in line with the market guide to reach a new high water mark despite the worse-than-expected foreign exchange rates. We also met the growth expectations in terms of operating income and EBITDA, though this growth did not translate directly into net profit, which decreased compared to the previous year because of exchange rate differences.

With our impressive team, today viscofan is a much stronger leader than last year.  We are now 4,554 people in 16 countries. We are a diverse mix of cultures sharing a single passion and spirit of nonconformity, continuous improvement, research and innovation, recognised by the market and our collaborators.

An excellent example of this spirit is the 2017 REDFUE (Red Española de Fundaciones Universidad Empresa) award that we received in recognition of our efforts in research and support for research centres and universities, and with the Administrations of  different countries where our R&D is developed. Thus, encouraging us to continue driving this culture through talent and innovation.

A team capable of harnessing and investing in growth projects with the aim of medium and long-term improvement.

Viscofan boasts a solid balance and operating cash flow generation sufficing to continue improving shareholder remuneration to a total of €1.55 per share for 2017 and has also proposed an extraordinary dividend of 13 cents per share in 2018 against the extraordinary results reported in 2018 resulting from the compensation received from patent infringements.

Viscofan is presently a more agile, more solid, and more effective leader with €75 million in investment projects in 2018 aimed to increase our revenues, EBITDA and net income in conditions of adverse foreign exchange rates and cost inflation. We trust that we will achieve results to continue outpacing the rest of the market and benefit from current and future emerging opportunities for growth in our sector.

On my own behalf and on the behalf of the Board of Directors and the entire Viscofan team, we thank you for your support and trust.
Your faithfully,
José Domingo de Ampuero y Osma