2023 closes with very positive results for the Sofidel Group in terms of sales and margins.
This outcome has been aided by the impact of lower average raw fiber and energy prices than the previous year.
Consolidated sales exceeded three billion for the first time, and margins stood at an EBITDA of 21.11%.
Of particular note is the significant consolidation in the U.S. market, where we recorded an improvement in customer loyalty and a major increase in sales volumes.
The year saw constant adjustment of product selling prices in response to macroeconomic trends.

In the U.S., in order to meet growing market demand, the Circleville (OH) plant expansion project was initiated, which will see the factory increase its production capacity by more than 50% by 2025; in Europe, the position in the German market was strengthened with the purchase of the Hakle (toilet paper), Hakle Feucht (which marked Sofidel’s entry into a new category, moist paper) and Dick&Durstig and Servus (household paper) brands.
Given the need to meet growing demand immediately, at the beginning of the new year Sofidel once again took action on the U.S. market, increasing its production capacity by 65,000 tons per year through the purchase from ST Paper of a paper mill in Duluth, Minnesota, in the Upper Midwest.

Also on the market front, advertising was boosted in all the core Brand markets, while e-commerce equaled, and in some cases in Europe exceeded, the results for 2021, until now the best year ever for the Group in this area.

With regard to environmental sustainability, Sofidel took an important step toward Net Zero: it committed to setting a long-term science-based target to achieve zero greenhouse gas emissions from the entire value chain by 2050. The target must be submitted for validation by the SBTi (Science Based Targets initiative) organization within a maximum of 24 months.

The multi-option strategy to increase use of electricity from renewable sources was implemented: in Spain, with a 10-year Power Purchasing Agreement (PPA) with ACCIONA Energía for the supply of electricity certified as 100% from renewable sources; in Greece, through a 10-year PPA with RWE Renewables Europe & Australia and PPC Renewables for the supply of electricity from a newly built photovoltaic park; in France, through a 10-year agreement with ENGIE for the supply of biomethane produced from organic waste to the Sofidel plant in Roanne. In Sweden, the test phase of the plant built by Meva Energy for the production of bio-syngas from woody biomass from the local supply chain was activated in Kisa. In the UK, the Group joined East Midlands Hydrogen, an industry partnership comprising 44 manufacturers, distributors and users, which works to accelerate development and drive investment in hydrogen.

At the end of the year, Morningstar Sustainalytics confirmed the rating that once again places Sofidel in the “Low Risk” category.

At least two stakeholder engagement initiatives should be mentioned. In the first part of the year, the launch of “Together We Plant the Future,” a three-year bioeconomy pilot project with pulp supplier Suzano to promote socioeconomic development and the conservation and ecological restoration of an area in the Brazil’s Amazon rainforest, in the states of Marañhao and Pará. In the second half, our customer Sainsbury’s became the UK’s first retailer to make the transition from plastic to paper for the packaging of all products (toilet and kitchen rolls) sold under its house brand, saving 485 tons of plastic per year.

The fifth edition was held of the “3SAward” (Sofidel Suppliers Sustainability Award), a prize for the most virtuous suppliers as regards sustainability. Once again, the ceremony was organized in presence in Lucca in the fall.
Sofidel also intensified action to strengthen relations with local communities and institutions, school districts and universities, chambers of commerce, and trade and non-profit associations, in the areas where we operate.

Although the effects of inflation are lessening, they continue to affect the purchasing power of broad consumer segments; the macroeconomic forecasts for 2024 see a slowdown in the economic growth of many countries.
Also of concern is the risk of a further worsening of the geopolitical scenario – linked to the continuation of the Russian invasion of Ukraine, developments in the Israeli-Palestinian crisis and the possible repercussions on world trade of the ongoing crisis in the Red Sea – which could have an impact on commodity prices and on the cost structure more generally.
In this international context of continuing complexity and instability, which must be followed with great attention, Sofidel closes the year by confirming its sustainable growth strategy geared to the creation of shared value, and its intention of implementing an investment policy that, like its investment in Duluth, consolidates profitability, responds to the climate crisis, and promotes the ecological, digital and social transition.