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FAZER-KONSERNIN VUOSIKERTOMUS 2011
www.fazer.com
FAZ
ER G
RO
UP'S A
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UA
L REV
IEW 2011
Fazer VSK selka_ENG.pdf 1 5.3.2012 11.03
FAZER GROUP'S ANNUAL REVIEW 2011
Fazer VSK KANSI_ENG.pdf 1 5.3.2012 11.00
Fazer_vsk2011_ENG_KANSI_CS4.indd 2 5.3.2012 11.24
fazer 201101 53fazer 2011
13Fazer’s mission is to create taste sensations. Our mission is based on high quality and delicious taste, products and services that bring well-being and pleasure, and a responsible way of working.” Read more on page:
Fazer in the Baltic Countrieswww.fazer.eewww.fazer.lvwww.fazer.lt
Fazer Eesti ASKadaka tee 70 DEE-19087 TallinnESTONIAT +372 6 502 421F +372 6 502 455
SIA Fazer maiznîcasDruvas iela 2LV-5001 OgreLATVIA T +371 650 710 40F +371 650 710 60
UAB Fazer KepyklosRaudondvario pl. 129 ALT-47188 KaunasLITHUANIAT +370 37 360 233F +370 37 360 266
Fazer in Norwaywww.fazer.no
Fazer Food Services ASFilipstad Brygge 1NO-0250 OsloPO Box 1375, VikaNO-0114 OsloNORWAYT +47 2389 7900F +47 2389 7901
Fazer in Denmarkwww.fazer.dk
Fazer Food Services A/SSkibhusvej 52 A, 1. PO Box 49 DK-5100 Odense CDENMARKT +45 6311 3310F +45 6311 3320
Fazer_vsk11_sisäk_ENG.indd 2 12.3.2012 12.40
FAZER 2011
‘Fazer aims for international expansion.’ Group President’s review on page 8
IN THIS ANNUAL REVIEW
Fazer in brief
Fazer Food Services
Fazer Bakeries & Confectionery
Fazer in 2011
During the year
Group President’s review
Board of Directors’ report
Strategy
Fazer in Finland
Fazer in Sweden
Fazer in Russia
Fazer in the Baltic countries
Fazer in Denmark
Fazer in Norway
Fazer promotes cultivation of Finnish rye
Taste sensations spread joy
Corporate Responsibility
Personnel
Fazer promotes responsible cocoa sourcing
Gateau stands for great bread!
A visit to Fazerila is never forgotten
Fish strategy for sustainable sourcing
Board of Directors
Group Management Team
Corporate Governance
Consolidated profit and loss account
Consolidated balance sheet
Consolidated cash flow
Five-year summary
Notes to the financial statement
Principles for preparing financial statement
Fazer Group Companies
Notes to the consolidated profit and loss account
Notes to the consolidated balance sheet
Notes to collaterals and liabilities
Addresses
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CONTENTS
Fazer renewed its People Strategy in 2011. The most important areas of the strategy are leadership, performance management and competence development. Read more on page 32
Fazer is a family-owned company. Long-term focus
and profitable growth are emphasised in its
operations.
Read more about corporate responsibility on page 26
Karl Fazer Milk Chocolate, Finland’s most valued brand, is celebrating its 90th anniversary. Read more on page 25
01
FAZER 2011
Fazer in brief
The origins of Fazer Group lie in a family company founded in 1891 when Karl Fazer opened his first café in Helsinki. Today Fazer of-fers food services and bakery and confectionery products, and operates in eight countries.
Fazer Group’s operations are based on passion for customer, quality excellence and team spirit.
Fazer Group has two business areas, Fazer Food Services and Fazer Bakeries & Confec-tionery, which are committed to creating taste sensations.
Fazer Group’s turnover was 1,575.5 million euros in 2011. The number of employees was 15,198 at the end of the year.
Fazer Group has two business areas, Fazer Food Services and Fazer Bakeries & Confectionery,
which are committed to creating taste sensations.
Fazer Group’s turnover was 1,575.5 million euros in 2011. The number of employees was 15,198 at the end of the year.
Turnover by countryFazer Group
Finland 47 % Sweden 24 % Russia 16 % Denmark 5 % Norway 2 % Estonia 2 % Latvia 1 % Lithuania 1 % Others 1 %
Turnover by countryFazer Food Services
Finland 53 % Sweden 27 % Denmark 14 % Norway 4 % Estonia 1 % Russia 1 %
Fazer Food Services 36 %
Fazer Bakeries & Confectionery 64 %
Turnover bybusiness area
Finland 44 % Russia 25 % Sweden 23 % Estonia 2 % Latvia 2 % Lithuania 1 % Others 3 %
Turnover by country Fazer Bakeries & Confectionery
THE GROUP’S TURNOVER WENT UP TO
BILLION EUROS
1.5802
FAZER 2011
Fazer Food Services
Fazer Bakeries & Confectionery
Fazer Food Services is the leading contract catering company in the Nordic countries, offering customers delicious food and tailor-made service solutions. Fazer Food Services has over 1,200 restaurants in Finland, Sweden, Norway, Denmark and Russia. The services of Fazer Food Services include private and public sector personnel res-
taurants, student restaurants, café-restaurants, restaurants at conference and meeting venues as well as food services for schools and public service organisations. Fazer Food Services offers also catering services for special occasions for its customers. Fazer Food Services’ brands are Karl Fazer, Fazer, Amica and Wip, among others.
Fazer is Finland’s and Russia’s leading bakery company, second largest in Sweden’s and one of the leading ones in the Baltic region. Bread and pastries are manufactured in Finland, Sweden, Estonia, Latvia, Lithuania and Russia. Fazer has a total of 19 bakeries. The brands, in addition to Fazer, are Oululainen, Skogaholm, Hlebny Dom, Druva and Gardesis. Bakery prod-ucts are exported to over 15 countries.
Fazer Mill & Mixes in Lahti, Finland, is not only a sup-plier of raw materials to bakeries but also a raw material management, research and development centre. Most of the production of Fazer Mill & Mixes is sold to customers outside Fazer Group.
Fazer is Finland’s leading confectionery company and a strong player in the Baltic Sea region. Fazer’s confectionery factories are located in Finland: in Vantaa (chocolate), Lap-peenranta (sugar confectionery) and Karkkila (chewing gum). Fazer has many strong international confectionery brands, for instance Karl Fazer, Geisha, Dumle, Tutti Frutti, Marianne and Xylimax. Confectionery products are sold in 40 countries.
FAZER FOOD SERVICES HAS OVER
RESTAURANTS IN FINLAND, SWEDEN, NORWAY,
DENMARK AND RUSSIA
FAZER IN BRIEF
03
1,200
FAZER 2011
Fazer in• The Group’s turnover increased by 4.1 per
cent to 1,575.5 million euros.• The Group’s operating profit fell by 7.4
per cent to 54.2 million euros.• The turnover of the Fazer Food Services
business area fell by 1.3 per cent to 567.7 mil-lion euros due to the discontinuance of food service operations in Baltic countries and con-ference operations in Sweden.
• The turnover of the Fazer Bakeries & Confectionery business area increased by 7.4 percent to 1,008.3 million euros. The share of Gateau AB, acquired in the spring, was ca 1 per cent.
• The Group’s cash flow from operat-ing activities was strong and the equity ratio improved.
• The Group’s interest-bearing net liabili-ties went down to 104.7 million euros.
• Return on investment and equity fell slightly from the previous year.
• Fazer sold its catering and restaurant operations in Estonia and Latvia to the local management. The service kitchen in Tallinn was merged into the business of Fazer Food Services Finland.
• Fazer Food Services continued to establish the new restaurant management system and operating model in Finland and Sweden. The development project aims for better competi-tiveness and a more customer-driven approach, standardised core processes and practices of business, reorganised operative functions and uniform offering in accordance with consumer and customer needs.
• The Fazer Way in Production programme, which aims for standardised production proc-esses and continuous improvement of work-ing methods, continued with good results at the Vantaa confectionery factory and bakery and at the Eskilstuna bakery. In addition, the programme was launched at the Lahti bakery.
Uniform standards and new tools were speci-fied for production, and the methods were systematically implemented. Continuous im-provement activities were also implemented at Fazer’s other production units in Sweden, Russia and the Baltic countries, where Fazer Way in Production will be launched full scale in 2012.
• The Group-wide Fazer Way in Sales pro-gramme, which was launched in 2010 to im-prove sales processes and develop sales tools, got well under way in all business units. Many projects, such as private label policy, customer segmentation, field sales and solution selling, re-sulted in concrete measures. The programme will continue in 2012.
