In this quarterly, I would like to take you through the developments in recent months. As you will be used to by now, I will also look ahead a bit. One thing is certain, we live in a time in which developments are coming thick and fast. I am very proud that Audion is an assertive company that responds quickly to events. As such, I would like to start by thanking all my colleagues and dealers for their contributions and our customers for their trust and business.
Overall, we continue to see an increasing order intake. The strategic target markets of food and parts are stable or showing slight increases. In medical/pharma and e-commerce, we are seeing a great interest in – and increased sales of – our products. Sales of validatable vacuum chambers in our strategic target market medical/pharma are striking. We are seeing strong demand for these packaging machines particularly in the North Africa region. We were recently able to deliver another large order to Tunisia. Many companies in the medical/pharma sector are looking for regional production and packaging capacity, which may be found in North Africa.
In e-commerce, we are doing good business with the Speedpack Hybrid. Australia has now become an important geographical market in this regard, but our packaging machines are also increasingly being used in competitive e-commerce environments in the US and a significant number of EU countries.
Construction in Germany
The construction of our site in Germany is progressing well. It is important to mention that we will soon be completely gas-free there. What’s more, within a few years (by 2025) we expect our production and assembly there to be completely energy-neutral.
As before, over the past quarter the shortage of parts has been a challenge that is demanding a lot of our R&D. This shortage has caused a shift in focus from product development to sourcing alternative components and control software and incorporating them into our existing range of machines and related products. The good thing about this situation is that as a company we are becoming more innovative and flexible, and in addition our products are constantly improving. I would venture to say that we have managed to further increase the already very high quality of our machines.
That said, we are not just concerned with improvements to the existing range. I would like to mention two innovations. We are in the final stages of fully integrating thermo transfer overprinters (TTOs) developed in-house into our machines and software. These printers print directly onto the film. Full integration of a product developed in-house ensures higher process reliability. Moreover, Audion can also provide better support for full integration with ERP systems. The second innovation is the conveyor belt developed specifically for the Speedpack Hybrid, which ensures that the product always comes out of the machine with the label facing upwards (the most easily scannable side), with the benefit of increased efficiency.
Product as a service (PAAS) is one of the developments we will be focusing on in the coming quarters. We aim to create an (Audion) cloud environment that will allow us to make better, data-based predictions about validatable packaging quality, output, machine maintenance and material consumption. This is an important step as we move towards a future in which usage matters more than ownership. We are receiving a lot of questions about this shift from the pharma/medical side. This market demands the highest standards in terms of validation, traceability and cleanliness and we want to meet those demands effectively. We see a future in which we are deeply integrated into the customer chain, with the customer no longer buying packaging machines from us but rather the certainty of having so many packagings that meet the highest standards of quality and above all accuracy within a particular time period.
Audion will therefore increasingly move towards becoming a service provider. We have produced an extensive brochure about calibration and validation in medical/pharma, which you can download here. We expect that this shift, and in particular the demand for greater insight based on data, will soon also be observed in our three other strategic target markets.
Investment in second converter
In the previous quarterly, I noted that we produce tubular film and packaging ourselves in Germany in order to respond to increased demand and rising delivery times. Our converter for the production of packaging on rolls is now running at full capacity. Since demand continues to grow, it has now been decided to produce a second converter.
As you have read, we are all doing very well. We are successfully turning challenges into opportunities and our position in flexible packaging solutions is getting stronger. We have started increasing our presence at trade shows again, where we are having interesting meetings with customers and prospects, but also potential dealers. I personally think that having those conversations is one of the driving forces behind Audion’s success. We need to stay in touch with each other, the market and developments. If you would like to discuss this quarterly with me, I would be very pleased to hear from you.
Eugène Tangelder (CEO)
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