Fazer: about the Group’s transformation in FY-2019

Helsinki / FI. (fg) In the full year 2019, strategy execution and transformation were the top keywords, Finland’s Fazer Group worked with. Christoph Vitzthum, President and CEO of Fazer Group summarises:

«In 2019, we continued executing our strategy of transforming into a modern sustainable food company with a joint direction. We focused on the fast-moving consumer goods (FMCG) and direct-to-consumer businesses with the objectives of strengthening our position as the leading FMCG brand in Finland and building our position in Northern Europe and beyond.

«To focus our efforts in line with our strategy and to streamline our business portfolio, we sold Fazer Food Services to Compass Group and will invest the funds in Fazer Group’s FMCG businesses. We will place the consumer first in all our operations and leverage on our renewed brand positioning – Northern Magic. Made Real. – to be meaningfully different in the eyes of consumers.

«We are The Food Experience Company; we build on our achievements and are supported by our company-wide sustainability approach. Fazer is committed to continuing the innovation of sustainable solutions to benefit people and the planet. Our sustainability core goals by 2030 – 50 percent less emissions, 50 percent less food waste, 100 percent sustainably sourced and more plant-based – guide us in our daily work. During 2019, the systematic work towards our sustainability Core Goals 2030 continued. Sustainability is closely interlinked with our increasing investments into foodtech. Our ability to commercialise significant innovations will play an even more important role in executing our growth strategy.

«Our operating result was close to previous year’s level and net sales increased by 7 percent, despite the challenging market situation. All our businesses grew in 2019. We invested in growth by acquiring Kaslink and by undertaking work to construct a xylitol factory. We also made a decision to double our oat milling capacity. In addition, we planned and executed several initiatives to further improve our profitability. Some of these resulted in one-time costs that reduced our financial result in 2019. As part of our strategic journey, we acquired Vuohelan Herkku, one of the forerunners in gluten-free baking in Finland,in January 2020.

«Fazer is on the move and our strategic journey continues. We will create value through building an even stronger position as the number 1 FMCG brand in Finland, developing leading positions in Northern Europe and beyond as well as accelerating our profitable growth through innovations, on-trend categories and foodtech.»

Financial year 2019 in brief

  • Focus on FMCG business, strengthen our position as the leading brand in Finland and build our position in Northern Europe and beyond
  • Significant investment decisions in growth, innovation and sustainable food production, such as xylitol production, doubling the oat milling capacity and the acquisition of Kaslink
  • Systematic work and progress towards Fazer’s sustainability Core Goals 2030
  • Net sales for the continuing operations increased by 7 percent and reached 1,097.0 million EUR (1,029.2)
  • Operating profit for the continuing operations was 49.1 million EUR (55.9), burdened by one-time restructuring and acquisition costs
  • Net sales and operating profit for the continuing operations in 2018 and 2019 do not include Fazer Food Services that was sold to Compass Group on 31 January 2020
  • Cash flow from operating activities increased to 144.8 million EUR (114.6) and gross investments amounted to 107.1 million EUR (50.5)

Outlook for 2020

Fazer continues its transformation, focusing on the FMCG and direct-to-consumer businesses. The development of Fazer’s business and product portfolios is one of the cornerstones in implementing the strategy, along with the renewed Fazer brand and several growth initiatives. In addition to organic growth, active M+A work will continue to fuel growth and internationalisation. Fazer will also strengthen its competitiveness through value creation programmes and the continuous development of organisational and structural efficiency. In 2020, net sales and operating profit are expected to increase compared to previous year.

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