• Fazer updated its HR strategy. The new strategy supports the Group’s business strategy, values and the transformation into a more interna-tional and agile company. It focuses on people leadership, performance management and com-petence development. Along with the strategy, the HR structure was also updated.
• Daniil Briman was appointed Managing Direc-tor of Fazer Bakeries & Confectionery Russia and as a member of the business area Manage-ment Team as of 7 February 2011.
• Fazer Restaurants became a business unit in the Fazer Food Services business area.
• Fazer gave up the Fazer Konferens business in Sweden.
• In April, Fazer acquired Gateau, a leading Swed-ish manufacturer of artisan bread and confec-tionery products. The purpose of the acquisition was to respond to an increasing demand for hand-baked fresh bread and high-quality sweet bakery products.
• Fazer continued to simplify its legal structure and decided to separate the legal and opera-tional structures of the Group companies.
• Fazer closed its bakeries in Seinäjoki and Turku. The decision was related to the reorganisation
of the bakery and delivery network from the perspectives of efficiency and competitiveness.
• Pekka Rantala was appointed Managing Dir-ector of the Fazer Bakeries & Confectionery business area and as a member of the Group Management Team as of 1 September 2011.
• Mika Videman was appointed SVP, Human Re-sources of Fazer Group and as a member of the Group Management Team as of 1 August 2011.
• Teija Andersen and Pekka Heinänen left Fazer in July 2011.
• Markku Numminen left Fazer at the end of 2011.
• Fazer decided to implement the Fazer cor-porate identity in Russia as well, where the company has until now operated under the name Hlebny Dom. The change will take place in 2012. Hlebny Dom will remain as a consumer brand.
The Fazer Way in Production programme continued with good results.
04
FAZER 2011
140120100806040200
-20
2007 2008 2009 2010 2011
800
600
400
200
0
2007 2008 2009 2010 2011
25
20
15
10
5
0 438,8 780,1 729,3 720,9 684,3
12,1 23,2 6,1 9,0 8,0
600
500
400
300
200
100
0
2007 2008 2009 2010 2011
25
20
15
10
5
0 421,7 510,3 511,0 533,7 540,3
6,9 19,9 2,9 7,3 5,3
140
120
100
80
60
40
20
0
2007 2008 2009 2010 2011
54,7 18,3 118,0 117,7 92,1 51,2 135,0 44,5 58,5 54,2
11,6 90,4 0,1 0,8 39,6 44,6 45,5 58,4 53,4
-1,0
200180160140120100806040200
2007 2008 2009 2010 2011
78,3 182,4 168,8 70,0 68,7
70
60
50
40
30
20
10
0
2007 2008 2009 2010 2011
64 47 53 54 58
200
160
120
80
40
0
-40
-80
2007 2008 2009 2010 2011
-55,0 107,4 155,3 110,5 104,7
1600
1400
1200
1000
800
600
400
200
0
2007 2008 2009 2010 2011
1192,6 1159,7 1441,1 1513,6 1575,5
The Group’s turnover increased by 4.1 per cent to 1,575.5 million euros.
FAZER IN 2011
Turnover Operating profit Cash flows from operating activities
Capital employedand profitability
Shareholder’s equityand return on equity
Capital employed Return on investment (ROI)
Shareholder’s equity incl. minority interest Return on equity (ROE)
Non-recurring items Operating profit without non-recurring items
Gross investments Interest-bearing net debt Equity ratio
Fazer Confectionery Fazer Bakeries Fazer Food Services
05
FAZER 2011
AprilFollowing Fazer’s over 100-year-old tradition, Fazer sent Finlandia marma-lade as a wedding gift to the Royal Wedding in England.
January Fazer Ruispuikula became the first bread in Finland to get a carbon footprint lable.
June Consumers in Finland continued to write their Fazer related memories in the ‘Tales of taste’ digital history created for Fazer’s anniversary year.
In June, Fazer’s Murinsky bakery in St Petersburg reached a record in occupational safety: one million hours of safe work. Also the Smolenskaya bakery in St Petersburg reached the same record in August 2011.
The classic Skogaholmslimpan loaf, loved by all Swedes, turned 85.March
Skogaholm’s new mini cinnamon bun Godingar was a big success in Sweden.
The visitor area at Fazer’s confectionery factory in Vantaa was renewed. It receives over 45,000 visitors every year.
Tyrkisk Peber was chosen as Sweden’s most popular liquorices product.
MayFazer was the best brand among youth in the National Youth study done in Finland.
Fazer started to tweet in Finland.
FebruaryTomas Diederichsen from Fazer Food Services won the distinguished Cook of the Year title in Sweden.
Th l i Sk h l li l f l d b ll
JulyThe new Tutti Frutti Holiday mix was launched for the summer season.
Karl Fazer Bakery, offering freshly baked bread, opened at Karl Fazer Café in Helsinki.
The new Druva Makonmaize was chosen as the most successful new consumer product in Latvia.
Fazer Food Services topped, for the 6th year in a row, the image survey of contract catering companies in Sweden.
Fazer’s bakery in Latvia got a Bronze diploma in the Sustainability Index, which rates companies’ performance in respon-sible business.
During the year
Fazer’s successful product from Sweden, Fazer Frökusar, was launched in Finland as Fazer Alku Jyväpala.
Fazer’s ‘Little Swedish breads’ were launched I Russia. In August, the prod-uct was awarded as the most innovative product of the year.
06
FAZER 2011
Fazer provided meals for all families in SOS Chil-dren’s Villages in FInland in honor of UN´s Universal Children’s Day.
Fazer was the most popular employer among young professionals in Finland according to Univer-sum Young Professionals 2011 study.
SeptemberFazer turned 120 years on the 17th of September.Fazer’s new stakeholder magazine F, which focuses on well-being, was launched in Finland.
October A new Fazer café was opened at the City Center in Helsinki.
Fazer’s fan base in Facebook passed the 200,000 mark in Finland.
Fazer’s Swedish ‘Fazer Culinary Team’ was chosen to compete in the Culinary Olympics in Erfurt, Germany in 2012.
December Fazer’s blog ‘A piece of Fazer’ was opened in Finland.
Gardesis products received as many as four Lithuanian Product of the Year 2011 awards.
Russian Fazer fans, winners of the ‘Fazer- It is Delicious’ competition organized for Fazer’s 120th anniversary, visited Helsinki and Fazer’s factory in Vantaa.
In honour of its anniversary, Fazer sponsored an educational and touristic route Path of Joy in Kaunas, Lithuania.
August The 120-year-old Fazer invited over 5,000 customers to a family event at the Helsinki Zoo, Korkeasaari.
DURING THE YEAR
NovemberFazer’s kindergarten at the Vantaa factory turned 60.
Fazer’s Local bakeries renewed their concept and look. Local bakeries offer freshly baked bread in over 30 Prisma and K-Citymarket markets in Finland.
Karl Fazer and Fazer were again the most appreci-ated brands in Finland.
Fazer’s restaurant at Storebrand head quarters in Norway was the first stand-alone restaurant to receive a Miljøfyrtårn eco-certification.
Fazer Food Services in Finland and Sweden decided to increase the amount of eco certi-fied products in their assortment and join the Portaat Luomuun programme for professional kitchens in Finland.
07
FAZER 2011
Fazer aims for international expansion In 2011, Fazer celebrated its 120th anniversary with customers, consumers and staff. Fazer invited stakeholders to join in the celebration and share their stories about Fazer through various events, contests and products. The company strengthened its position in its main markets in a challenging operating environment and continues to grow towards international markets.
In 2011, the changed market conditions af-fected Fazer mainly through higher prices of the most important raw materials (such as flour, fish and dairy products), instability of the financial market and signs of uncertainty
in consumer behaviour. In addition, Fazer’s busi-ness was affected by the confectionery tax im-plemented in Finland at the beginning of 2011. Its effect on consumer prices was 13 per cent, and total consumption of confectionery fell slightly.
‘The instability of the world economy may sound like a cliché by now, but it is a fact that has considerable effects on many sectors and markets. Therefore, I’m very proud to state that we have succeeded in strengthening our position in all of our main markets,’ says Karsten Slotte, President of Fazer Group.
In 2011, Fazer Group’s turnover increased by ca four per cent year-on-year, and good profitability continued. The best overall results were achieved in Russia, where the market position and result developed favourably. In particular, Fazer grew in the fresh bread segment in the Moscow area. In Finland, Fazer strengthened its position as the market leader in the bakery and confectionery market and maintained its leading position in catering services. Fazer’s business in Sweden de-veloped according to plan. Once again, the big-gest challenges were faced in the Baltic countries, due to the market conditions.
