Business strategy

Focus on profitable growth

Mission and business philosophy

Our mission is to optimise the benefits of packaging in our customers’ value chain.

Our ambition is to be the preferred packaging solutions partner by being recognised as the leader in innovation, reliability and service. The foundation of our business is the ability to build and maintain mutually beneficial long-term relationships with our customers, to develop sustainable and innovative packaging solutions and to attract motivated people.

Business model

The Group manages its operations in three divisions serving six business segments.

  • Branded Products mainly serving Tobacco and Confectionery
  • Barrier Packaging mainly serving Performance Packaging and Flexibles
  • Food Packaging mainly serving General Food & Consumer goods and Food Service

Business is generated by business segment sales teams, sales functions for the local customers and a Key Account Management organisation for the larger customers.

The Group organises its operations into four main processes:

Generate business:
A strategic approach and roadmap is established for each business segment which is supported by a central Key Account organisation and local sales organisations.

Product development:
Product development and innovation focus not only on customers but also end-customers/consumers and their specific needs in order to develop both customers’ and the Group’s business.

Deliver commitment:
The process ensures that the Group delivers the promises made to the customers. This includes delivery of the correct products, systems and services to the right price in a timely manner.

Support:
Corporate functions such as general management, business development, marketing, procurement, finance, IT and others support the Group’s operations.

Overview of the business

AR Packaging is a leading manufacturer of packaging solutions serving especially the food and tobacco markets. The Group designs and manufactures packaging solutions to a broad customer base comprised of large established companies that it has served on a long-term basis as well as a large number of smaller regional and local customers in more than 50 countries globally.

AR Packaging’s main markets are in Europe.

The packaging market and the company’s main end markets have been growing in recent years and the markets have proven to be resilient over the economic cycle. The Group expects to continue growing its business in its strategic focus areas backed by its strong market position and strong customer relationships.

AR Packaging manages its business through three divisions based on the nature of their products and manufacturing footprint among other factors. Each division, with full financial responsibility serves mainly two business segments with distinct business characteristics. The below table presents AR Packaging’s divisions and business segments.

Division* Segment
Branded Products Tobacco
Confectionery
Barrier Packaging Performance Packaging
Flexibles
Food Packaging Food and Consumer Goods
Food Service

*operating segments for reporting purpose. For details see Note 5.

Financial targets

The financial targets of the Company are as follows:

Sales growth: Organic growth above 2%. Additional sales targeted through acquisitions.
Profitability: EBIT margin above 9%.
Capital structure: Net debt to EBITDA ratio of approximately 2 times.

Dividend policy

According to the dividend policy, AR Packaging aims to pay a dividend of 40-60% of the yearly net profit.

Strategy

AR Packaging’s strategy is built on three key elements.

  1. To grow in Europe in its three core segments where the company has a competitive edge.
  2. To expand beyond Europe with selected packaging solutions.
  3. To further improve its operational excellence and cost efficiency.

Growing the European business in profitable segments where the company has a competitive advantage
In its current main market in Europe, the company aims to grow in segments and applications where it has competitive advantage and focus on profitability in other areas of its business. AR Packaging aims to grow its market share in the European tobacco packaging market. In Performance packaging, the aim is to grow by expanding the customer base in Europe. In Flexibles, the company aims to focus on selected parts of the market and selected applications in North-Western Europe.

Expanding beyond Europe with selected packaging solutions
AR Packaging aims to expand beyond its core European markets with selected packaging solutions. In the Tobacco segment, the company aims to pursue both organic and acquisition-­led expansion into Asia and Africa by leveraging its existing strong customer relationships with large established clients. In the Performance packaging segment, the company aims to target both new customers and to expand its share of the existing customers packaging purchases, especially in Asia and North America.

Further improving operational excellence and cost-efficiency
In addition to its growth strategy, the Group aims to further improve its operational excellence and cost-efficiency. AR Packaging also plans to pursue increased plant specialisation and engage in selective investments in key technologies to improve production efficiency. In addition, the Group aims to continue its efforts to review and optimise its manufacturing footprint.