Fazer Group: Operational performance was good in 2023

Helsinki / FI. (fg) Financial information in this information is derived from Fazer Group’s consolidated financial statements, which are prepared in accordance with IFRS. The information is unaudited. The 2023 financial statements will be published in week 09|2024.

January – December 2023 highlights

  • Net sales increased by 4 percent to EUR 1,170.1 million (1,122.2). Excluding currency effects net sales increased by 6 percent
  • Comparable Ebitda increased by 35 percent and totalled EUR 137.2 million (101.4), or 11.7 percent (9.0 percent) of net sales
  • Ebitda for continuing operations increased by 13 percent and totalled EUR 123.7 million (109.5), or 10.6 percent (9.8 percent) of net sales. Ebitda includes items affecting comparability totalling EUR -13.5 million (8.1)
  • Comparable operating result totalled EUR 66.9 million (34.4), or 5.7 percent (3.1 percent) of net sales
  • Items affecting comparability in operating result totalled EUR -147.8 (8.1)
  • Operating result for continuing operations totalled EUR -80.9 million (42.6), or -6.9 percent (3.8 percent) of net sales
  • The result for the period totalled EUR -86.5 million (16.2)
  • Cash flows from operating activities almost doubled and amounted to 142.7 million (72.7)

Fazer Group’s Key Figures

(in million EUR or as indicated) 01-12/2023 01-12/2022 Change
Continuing operations
Net sales 1,170.1 1,122.2 4%
Comparable Ebitda 137.2 101.4 35%
Comparable Ebitda margin 11.7% 9.0%
IAC’s in Ebitda* -13.5 8.1 -266%
Ebitda 123.7 109.5 13%
Ebitda margin 10.6% 9.8%
Comparable operating result 66.9 34.4 94%
Comparable operating result margin 5.7% 3.1%
IAC’s in operating result* -147.8 8.1 -1919%
Operating result -80.9 42.6 -290%
Operating result margin -6.9% 3.8%
Result before taxes -85.2 38.2 -323%
Result for the period
Continuing operations -85.9 34.2 -351%
Discontinued operations -0.7 -18.0 96%
Total -86.5 16.2 -635%
Cash flow from operating activities 142.7 72.7 96%
Capital expenditure 45.8 59.9 -24%
Net debt 41.9 78.3 -46%
Net debt to Ebitda 0.2 0.0 829%
Gearing ratio, % 6.2% 9.9%
Return on equity, % -11.8% 1.9%
Equity ratio, % 64.6% 65.4%
Return on capital employed, % -9.4% 4.4%
Earnings per share attributable to owners of the parent, EUR
Continuing operations, basic and diluted -12.86 5.02 -356%
Discontinued operations, basic and diluted -0.08 -1.85 96%
Group total, basic and diluted -12.94 3.17 -508%
Personnel, average ** 4,870 4,990 -2%
Personnel, end of period ** 4,743 4,875 -3%

[*] Items affecting comparability include e.g. impairments of EUR 87.5 million (0) relating to impairment of goodwill of Fazer Lifestyle Foods and the Xylitol factory, impairments and write downs of property, plant and equipment totalling EUR 46.8 million (0), mainly relating to structural changes in oat drinks production and longer than expected ramp-up of the Xylitol factory and EUR -9.6 million (3.3) relating to changes in fair values of open electricity derivatives. [**] All personnel figures are presented as numbers of full-time equivalents (FTE).

Fazer Group’s President And CEO Christoph Vitzthum

«Fazer’s operational performance was good in 2023. Although we encountered a challenging market defined by price-conscious consumers, increasing private label competition, and raw material and salary inflationary pressures, demand for our products remained high throughout the year and our net sales increased by 4 percent. I am particularly happy with the developments in Fazer Bakery and Fazer Confectionery which both showed good growth in 2023. Fazer Bakery net sales increased 7 percent to EUR 462.6 million, and Fazer Confectionery net sales increased 9 percent to an all-time high EUR 505.0 million. Christmas is the most important season for Fazer, and I am pleased that our seasonal offering including gifts, chocolate pralines and bakery products were well received by consumers. Fazer Lifestyle Foods net sales decreased by 9 percent to EUR 237.0 million. The negative sales development was mainly related to dairy sales, a business that we discontinued during the year. Fazer Lifestyle Foods business has also been more severely impacted by rapidly changing consumer preferences and strong competition in 2023.

«In 2023, our comparable operating result clearly recovered from the low levels of 2022 reflecting our good operational performance and a good balance between pricing and strict cost management. Our operating result for the year was heavily burdened by items affecting comparability relating to goodwill impairment of Fazer Lifestyle Foods and the Xylitol factory as well as impairments and write downs of property, plant and equipment due to the structural changes in 2023. During the past years, the plant-based drink capacity in Europe has increased substantially, followed by rapid and unforeseen changes in consumer preferences with price consciousness at its core. This has led to intense competition in the market and private label growth. In order to respond to these rapid changes and to ensure competitiveness, we decided to consolidate the production of our oat drinks and oat-based cooking products from Koria, Finland to our factory in Tingsryd, Sweden.

The ramp-up of our Xylitol factory has taken longer than expected. We started building our Xylitol factory in Lahti in 2019, pioneering an innovation with state-of-the-art technology, with a completely new production process never tested before anywhere in the world, a unique example of a modern circular economy innovation. Adapting such a pioneering innovation into operational production processes has been more challenging than expected. That said, we remain highly committed to developing our xylitol business.

«In the spring, we announced our decision to change the scope of the planned confectionery factory, to cover only chocolate production and to continue production of sugar confectionery in Lappeenranta, Finland. The work to prepare the investment decision continues. An investment of this magnitude requires meticulous planning and analysis, and if realised, this would be the biggest investment in Fazer’s history.

«Our consumer-centric strategy remains more relevant than ever, and we continue to invest in our key strategic priorities to ensure our long-term competitiveness. To deliver on evolving consumer expectations, we seek to, at all moments, understand what drives consumption and where we can matter the most. We remain committed to the sustainability of our operations, holding firm to our strategic priorities and sustainability ambitions. During the year we have been able to progress well in the planning and implementation of our actions to reduce emissions in our operations and in the value chain, reduce food loss in production and work closely with our suppliers and other important stakeholders to advance many strategic sustainability topics.

«Although inflation is slightly slowing down it is expected to remain at a high level and all our businesses will continue to be impacted by the challenging economic environment and fluctuating raw material prices in 2024. I believe the current economic environment will continue to impact private consumption, reflecting a high level of caution and price sensitiveness. Thanks to the strength of the Fazer brand and our ability to respond swiftly to rapid changes, I remain confident that Fazer is well equipped for the future.

«I want to thank all Fazer employees for their strong contribution to Fazer’s good performance, and our customers and other stakeholders for the good cooperation in 2023.»

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