Karsten Slotte stresses that when the op-erating environment changes, you must focus on the most important business operations. ‘Partly for this reason, we decided to give up our cater-ing business in the Baltic countries and confer-ence services in Sweden.’ Karsten Slotte identifies strong brands and high-quality products and services as Fazer’s success factors. Such products and services can be created and developed only by committed, competent employees.
‘Appreciated brands are becoming more and more important in the world. In order to suc-ceed, we must always be able to respond quickly to consumers’ needs with innovative high-quality products and services. Moreover, we must boost our international growth,’ he explains.
Renewal of the Group strategy and the supporting development projects progressed in 2011. Fazer is aiming to speed up its international expansion outside the main markets. Experts of international business strengthened the Group Management team.
The group-wide development programmes, Fazer Way in Production and Fazer Way in Sales, develop common ways to work for production, promote a culture of continuous improvement and build a foundation for more extensive inter-national business.
‘With common ways to work, processes and tools, we believe that we will create a solid basis for our business. We have made progress: waste has decreased at the Vantaa bakery, and the implementation of common tools has made working areas more pleasant and improved oc-cupational safety. The new management model in catering services has facilitated the planning of operations by improving the predictability of busi-ness. Systematic sales development has boosted our confectionery sales and improved profitability in Fazer Food Services and our Swedish bakery business,’ Karsten Slotte says. Changing consumption habits pose a chal-lenge to the entire food industry. Karsten Slotte sees rapid changes as a phenomenon that is here to stay.
I’m very proud to state that we have succeeded in strengthening our position in all of our main markets.”
08
FAZER 2011
‘We are competing with the diversity of con-sumption. Consumers expect new solutions and concepts instead of mere products and services. They are particularly interested in healthy food, in-dividual diet choices, the origin of food, the absence of additives, local raw materials, ecological aspects and convenience. Continuous dialogue with our consumers is necessary in order to respond to their wishes and to keep up with trends. We must develop new concepts and innovative products. Furthermore, we must act quickly and anticipate changes. Therefore, we must be familiar with the local food culture and be experts in well-being and taste sensations in our market areas,’ he outlines.
As an example, he mentions a successful ac-quisition in Sweden. ‘By acquiring the prospering Gateau bakery company, we increased our of-fering of popular, high-quality artisan bread. We have expanded our local bakery operations also
We must develop new concepts and innovative products.”
in Finland, because demand for local bakery prod-ucts continues to grow.’
Karsten Slotte believes that Fazer is well equipped for international success. In catering services, the focus is on North European markets and increasing other sales besides lunches. In the bakery business, particularly high growth potential is seen in Sweden and Russia. The confectionery business is seeking faster growth outside Finland, especially in Asia.
Amid all the changes and growth goals, Karsten Slotte stresses company values and the importance of good management.
‘In a company like Fazer, management of people is extremely important. Our success depends on the individual, and we have staff in many different countries. In addition to manage-ment, we are going to deepen the significance
of values in our daily work. Company values and responsibility are central elements in recruitment. It is becoming more and more important for job seekers that the potential employer’s values match their own. In 2012, we will invite the entire staff to take part in a values discussion in order to develop a mutual understanding of our values.’
According to Karsten Slotte, Fazer is well prepared for the future. ‘We have great potential for success in 2012: we have excellent, committed experts, a stable financial status and highly ap-preciated brands.’ He says that now the potential for success is even better than in many years, providing that the employment rate and purchas-ing power remain the same. ‘Thanks to systematic work, our organisation is in fine condition, and the owners are highly committed to the develop-ment of the company. We can look to the future with confidence,’ he summarises. F
GROUP PRESIDENT’S REVIEW
09
FAZER 2011
Fazer continues to grow in a challenging market situationThe general state of the European economy and the conditions in food product markets were both challenging in 2011. The greatest challenges for the food industry were the introduction of the sweets tax in Finland, higher prices for raw materials, the low-carb diet trend in Finland and Sweden, and price competition within the bakery industry in the Baltic countries.
espite the depressed market situation, Fazer continued to strengthen positions in the com-pany’s main markets.
Bakery business in Russia, and mill operations in Finland, developed favourably. Although the development was weaker in Swe-den and Finland, Fazer strengthened positions in these markets. The situation in the Baltic coun-tries was the most challenging. In Finland, two bakeries were closed during the year. Fazer also opened 11 local bakeries and bakery shops, and acquired 20 in Sweden and Finland, in order to meet consumer demand for unpackaged fresh bread of the highest quality. Within Fazer’s con-fectionery operations, the Group strengthened positions in Finland, Sweden and Travel Trade (airport and ferry sales). Due to innovative new product launches, robust sales and marketing measures and improved internal processes, Fazer succeeded in increasing market shares in spite of the weaker market situation.
Measures launched in 2010 to develop and increase the efficiency of contract catering opera-tions produced good results for catering services in Sweden and Finland. Business also continued to develop positively in Norway and Denmark. Operations in the Baltic countries, and the con-ference operations in Sweden, were sold during the year.
In addition to development projects that were carried out in business units, certain Group func-tions were strengthened and improved to sup-port Fazer’s target-driven growth and improve profitability.
DResults and financial position
The Group’s turnover increased by 4.1 per cent and totalled 1,575.5 M€, compared to 1,513.6 M€ in 2010.
Growth in net sales was relatively strong-est within mill operations, but was also robust within bakery business in Russia and restaurant activities in Finland and Sweden. Slightly less than one-third of the Group’s growth was attribut-able to the strengthening of the Swedish krona against the euro. Turnover declined as a result of intense price competition, especially in the Baltic countries, the trend against carbohydrates and the sweets tax introduced in Finland in the begin-ning of 2011. The net effect on the turnover of acquired and divested operations was -7.3 M€.
The Group’s operating profit amounted to 54.2 M€, compared with 58.5 M€ in the previ-ous year. Profit for the 2011 financial period was 21.3 M€ (31.7 M€ in 2010). The profitability of the Group’s catering business and parts of bakery operations developed well but was considerably lower than last year’s level of profitability for bak-ery and confectionery operations in Finland and the Baltic countries.
The Group’s financial position is strong. Net interest-bearing liabilities decreased and totaled 104.7 M€ on the balance sheet date (110.5 M€ at year-end 2010). In January 2011, Fazer signed a five-year loan agreement in Finland and in Oc-tober in Russia. The Group’s equity ratio was 58 per cent (54 per cent 31.12. 2010) and gearing was 19 per cent (21 percent 31.12. 2010).
Cash flow from operating activities was 92.1 M€ in 2011 (117.7 M€ in 2010). Gross invest-
ments amounted to 68.7 M€ (70.0 M€ in 2010). The greater part of gross investments consisted of expenditures primarily for new production equipment and to upgrade existing facilities used within bakery and confectionery operations. KEY FIGURES 2011 2010 2009
Turnover, M€ 1,575.5 1,513.6 1,441.1
Operating profit, M€ 54.2 58.5 44.5
− share of turnover, % 3.4 3.9 3.1
Return on equity %, (ROE) 5.3 7.3 2.9
Equity ratio (%) 58 54 53
Gearing, % 19 21 30
Balance sheet total, M€ 933.3 981.8 966.9
Personnel
On December 31, 2011, Fazer Group had 15,198 employees (16,573 in 2010). At year-end, 122 people (107 in 2010) were employed by the Group’s parent company, including employees working in mill operations.
NUMBER OF EMPLOYEES 2011 2010 2009
Number of employees 31 Dec 15,198 16,573 16,768
Number of employees (FTE) on average for the year 13,865 14,294 14,690
Research and development Innovative product and service solutions are needed to allow Fazer to remain a leader in its areas of operation. As a means for this, Fazer has formed a research group and started its own re-search programme. The research programme is focused on rye, cocoa, carbohydrates and xylitol-based products. Research on rye and cocoa is al-
10
FAZER 2011
BOARD OF DIRECTORS’ REPORT 2011
ready starting to produce interesting preliminary results. In addition, Fazer is engaged in international research projects and studies, as well as partici-pating in international networks. In collaboration with the Group’s marketing function, research and development has developed the innovation proc-ess in a more consumer-driven direction in order to make new product and service development efforts more efficient. Within the framework of the Group’s strategy, resources are being increased for research in priority areas. Research and develop-ment costs for Fazer Group amounted to 5.0 M€ in 2011 (4.1 M€ in 2010).
Quality, environment and corporate responsibility
Corporate responsibility is a strategically import-ant, visible and integrated part of Fazer’s business activities. Fazer’s corporate responsibility is guided by the company’s corporate responsibility policy and environmental policy, the Group’s other management and operating principles, and Fazer’s ethical principles, which are based on the ten in-ternational principles of the UN Global Compact.
Corporate responsibility is an inseparable part of Fazer’s brand and corporate identity. Fazer’s goal is to offer stakeholders products and ser-vices that fit a responsible lifestyle. Fazer aims to guide consumers and customers so they can use Fazer’s products in a responsible way and work together with their stakeholders for sustainable development.
