Building for the Future
Total Page：16
File Type：pdf, Size：1020Kb
BUILDING FOR THE FUTURE Devro plc Annual Report & Accounts 2014 2014 HIGHLIGHTS DEVRO IS ONE OF THE WORLD’S LEADING MANUFACTURERS OF COLLAGEN FOOD PRODUCTS Group Revenue* Operating profit Earnings per share Dividends per share before exceptional items* before exceptional items* £232.3m £30.3m 13.7p 8.8p 241.1 242.7 8.8 8.8 232.3 9 8.5 227.7 4 42.1 42.5 42.4 8.0 213.6 20.8 19. 19. 6 7.0 36.2 16. 7 30.3 13. ‘10 ‘11 ‘12 ‘13 ‘14 ‘10 ‘11 ‘12 ‘13 ‘14 ‘10 ‘11 ‘12 ‘13 ‘14 ‘10 ‘11 ‘12 ‘13 ‘14 *Continuing operations, and restated for revised pensions accounting rules (IAS 19R) where relevant. Strategic Report of Financial Shareholder Report Directors Statements Information 2014 Highlights ................................. IFC Directors and Consolidated Income Notice of AGM ...................................... 116 Devro at a Glance ................................. 2 Senior Management .......................... 28 Statement ............................................... 58 Explanatory Notes Understanding Our Markets ........... 4 Corporate Governance Report ... 30 Consolidated Statement to the AGM Notice .............................. 118 of Comprehensive Income .......... 59 Our Strategy ............................................. 6 Audit Committee Report ............... 36 Shareholder Information .............. 122 Balance Sheets ................................... 60 Key Performance Indicators ........... 7 Directors’ Remuneration Directors and Advisers .................. IBC Report ...................................................... 39 Statements of Changes Chairman’s Statement ....................... 8 Directors’ Report ............................... 53 in Equity ................................................... 61 Chief Executive’s Review ................ 10 Cash Flow Statements ................... 63 Financial Review ................................. 14 Notes to the Financial Principal Risks Statements ............................................ 64 and Uncertainties ............................... 18 Independent Auditors’ Corporate Social Report .................................................... 108 Responsibility Report ..................... 22 Financial Summary ............................ 115 devro.com/investors/annualreport2014 Report Strategic Directors Report of Our Markets Our Strategy Devro sells to over 1,500 customers Our strategic objective is to in more than 100 countries in both achieve sustained earnings growth developed and emerging markets. and improve return on capital by growing revenue, improving manufacturing efficiency and product differentiation. Statements Financial Information Shareholder’s P4 P6 How we Operating Operate Responsibly We use our world-class collagen As a global manufacturer, we technology to make consistently take our responsibilities to society better casing. and the environment seriously, and make sure this is reflected in our policies. P2 P22 Investing in the Future Devro is investing in the future of our company at unprecedented levels. P11 & 12 Devro plc Annual Report & Accounts 2014 1 DEVRO AT A GLANCE WE MANUFACTURE CONSISTENTLY BETTER CASING FOR EVERY SAUSAGE TYPE Our mission Operating safely, to provide the world’s food manufacturers with a safe and secure supply of consistently better collagen products, helping them optimise efficiency and enhancing the value of their offering. Our business model Why our business exists The market we are in Devro’s collagen casings are used to manufacture Devro is one of five significant global producers all varieties of sausage. Historically, animal of collagen casings in the world market, with a intestines were used as casings for sausage, but number of smaller local or regional competitors. over the past 50 years the use of collagen casing Additional value is created for the customer by has increased, as it enables food manufacturers collaborating with specialist food machinery to automate production and reduce costs. It is manufacturers and suppliers of food ingredients better suited to contemporary food hygiene to optimise product performance. and traceability requirements, and technical specifications can be determined in advance. What makes us different Devro differentiates itself from competitors What our customers do by developing innovative new products, by Devro’s customers manufacture branded and working closely with customers to enhance their own-label sausage products worldwide, manufacturing efficiencies and by providing reaching consumers through retail and food high-quality technical support to customers. service outlets. Why our customers choose Devro How we create value To satisfy our customers’ demands, we use Devro creates value by converting a basic raw our knowledge of how to manipulate the material, collagen, from the inner layer of cattle complex chemistry of collagen to balance the and sow hides, into a homogeneous gel and requirements of food producers for strength extruding it to tightly controlled dimensions, and size stability with consumer preferences before being compressed and packed for supply for tenderness and bite. to customers. Devro’s manufacturing processes are unique and have evolved over many years of technical development. Who we sell to Devro’s revenue comes primarily from the sale of collagen products directly to food manufacturers and, in some markets, local distributors. Devro sells to over 1,500 customers in more than 100 countries, with a product range in excess of 500 individual items, covering eight principal types of application. Approximately one-third of Devro’s sales are in emerging markets and two-thirds are in developed markets. Over 100 Devro employees work in customer-facing operations as sales and technical advisers. 2 Devro plc Annual Report & Accounts 2014 Report Strategic Our business process Directors Report of Statements Financial Extracting Collagen Applied Technology Information Shareholder’s Collagen used for casing is taken from the hides The production of collagen casing is a complex of carefully selected animals – officially approved technological process. Devro combines expertise for human consumption. and innovation to produce casings that allow our customers to make better sausage. Sales, Marketing & Distribution Manufacture Devro products are sold across all continents Devro is a world leader in the manufacturing in over 100 countries. We sell directly to food technology of this highly sophisticated process. manufacturers and via agents and distributors. Our casings are consistent, reliable and versatile to suit the needs of both sausage manufacturers and consumer preferences. Customer Products to Consumers Reinvesting in Our Business Devro’s innovation and casing performance allow Devro has a successful track record of our customers to produce differentiated products for applied research & development and focused the consumer. Our casings consistently score highly capital investment. for appearance, colour, bite and overall acceptance in independent research and consumer testing. Devro plc Annual Report & Accounts 2014 3 UNDERSTANDING OUR MARKETS A GLOBAL FOOTPRINT IN CHANGING TIMES From our creation over 50 years ago, Devro has evolved into an established leading supplier of edible collagen casing throughout the world. Introduction Increasingly, we are partnering with our The growth in global population is a There have been many improvements customers to develop innovative new key driver, particularly in relation to the in edible collagen casing over the past products for growing market segments. rapid increase in the rate of urbanisation. 50 years; some as a result of technical Consumers are being exposed to a much developments and others as a result of Growth wider choice and better availability of improved plant manufacturing systems. Lower cost opportunities for sausage sausage within the urban environment, The significant investment over many producers and consumer acceptance compared to those who are living in years by Devro has enabled the continue to drive strong demand for rural areas. provision of a unique, modern, safe edible collagen casings. and secure, consistent edible collagen The global population living in an urban casing range. These casings run more Over the past ten years there has been environment has surpassed that of rural efficiently on sausage production lines a steady increase in the global market and is forecast to continue to rise at much higher speeds and produce share of edible collagen casing used in steeply. This urbanisation trend better sausage products that are widely sausage production. contributes significantly towards accepted by consumers. improved living standards and rising Trends incomes which in turn influence the Today, Devro products are sold by There are numerous social and affordability of sausage and processed our dedicated commercial teams, demographic factors that are meat products. in association with our experienced contributing significantly to the growth distributor network, to over 100 in the consumption of sausage, and The improvement in the availability individual markets and are used in the consequently an increased growth in the of sausage and processed meat production of a huge variety of regional use of edible collagen casings, across products gives rise to increased and national sausage types. both developed and emerging markets. average meat consumption across both developed and emerging markets. Maintaining a detailed understanding of our markets and our customers has been, and continues