During 2016, Inapa has made a significant progress in the implementation of its strategic plan for the 2016-2018 triennium.
Inapa solidified its position as one of the most prominent players in the paper distribution sector in Europe by leading the industry consolidation with the acquisition of Papyrus operations in France and the sale to the Papyrus Group of our operation in Switzerland. We have thus achieved a leading position in the important French market, which will allow us to improve the efficiency of our operations and to extend the offer of products and services. At the same time, we have disinvested in Switzerland where our market share made it difficult to achieve the necessary level of profitability of operations.
In the strategic axis of diversification and growth, the highlight was the acquisition of Embaltec, which will allow Inapa to reach 40 million euros of turnover in the packaging business in France, reinforcing the geographical presence in the northern region and allowing strong synergies with the existing packaging operations in this country.
In 2016, Inapa has also made a strong progress in terms of financial sustainability, with a net debt reduction of 20 million euros and an extension of its maturity. At the end of the year, only 28% of the debt was short-term, an improvement of 8 percentage points over 2015.
The paper market fell more than forecasted, a decline of about 6% in the markets where Inapa is present. Inapa’s commercial performance was slightly better than the market, with a marginal market share gain in its most important markets. However, the fall in the market induced more pressure on prices and margins. In this context, we continued with strict operational cost management that partially offset the combined effect of the loss of market volume and the pressure on margins.
In order to counteract the decline in volume, Inapa has entered in new markets where it can ensure a high level of customer services without having to investment heavily in assets. Clear examples are the coverage of the Austrian and Dutch paper markets, taking advantage of the Group’s infrastructure and logistics in Germany. Over the next years, we will be attentive to opportunities to amplify our Group’s presence, geographically, or expanding the products and services portfolio to new markets.
We sought operational efficiency at all levels, having managed to reduce working capital by 11 million euros, a very significant step towards achieving a net debt reduction of 20 million euros.
Inapa has a motivated and enthusiastic professional team, now reinforced with Papyrus France and Embaltec’s teams, which will certainly add great value to our business.
I would like to thank every one of our employees, customers, suppliers, financial institutions and shareholders who contributed to this growth and strengthening of Inapa.