In bakery and confectionery operations, Fazer implemented a new system to assess how con-sumers experience quality. In 2012, a standard-ised management system will be developed for food safety.
The Fazer and Karl Fazer brands maintained their positions as the most appreciated brands in Finland. The survey clarified what the Finn-ish people think of 1,100 brands. In February 2011, Fazer was the first company to introduce a carbon footprint label on the packaging of the Puikula rye portion bread in Finland. For more information about Fazer’s corporate responsibility, please see pages 26–31.
Risk management
Within the framework of the corporate risk management policy, Fazer regularly evaluates and analyses the Group’s strategic, operative and fi-nancial risks. Group companies have defined their most important risks, developed action plans to
reduce them and made progress in realising these plans. The most substantial risks for Fazer Group are related to activities conducted in developing markets. Other major risks are potential disrup-tions to the production and supply chain, changes in the customer and supplier chain, as well as risks associated with substantial price fluctuations for the most important raw materials. The Group’s financial risks and risk of loss were managed in line with the policy adopted by the Board of Directors.
During 2011, Fazer reorganised the Group’s cash management and risk management functions and intensified its follow-up of plans and measures to reduce risks.
Changes in Group structure
Fazer continued to invest in core businesses. In addition to making structural investments, Fazer acquired Gateau AB, an artisan bakery business in Sweden. The acquisition strengthens Fazer’s posi-tion in the Swedish market for high-quality artisan bread. In Finland, Fazer expanded its position in the bakery shop segment by acquiring eight local bakeries and opening five new ones.
This sharper focus on core business also entailed the divestment of certain non-core op-erations. Catering services in the Baltic countries were sold to the executive management in Latvia. The production kitchen in Tallinn is continuing to operate within a new company, Fazer Food OÜ. In Sweden, Fazer Food Services AB sold its conference catering services to the executive management.
Additional measures were carried out in 2011 to simplify the Group’s structure. A total of six Group companies were dissolved or merged in Finland, Sweden and Russia to reduce the amount of administrative work and expenses, and to shift the focus from the legal structure to the opera-tive business organisation. See page 48 for more information on changes to the legal structure.
Shares and share capital
At the end of 2011, the parent company had 3,958,763 preference shares and 2,365,200 ordi-nary shares. Preference shares carry a preferential right of at least 6 per cent of the share’s nominal amount ahead of ordinary shares for the annual dividend from the company’s distributable profit. At the Annual Shareholders’ Meeting, each or-dinary share is entitled to ten votes and each preference share carries one vote.
Administration and auditors
At the Shareholders’ Meeting on 22 March 2011, the meeting re-elected the following Board mem-bers: Berndt Brunow (Chairman), Klaus Cawén, Anders Dreijer, Ketil Eriksen, Fredrik Fazer, Leif Hagelstam, Johan Linder and Juhani Mäkinen.
Karsten Slotte is Managing Director of Oy Karl Fazer Ab and President and CEO of Fazer Group. In 2011, the Group Management team was renewed considerably and it now consists of six members. See page 39 for more information.
Chartered Accountants Pricewaterhouse-Coopers were chosen as auditors, with Char-tered Accountant Kim Karhu as auditor-in-charge.
Outlook for 2012
The economic uncertainty is expected to con-tinue in Europe. Raw material price increases are not expected to be as severe as in 2011, even if the market may be volatile. Tough price competi-tion is expected to continue as the purchasing power of consumers weakens. Fazer aims to fortify market positions, develop operations and achieve profitable growth.
In 2012, Fazer will update its strategic agenda based on the business environment. The goal is to create competitive advantage through leading brands, efficient business processes and an agile organisation. This will enable profitable growth within new product and service categories and build the platform for internationalising opera-tions in growth markets. During the year, Fazer expects to increase turnover and improve the Group’s profitability.
Proposal for distribution of profit
The parent company’s distributable funds amount to 391,955,488.71 euros, of which 26,417,514.66 euros represent profit for the financial year.
The Board of Directors proposes to the Shareholders’ Meeting that distributable funds should be appropriated as follows: • to pay a dividend of 3.00 euros/ share, i.e. a total of 18,971,889.00 €• to leave in profit brought forward 372,983,599.71 € 391,955,488.71 €The proposed dividend does not pose any risk to the company’s financial standing. F
11
FAZER 201112
FAZER 2011
STRATEGY
azer Group remodelled its business strategy in 2011. The new strategy is based on profitable growth and expan-sion. Fazer is building sustainable com-petitive advantage through innovative
use of brands and a standardised operating model. Fazer is going to expand by entering new market areas and launching more added-value products and services.
‘Fazer’s mission is to create taste sensations. Our mission is based on high quality and delicious taste, products and services that bring well-being and pleasure, and a responsible way of working,’ says Karsten Slotte, President of Fazer Group.
Fazer has systematically promoted its develop-ment projects that support growth and inter- nationalisation. Through these projects, Fazer aims to standardise its working methods and proc-esses and improve the efficiency of sales opera-tions and distribution channels in all the countries where the company operates. ‘We are both a local and an international player. Joint goals and operating models are the only key to success and efficiency,’ Karsten Slotte outlines the situation. ‘A uniform offering and consumer experience in all markets, strong brands and competent, motivated
Fazer employees are essential for the achieve-ment of our strategic goals.’
Karsten Slotte stresses that good manage-ment and ensuring the staff ’s competence and motivation are the key to achieving the strategic goals. Fazer’s organisation has been remodelled to support the joint goals.
Karsten Slotte believes that achieving the goals requires courage and a strong forward lean.
‘Entering new markets is not new for us. It was 120 years ago that Karl Fazer boldly went out into the world, looking for new opportun-ities. This kind of spirit is what we need today in order to grow in new markets. We must assume a more consumer-driven approach in product development and find innovative ways to use our strong brands, because they still have plenty of unexploited potential,’ he says.
Consumers expect concepts that provide more added value, promote health and well-being and are natural, genuine and easy to use. ‘For Fazer, this means that we need a standardised and more efficient operating model. It can involve more extensive use of subcontractors, as well as licensing, which we have already done with Fazer branded ice-cream,’ Karsten Slotte explains.
International bakery strategy ensures growth
Quick changes in the bakery industry have fuelled the drafting of a uniform, international bakery business strategy for Fazer. Russia in particular constitutes a growth area for the bakery business, but there is growth potential also in Finland and Sweden in products that provide higher value to consumers. ‘We aim to offer consumers an explicit range of bakery products for different occasions – everyday use and celebrations,’ says Pekka Rantala, Managing Director of Fazer Baker-ies & Confectionery business area. ‘Success in the bakery industry requires skilful product portfolio management and continuous improvement of product development and distribution channels. We are also investing in business growth areas, such as the frozen product business and local bakeries.’
The acquisition of the Swedish company Gateau in 2011 was a natural continuation of Fazer’s strategic goal to increase its offering of high-quality, hand-baked bakery products. ‘Gateau in Sweden and the expansion of local bakeries in Finland are our response to the increased de-mand. They also take us closer to the consumer. In
Fazer aims for growth and international marketsFazer’s strategy aims for profitable growth through strong brands, a winning operating model and expansion. By 2016, Fazer is going to be an international company that is successful and highly valued also outside its current main markets. This requires commitment to common goals and continuous improvement of business operations together with all Fazer employees.
Entering new markets is not new for us. It was 120 years ago that Karl Fazer boldly went out into the world, looking for new opportunities.”
F
13
FAZER 2011
Brand value
Skills andcompetencies
Workingcapital
Fixedassets
Superior, measurable valuecreation and cash flow
Subcontractor network and licensing
High brand value not utilized fully
Production and product focused competence
Workingcapital
Investments into fixed assets
2012, we aim to go international with these two local bakery concepts,’ Pekka Rantala continues. Another strategic goal in 2012 is to strengthen the market position in Russia. This means increas-ing the market share in Moscow and retaining the leading position in the St Petersburg area.
The Fazer Way in Production development programme, launched in the latter half of 2010, aims to establish standardised working methods in production and to develop a culture of con-tinuous improvement. ‘Consumer and customer needs are the basis for everything we do. Each phase of our work must meet our customers’ expectations. Fazer wants to be the fastest de-veloping and most efficient high-quality bakery company in the Nordic countries, the Baltic States and Russia. Fazer Way in Production is a key element in achieving these goals,’ Pekka Rantala summarises.
Confectionery business becomes more international
Fazer’s strategic goal is to also increase its con-fectionery business at a faster pace outside the main markets.
‘Fazer’s confectionery products are now being sold in nearly 40 countries around the world. In airline and ferry traffic and airport travel trade, Fazer is the Nordic market leader and a strong player worldwide. This is an excellent springboard for us to reach new markets. The focus of growth is on Asia, where chocolate consumption is grow-ing faster than anywhere else. We have already launched Moomin chewing gum in Japan, and our confectionery business will expand into China in summer 2012. In addition, we are anticipating great international interest in the Angry Birds confectionery to be launched in June,’ Pekka Rantala explains.
‘We have great potential for international suc-cess. Our high-quality products provide consum-ers with unique taste sensations, our brand port-folio is strong, our employees are competent and committed and have a positive attitude to change. These are our three key elements of success in the bakery and confectionery business, and that
The wishes of consumers and customers are the basis for everything we do.”
Offering
Processes
Operations
People
Focus on leading brands
Expansion in higher value products and
services
Expansion in growingmarkets
and segments
STRATEGIC CORNERSTONESProfitable growth of business by building
Sustainable advantage Continued expansion
Consumer-driven innovation for products and services
Continuous improvement and LEAN operations
WINNING BUSINESS MODEL CREATING VALUE, FOCUSING ON CUSTOMER & CONSUMER NEEDS
From operation focus to consumer focus
PEOPLE WILL MAKE THE DIFFERENCE!
Build a winningoperating
model
Foundation
New business concepts
14
FAZER 2011
STRATEGY
is why we will systematically and resolutely focus on them,’ he summarises.
Contract catering business grows beyond lunch
Fazer Food Services aims to grow profitably and to also identify growth opportunities outside its home markets in Northern Europe. ‘We aim for one million daily encounters with custom-ers,’ says Iris Karjula, Managing Director of Fazer Food Services business area.
Fazer Food Services has honed its man-agement and operating model to support the strategic growth goals and the increase in in-ternational business. Iris Karjula says that joint processes, tools and best practices have laid a solid foundation for growth in catering services. ‘We are particularly seeking growth in services outside lunch hours. We offer our customers new choices for breakfast, conference catering, snacks and takeaway products. In addition, we are investigating our opportunities for growth in places where many people pass by every day,’ Iris Karjula describes.
The strengths of Fazer Food Services include a good company image, committed food indus-try professionals and best practices. ‘Nutrition is extremely important for our well-being. That
is why we pay special attention to the varied composition and healthiness of our meals,’ Iris Karjula explains.
‘We make it easy to choose a healthy and delicious meal. We are continuously improving our products and engage in an open dialogue on nutrition with our stakeholders.’
Monitoring the implementation of the strategy
In the latter half of 2011, Fazer modified its management model to better support the im-plementation of the strategy and the increase of added value for shareholders. The Fazer Performance Management project covers all the business units and functions in the Group and will be completed by the end of 2012. ‘The new management model ensures that all the business units, functions and their employees know their role in the implementation of the strategy.The achievement of operational goals will be monitored with clear indicators. In the future, we will be able to give stronger priority to certain initiatives, better focus our resources and postpone or cancel undertakings which do not support our strategy or have minor signifi-cance in it,’ says Deputy CEO of Fazer Group Jouni Grönroos. F
MISSIONOur mission is to create taste sensations.
VISIONFazer is the best choice.
VALUES Passion for customer: We always strive to exceed our customers’ expectations.Quality excellence: Responsibility in everything we do.Team spirit: We work together, respecting each other.
ETHICAL PRINCIPLESFazer’s ethical principles are based on the Group’s values and the international principles of the UN Global Compact. The ethical principles guide Fazer’s employees in their daily work and also define the Group’s ethical responsibility as a company and as an employer.
15
FAZER 2011
2011Fazer strengthened its position as the market leader in FinlandFazer was successful in Finland in 2011. It strengthened its position as the market leader in the Finnish bread and confectionery market and retained its position in the catering service business. High-quality products and services and strong brands performed well despite challenging times.
Bakery business in a solid position in Finland
Fazer’s market share in the Finnish bread market increased while the bread market fell by about four per cent. Fazer performed well in its larg-est market segment, packaged fresh bread, being the market leader in all product subcategories. The frozen product business developed in line with the market. The turnover of Fazer Mill & Mixes exceeded expectations, increasing by over 30 per cent.
Pekka Rantala, Managing Director of Fazer Bakeries & Confectionery business area, believes that the bakery business will continue to be successful. ‘We are firmly rooted in the Finnish bakery market, and we have good potential for continuous growth in our successful product seg-ments,’ he states.
Changing consumption patterns have shat-tered the food industry throughout Finland, and they have also had an impact on Fazer’s busi-ness. Consumers are increasingly favouring locally
baked bread. Fazer has responded to consumers’ wishes by opening 13 new local bakeries in dif-ferent parts of Finland.
‘During the year, we had to close our baker-ies in Turku and Seinäjoki. However, Fazer’s 38 local bakeries employ 270 local professionals and are closer to the consumers. At the local bakeries, most of the products are baked right under consumers’ eyes. Our goal is to have 50 local bakeries by 2015, employing more than 300 people,’ explains Petri Kujala, Managing Director of Fazer Bakeries Finland.
Fazer has decided to invest in its milling busi-ness and will build a new oat mill in Lahti. The building of the mill will begin in spring 2012, and the new mill is expected to be completed
in 2013. Fazer is a member of the Pro Rye as-sociation, which aims to efficiently promote the cultivation of rye in Finland. Fazer’s goal is that by 2016 it is using only Finnish rye for its Oululainen rye bread.
Fazer implemented a new test to measure consumers’ experience of quality. The test analy-ses the quality of bakery products sold at grocery stores. Fazer has prepared a sample prototype of each product, and the appearance, taste, texture and package of products on grocery store shelves are compared with the prototype.
Fazer Confectionery strengthened its position and increased its turnover
Fazer’s position as the market leader in the Finn-ish confectionery market continued to strengthen in 2011. Once again, Finns chose Karl Fazer Milk Chocolate as the most valued brand in Finland in 2011, and the Fazer brand came second. In par-ticular, sales of chocolate products and Christmas specialties increased in Finland.
The sweets tax implemented at the beginning of 2011 increased consumer prices by nearly 13 per cent, and the confectionary market fell by approximately five per cent. Fazer’s production volume decreased by 3.5 per cent.
‘We are worried about the effects of the sweets tax on our business. A tax directed at confectionery, soft drinks and ice-cream is unfair
Dark chocolate grew in popularity. Fazer launched a novelty which combines pear, sliced almond and rich dark chocolate.
FAZER DARK CHOCOLATE ALMOND AND PEAR
Our goal is to have 50 local bakeries by 2015, employing more than 300 people.”
16
FAZER 2011
and distorts competition. It is unfortunate that the government did not act in line with the gov-ernment programme, which would have meant extending the tax to other similar product cat-egories,’ says Tom Lindblad, Managing Director of Fazer Confectionery.
Renewal brought success to Fazer Food Services
Fazer Food Services improved its profitabil-ity and retained its market leader position in Finland. The success was based on improved efficiency, resulting from renewed operating models. The economic uncertainty began to have an impact on the catering service business after the summer, but business was still good in the autumn.
In 2011, Fazer Food Services focused on es-tablishing the new management model and joint working methods implemented in 2010. The new management policy, based on daily key indicators, improved the predictability of restaurant business.
‘Sales have increased particularly in food services outside lunch hours. There is still growth potential in breakfasts, snacks and takeaway prod-
ucts and meals. We are also investigating growth opportunities in city areas where many people pass by,’ says Iris Karjula, Managing Director of Fazer Food Services business area.
Healthiness and well-being are the current trends in catering services. ‘Restaurant guests are very health-conscious and interested in well-being, the origin of food and pure ingredi-ents. There is demand for high quality, first-rate products, which are exactly our strengths,’ says Jaana Korhola, Managing Director of Fazer Food Services Finland.
Jaana Korhola sees excellent potential for development in the operations of Fazer Food Services, because the company focuses solely on food services.
As an example of the company’s product development she mentions that some Finnish Amica restaurants use recipes developed by the restaurants’ own chefs.
‘By using raw materials that have been initially prepared by carefully selected partners, our pro-fessional restaurant staff can focus on customer service and other duties. At the same time we ensure the uniform quality, additive-free content
and freshness of the food for the entire duration of lunch hours,’ she specifies.
‘In customer feedback surveys we have re-ceived good grades from customers and con-sumers alike.
The genuineness, quality and traceability of food, as well as environmental questions, are playing an increasingly important role, and this also guides our work,’ Jaana Korhola summarises.
Blue Service Partners, wholly owned by Fazer Food Services, continued to grow strongly in 2011. The company specialises in care and mu-nicipal services, and its future growth prospects are excellent. The café, restaurant and partner-ship businesses of Fazer Restaurants developed favourably; profitability improved and the increase in sales exceeded expectations. F
Turnover in Finland, M€
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17
FAZER 2011
2011Fazer succeeds in SwedenIn 2011 Fazer succeeded well in its second home market, Sweden. Fazer is a highly appreciated brand in Sweden and holds a solid position in the local bakery, confectionery and catering service business. Sweden is one of the Group’s growth areas – there is still plenty of potential for expansion in all business areas.
Fazer grew in the Swedish bakery market
Fazer achieved good results in its Swedish bakery business and grew profitably in a falling market. Fazer strengthened its market position as Swe-den’s second largest bakery company. The con-sumption of packaged bread has been decreasing in Sweden for years, but demand for hand-baked, locally produced bakery products is growing.
Fazer responded to the increased demand for hand-baked bread by acquiring Sweden’s lead-ing artisan bakery Gateau. Gateau, famous for its sourdough bread and high-quality pastry, has 15 bakery outlets in the Stockholm area. In the latter half of the year, four new bakery outlets were opened in Malmö. In addition, Gateau opened a new bakery in Lund, expanding its business in Southern Sweden.
‘Our goal is to increase Gateau’s business in Sweden and investigate opportunities to expand into other countries, such as Finland and Rus-sia,’ explains Per Sandberg, Managing Director of Fazer Bakeries & Confectionery Sweden.
Fazer invested 80 million Swedish krona (slight-ly over 9 million euros) in the dosing system of its Eskilstuna bakery. The new dosing system ensures better product quality and steady production and improves the employees’ working environment.
The most important development project in 2011, Fazer Way in Production, proceeded to plan in Sweden. The project aims for improved occupational safety and better quality, increased participation by employees and lower wastage in production. The new ways of working will be in use at all Fazer bakeries by the end of 2012.
Fazer’s confectionery business increased its market share
Fazer’s confectionery business grew profitably and increased its market share from 7.5 per cent to 9.2 per cent in 2011, even though the confectionery market as a whole fell in Sweden. Fazer is the fourth largest player in the field in Sweden. Behind the profitable growth and good results were strong brands, successful product launches, profitable sales operations and good co-operation with the retail trade. Fazer’s choc- olates were the most successful products. In 2012, Fazer is going to focus on product development and launch interesting new products.
‘Fazer’s confectionery products are well-known and beloved also in Sweden. We aim to increase our market share by using our strong brands in new, innovative ways and by continu-ing to improve our marketing and sales,’ says Per Sandberg.
The Lövånger Hällakullor bread got a new recipe and package in Sweden, after which its sales grew by 15 per cent.
Dumle Gingerbread became the most popular winter novelty in Sweden.
LÖVÅNGER HÄLLAKULLOR
DUMLE GINGERBREAD
We aim to increase our market share by using our strong brands in new, innovative ways and by continuing to improve our marketing and sales.”
18
FAZER 2011
Catering service business improved its profitability
Fazer decided to focus on high-quality contract catering services and gave up its conference ser- vice business in Sweden. The profitability of Fazer’s catering service business improved sig-nificantly, even though turnover decreased as a result of giving up the conference service busi-ness. In addition to improved sales, profitability was boosted by the successful implementation of efficient working methods and a new daily management model for restaurants.
‘We want to continue improving our contract catering services and provide healthy, high-quality lunch services that promote well-being. Taste sen-sations and customer satisfaction are a matter of honour for us, and that is why we place a special focus on our staff ’s competence and concept development,’ says Gunilla Rittgård, Managing Director of Fazer Food Services Sweden.
Ecological and environmental aspects are im-portant selection criteria for Swedish customer companies and lunch guests. Fazer has worked hard to improve environmental friendliness in its restaurants. ‘We can help preserve the environ-ment by decreasing the amount of food waste in restaurants and by using seasonal raw materials,’ Gunilla Rittgård explains.
As a result of long systematic work, envir-onmental certification audits of restaurants continued in 2011: 112 of Fazer’s restaurants in Sweden received the ISO 14001 certification. By the end of 2011, 170 out of 250 restaurants had received environmental certification. The goal is to receive certification for the rest of the res-taurants in 2012.
‘Fazer’s challenge is to grow profitably in a ma-ture market. Our strengths include tasty, healthy and environmentally friendly catering services and competent staff,’ Gunilla Rittgård summarises. F
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FAZER 2011
2011Fazer grows in RussiaFazer grew profitably in Russia. It became the largest bakery company and market leader, not only in the St Petersburg region, but also in Moscow. Most of the growth resulted from launches and active support of new added-value products and the expansion of frozen product operations.
F or years, Russia has been one of the most important growth markets for Fazer. Steady growth has been fuelled by successful acquisitions and expan-sion of operations.
Fazer has been the largest bakery company in St Petersburg since the acquisition of Hlebny Dom. Approximately half of the people in the Greater St Petersburg area are eating Fazer bread.
‘Each year, we have increased our market share in the Russian bread market. In 2011, we grew by 13 per cent in the fresh bread segment in the Moscow area, which made us the market leader there. Behind the achievement were suc-cessful launches of new products and increased distribution,’ explains Pekka Rantala, Managing Director of Fazer Bakeries & Confectionery business area.
Strengthening of retail trade means growth
Consumption habits are changing in Russia, where the total market for bread fell by 1.3 per cent compared with the previous year, measured in volume.
‘Consumers are increasingly interested in added-value products, such as sweet bakery products, baguettes and white bread. Frozen products are also an important growth area in Russia: Fazer’s frozen product business improved by 79 per cent,’ says Daniil Briman, Managing Di-rector of Fazer Bakeries & Confectionery Russia.
Growth is fuelled by increasing demand for dough and pizza products, as well as the prolifera-tion of large food supermarkets in Russia. Super-
markets are the most important distribution channel for frozen products. The strengthening of retail chains has also boosted sales of private label products.
‘We are proud of our knowledge of local tastes, but we have also been pleased to notice that the appeal of some products is nearly uni-versal and they are successful in many markets. An excellent example of this is the Frökusar bread, which Fazer initially launched in Sweden. Today, the bread is extremely popular also in Rus-sia. Shvedskie hlebtsy, or ‘little Swedish breads’, were among the most successful new products of the year,’ Daniil Briman says. The product was
awarded as the most innovative product of the year 2011 in St Petersburg
One of the most important achievements in 2011 was the renewal of product range, which reduced the number of products from 880 to 435. Limiting the product portfolio to the most profitable products improved the profitability of production, due to savings achieved through lower costs of production and logistics. Moreover, the product range offered to consumers is now more streamlined and uniform. Product optimisa-tion will continue in 2012.
Fazer invested 4 million euros to increase the capacity of the baguette production line at
Russia’s most successful new bakery product in 2011 was Fazer’s ‘Swedish bread’, which is the Russian version of the popular Frökusar bread originally launched in Sweden.
’LITTLE SWEDISH BREADS‘
20
FAZER 2011
the Zvezdny bakery. The purpose is to continue expanding the bakery’s production capacity of added-value breads in 2012. In 2012, Fazer will focus on implementing standardised working methods in all its Russian bakeries.
Fazer corporate identity is going to be adopt-ed in the Russian bakery and confectionery busi-ness unit in 2012. The goal is to adopt a uniform corporate identity for Fazer in all countries of operation.
‘A coherent corporate identity not only en-hances our corporate image as One Fazer in different countries but also promotes a uniform Fazer consumer experience. It is also related to the promotion of Fazer’s employer image in Rus-sia,’ Daniil Briman explains.
Successful Geisha campaign doubles sales
Chocolate consumption in Russia remained the same, but the value of sales improved by five per cent year-on-year. Fazer strengthened its position in the Russian confectionery market and is aiming for even stronger growth of market share. Geisha, Fazermint and Liqueur Fills are particularly popu-lar brands in Russia.
The extensive marketing campaign launched at the beginning of 2011 in the St Petersburg and Moscow areas boosted the sales of Geisha by 50 per cent. The campaign, based on TV advertising and trade-marketing activities, improved aware-ness of the brand by more than 11 per cent and enhanced co-operation with distribution channels and retail trade. F
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FAZER 2011
2011Fazer maintained its position in the Baltic countriesFazer maintained its market position in the Baltic countries, but the operating result fell year-on-year. In the latter half of the year, signs of a slow recovery from the depths of recession began to appear. However, the bread market was characterised by extremely tough price competition throughout the year, and it was not possible to pass on increased raw material costs to end product prices.
In 2011, Fazer focused on defending its mar-ket position and improving its profitability and efficiency in the Baltic countries.
‘In order to retain our market position in the Estonian and Latvian bread market,
Fazer joined in the price competition. This had a clearly negative effect on profitability. However, we succeeded in retaining our market position – Fazer is the second largest bakery company in the Baltics with an approximately 17 per cent market share,’ says Jesper Åberg, Managing Director of Fazer Bakeries & Confectionery Baltic.
Fazer’s market position is strongest in Latvia, where it is the second largest player in the field with a 24 per cent market share. The best results were achieved in Lithuania, where the market position, profitability and result developed favour-ably. In particular, increases were seen in sales of seed and wholegrain breads, toast and sweet bakery products.
In Estonia, sales of bread were fuelled by new products launched in the Fazer Kodu product family. A few months after launching, they had become some of the best selling products in Fazer’s portfolio in Estonia. Fazer Must Jõululeib, dark Christmas bread, was chosen as the best Christmas bread in Estonia for the second time.
Fazer strengthened its pioneer image by launching a completely new healthy bread concept in Estonia and Latvia. The recipe of the new DELI breads is based on the Frökusar product family, which is highly popular in Sweden, Finland and Russia. Fazer’s new products were also successful in Lithuania, where Fazer was a triple winner in the national Product of the Year 2011 contest.
A new operating model was implemented in the Baltic business unit in October 2011. Three strong country organisations have complete re-sponsibility for the management and running of the business in their respective countries. Benefits of the new operating model include customer-driven management, clear responsibilities and duties, efficient local operations and the ability to act quickly to market changes.
Foundation for growth in the confectionery business
Fazer’s confectionery business showed the best performance in Estonia, where Fazer is the second largest player. Fazer is especially well known for its chocolate products, where the market share of Fazer was 11.5 per cent. Karl Fazer Hazel- nut chocolate was the best selling tablet in Estonia. In Lithuania and Latvia, Fazer was focusing on implementing a new operating model, which will help to ensure future sales growth. Fazer is competing with strong local players in the Bal-tic countries. Growth is based on Fazer’s most popular brands: Karl Fazer, Geisha and Tutti Frutti.
Profitable growth is the most important goal for 2012 in the Baltic bakery and confectionery business. In order to achieve these goals, the product portfolio has to be strengthened with successful new products, new business opportun-ities developed (particularly in the frozen product business) and efficiency improved with the help of common operating models and development projects.
‘A committed, competent and motivated staff is the most important prerequisite for achieving
the set goals. Therefore, we will be focusing on the enhancement of managerial skills, the staff ’s competence and co-operation’, Jesper Åberg says.
In 2012, the current economic situation in the Baltic countries will still affect business: the main challenges to Fazer’s business will be recovery from the recession, the price development of raw materials, the decline in bread consumption and cost management. F
Gardesis Jore• sunflower seed rye bread was a best-seller in Lithuania, where it was awarded as Best product of the year 2011.
GARDESIS JORE•
22
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Turnover in the Baltic countries, M€
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FAZER 2011
Food service business successful in Denmark Fazer Food Services reached very good results in Denmark and maintained its position as the second largest food services provider in the country.
The competitive situation in the branch became tighter in 2011 which caused a slightly smaller turnover for Fazer compared to the previous year. In spite of this,
Fazer made its all-time best result in Denmark.The good results were a result of increased
conference catering and takeaway sales as well as efficient ways of working. There are still plenty of opportunities for growth in Denmark’s food service business.
‘We see a lot of potential for growth in the Amica restaurant concept because personnel restaurants are becoming increasingly popular in all branches. Our target is to further increase the amount of our Amica restaurants,’ says Morten Hammerich, Managing Director of Fazer Food Services Denmark.
Fazer’s food service brands in Denmark are Amica and wip. There are 34 Amica restaurants which mainly operate in production industry and the public sector, and 115 wip restaurants which operate in office buildings. The number of Fazer Food Services’ Amica restaurants grew by 5 dur-ing the year.
‘An increased market share and strengthened positions also in the Western parts of Denmark to Copenhagen’s level are among our strategic targets,’ says Morten Hammerich.
Fazer Food Services has purposefully in-creased its sales through products sold beyond lunch. The sales of takeaway nearly doubled in 2011.
‘Our assortment of takeaway products to order is varied. You can select different kinds of food from the wide assortment of meals, order them through the Internet and pick them up at your personnel restaurant on your way home. In addition to delicious food, our lunch guests can also order more special delicacies, such as home-made juice, marmalade, freshly baked rye bread or high-quality olive oil,’ describes Morten Hammerich.
Well-being and environment interest consumers
Environmental issues, well-being and organic food are important to Danish lunch guests. Fazer Food Services in Denmark has developed its environ-mental know-how in the restaurant business and healthy lunches. Fazer also observes the principle of the Soil Association of a gradual increase in organic raw materials in lunches served at their restaurants.
‘At the moment, 80 per cent of our lunch res-taurants in Denmark have managed to increase the share of organic food to over 30 per cent, which is the condition to get the Soil Associ-ation’s bronze medal. No extra costs have been incurred to the customers, because we utilise seasonal variations in our choice of raw materials. Our target for 2012 is to increase the figure to over 90 per cent of all our restaurants in Den-mark,’ says Morten Hammerich. F
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FAZER 2011
The corner stones of the profitable growth were high-quality food services, close co-operation with customers, the growth of food services outside lunch hours and a
clement operational environment. Norway is an important growth market for Fazer’s food service business.
Fazer Food Services has significantly de-veloped the environmental friendliness of its restaurants and healthiness of its lunches. As a result of long-term work, Fazer’s restaurant at the premises of Storebrand headquarter was granted the Miljøfyrtårn certificate as Norway’s first standalone restaurant. The certificate is usu-ally only awarded to an entire company. Also Fazer’s main office in Oslo was granted a Miljø-fyrtårn certificate. The certificates require action
both from the certified company and its partners.‘Norwegians value healthy lunch made of
fresh, pure raw materials and prepared by skilled chefs. We focus on the nutritional planning of meals to make our food not only healthy, but also delicious and attractively presented,’ says Ivar Villa, Managing Director of Fazer Food Services Norway.
Fazer’s food service business in Norway has shown a steady growth with improved perform-ance year after year. Fazer’s success in Norway is also largely based on tailor-made services for customers delivered by competent and skilled employees. ‘We offer our customers an entity which has been planned specially for them and which corresponds to their individual require-ments. We are more than professional lunch food service providers: we cook takeaway food,
organise catering for meetings and offer high-quality café services in the customer company’s premises,’ says Ivar Villa.
One of the main targets for 2012 is the im-plementation of common ways of working and a new performance management with key indica-tors in restaurants. These will increase efficiency, ensure and continuously improve quality and build commitment among employees to com-mon targets. F
Fazer grows profitably in Norway
Fazer promotes cultivation of Finnish rye
Fazer Food Services in Norway exceeded its result targets and increased sales by 11 per cent in 2011.
Demand for Finnish rye exceeds supply. Fazer wants to increase rye cultivation in Finland and bake its rye bread completely from Finnish rye. Fazer believes that extensive co-operation could help to increase rye cultivation. The Pro Ruis (‘Pro Rye’) association founded in 2011 is going to promote rye breeding and cultivation and the use of Finnish rye in bakeries.
‘Rye bread is one of the basic symbols of being a Finn, but consumers are often surprised to hear that we have to use imported rye for our bread. We want to change this, and we are ready to focus strongly on co-operation in the value chain and to modify our own operations,’ says Petri Kujala, Managing Director of Fazer Bakeries Finland.
Rye cultivation is challenging in Finnish conditions. The traditional rye varieties are sowed in autumn, but rye does not always survive the winter. Another reason that decreases interest in rye cultivation are old rye varieties with yields that are only about half of the corresponding wheat crops. The producer receives approximately the same price per kilogram for both.
The Pro Ruis association was founded at the initiative of Fazer Bakeries Finland and Fazer Mill & Mixes. Boreal Plant Breeding and the Raisio Group are the other founding members. The purpose of the co-operation is to increase interest in rye cultivation by developing higher-yielding rye varie-ties that are better suited for Finnish conditions. Fazer’s ambitious goal is that by 2016 it is using only Finnish rye for its Oululainen brand.
According to Petri Kujala, consumers appreciate Finnish work and
raw materials. The consumption of rye bread is steadily increasing. Petri Kujala explains that Fazer Bakeries Finland uses about 20,000 tonnes of rye per year. About half of the rye comes from abroad. The total crop of rye in Finland is about 70,000 tonnes. The amount of rye milled by Fazer Mill & Mixes has been steadily increasing for several years.
‘The co-operation aims to increase the crop of autumn rye by 20 per cent and to improve the cultivation properties of spring rye. In add-ition to improving crops, the total cultivation area must be increased in order to ensure availability of Finnish rye. The strength of Finnish rye varieties is that they can be cultivated throughout the entire rye production area, because they have been bred to match the local conditions.
Farmers have also joined in the co-operation at an early stage, which is very encouraging. ‘We have already started the work, but we are still at the plan-ning and organisation stage. We will also invite consumers to join in to check the results of our co-operation and to comment on them from their point of view,’ Petri Kujala promises. F
252011
202009
232010
Turnover in Norway, M€
0 10 20
24
FAZER 2011
he original recipe of Karl Fazer Milk Chocolate was received as thanks for an act of kindness. Karl Fazer’s son, Sven Fazer, had a business acquaintance whose son-in-law
suffered from a serious eye illness. Through his connections, Sven Fazer arranged an appoint-ment for him with an eye specialist. The doctor cured the son-in-law, and the father-in-law was so grateful that he gave Sven a recipe for Swiss chocolate. To this day, Karl Fazer Milk Chocolate is based on that recipe.
New school to the Biéby village sponsored by Fazer
To celebrate the theme year for Karl Fazer Milk Chocolate, Fazer wants to spread joy by helping the children of the Ivorian village it is sponsoring. Fazer will donate five cents for each Karl Fazer chocolate bar sold in August 2012 to Biéby’s school building project. The campaign will be launched in all the countries where Fazer operates.
‘Biéby has four schools for young children but no school for 12 to 16 year olds. The nearest school for this age group is 16 kilometres away in another village, which is why only a few of
Biéby’s 12 to 16 year olds attend school. They must either walk the 16 kilometres to school and back every day or stay with relatives or friends during the week to be closer to school. In Biéby, it can be difficult for young people of this age to find interesting activities during the week, and this can lead to problems,’ explains Päivi Ranta-Ropo, Quality Manager, Purchasing at Fazer.
The building of the school will begin in Sep-tember 2012, and the goal is to open the school in the autumn in 2013. The school will also have a small cocoa plantation, where the pupils of the school will learn about sustainable cocoa cultiva-tion and the correct care of the trees.
Since 2007, Fazer has been supporting the Biéby village in Ivory Coast through the ECHOES (Empowering Cocoa Households with Educa-tional Solutions) programme established by World Cocoa Foundation. The aim of the programme is to provide the youth in the cultivator community with training in matters related to cocoa cultivation in connection with other school education.
Geisha celebrates 50th anniversary
Geisha chocolate has its roots in the sweet Japonica pastry which Peter Fazer tasted at the
Karl Fazer Café on Kluuvikatu in the 1960s and was delighted. He asked the product develop-ment department to try a combination of the delicious japonais filling and milk chocolate – and a star was born. One reason for developing a Japan-inspired product was Peter Fazer’s partici-pation in the sailing event of the Tokyo Olympics in 1964.
Good feedback on 120th jubilee year events
In 2011, Fazer celebrated its 120th anniversary in many ways with consumers, staff and other stakeholders. Fazer organised many contests and events and toured Finland by truck, meeting local people near where they live.
‘The feedback has been almost unanimously positive. We are glad that by organising these events we reinforced our co-operation with customers, spread positive feeling among con-sumers and strengthened our team spirit within the company,’ describes Nina Törhönen, who is responsible for Fazer Group’s stakeholder rela-tions. F
Taste sensations spread joy Karl Fazer Milk Chocolate, Finland’s most valued and certainly most beloved brand, is celebrating its 90th anniversary in 2012, and the Geisha brand turns 50. Fazer has a unique relationship with chocolate lovers, and the company is very grateful for this special position. Karl Fazer Milk Chocolate was born out of kindness to a friend – a desire to spread joy. This is what Fazer still believes in.
T
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FAZER 2011
Corporate responsibility builds trust capitalThe year 2011 was characterised by consumers’ rising interest in corporate responsibility questions and the increasingly important role of the food industry in the field of corporate responsibility. Fazer is pleased with the increasing interest because the company wants to provide its stakeholders with products and services that suit a responsible lifestyle. Corporate responsibility is an inseparable part of Fazer’s brand and corporate identity
In 2011, Fazer continued the implementation of its corporate responsibility programme. The main focus was still on promoting the environmental programme, responsible sourcing, and the Consumer and Respon-
sibility area. During the year, Fazer initiated the development of a Group-level energy policy, established common environmental goals and indicators for Fazer Food Services, and began to create a risk analysis tool which covers all the raw materials. In addition, Fazer initiated the re-newal of the consumer feedback system. As a result, feedback concerning corporate responsibility can be more efficiently used for the development work.
Corporate responsibility indicators and a reporting system
Corporate responsibility is of strategic importance to Fazer. The challenge is to develop indicators to link the practical corporate responsibility work to the value drivers of business. Fazer initiated this development work in 2011, and a reporting sys-tem for corporate responsibility information was implemented to support the effort. In addition, the reporting system supports Fazer’s objective to widen the scope of reporting to cover more indicators specified in the GRI reporting guidelines and to cover more countries of operation.
Some of the goals related to environmental management systems were not achieved, and achieving the energy efficiency goals has also been challenging. The development of a corpo-rate responsibility programme for Fazer Mill & Mixes has not progressed as planned, and the work will continue in 2012.
The topics for corporate responsibility com-munication in 2011 included the launch of Fazer’s carbon footprint label, the Fazer Food Services fish policy, the policies concerning locally pro-duced and organic food, RSPO-certified palm oil, and the most extensive topic of all: the goals, achievements, and challenges related to the re-sponsible sourcing of cocoa.
Country-specific corporate responsibility action plans to be developed in 2012
The goal for 2012 is to strengthen the practi-cal corporate responsibility work by developing country-specific action plans for Sweden and Russia. The energy policy is expected to be com-pleted in the spring, and the implementation of the related measures will begin. A risk analysis tool covering all the raw materials will be taken in use in both of the business areas. With the analysis tool, measures can be more efficiently targeted at essential corporate responsibility questions. A summary of corporate responsi-bility goals and plans for 2012 can be found on page 29.
In accordance with its policy, Fazer addresses corporate responsibility on its website and in the Annual Review. Reporting is developed in accord-ance with the GRI (Global Reporting Initiative) guidelines.
Corporate responsibility information that complements this Annual Review can be found on Fazer’s website at www.fazer.com/Responsibility.
Corporate responsibility steering group
Fazer’s corporate responsibility work is guided by the corporate responsibility policy, the envi-ronmental policy, governance practice, operating principles, and ethical principles that are based on the ten international principles of the UN Glo-bal Compact. Corporate responsibility issues are addressed as part of the Group’s and business areas’ strategy processes, and the objectives and measures are implemented with the support of the normal management systems. The manage-ment of corporate responsibility is part of normal management, and the Group President carries the ultimate responsibility.
In autumn 2011, a decision was made to es-tablish a specific corporate responsibility steering group. The steering group’s role is to develop cor-porate responsibility and ensure its implementa-tion in business processes.
Responsible Business: a family owned company with a long-term focus
Fazer is a family-owned company, and long-term focus, planning, and profitable growth are em-phasised in its operations. Fazer provides and
The goal for 2012 is to strengthen the practical corporate responsibility work by developing country-specific action plans.”
26
FAZER 2011
supports economic well-being in its area of operation. In 2011, Fazer paid 511 million euros in salaries and 22 million euros in taxes and pur-chased goods and services with altogether 908 million euros from 13,236 suppliers. More infor-mation about finances can be found on pages 42 to 51 in the Annual Review.
Fazer reviewed the efficiency of its Finn-ish bakery business and the improvement of its competitiveness as a whole and decided to close its bakeries in Turku and Seinäjoki and to discontinue operating bake-off units within stores. The collaboration negotiations concerning these measures ended in June. The employment of 78 people was terminated at the Seinäjoki and Turku bakeries. In addition, the employment of 33 people was terminated at the bake-off units operated by Fazer within stores. Fazer offered individual supportive measures to those employees who became redundant.
Stakeholder Relations• Shareholder relations• Sponsorship and donations• Visits • Research and other partnerships
• Media relations
Responsible HR• Health and safety• Employee well-being• Training and development• Equality and diversity• Terms of employment
Responsible Sourcing• Raw material traceability • Responsibility in supply chain
• Sustainable trading practices
Responsible Business• Financial performance• Brand value• Ethical principles
Environmental Responsibility• Climate change• Minimising landfill waste – zero waste
• Eutrophication• Biodiversity
Responsibility and Consumer • Quality and food safety• Well-being• Packaging and labeling• Consumer dialogue
CORPORATE RESPONSIBILITY
CORPORATE RESPONSIBILITY PROGRAMME
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FAZER 2011
Responsibility and Consumer: food industry at the forefront
Responsibility questions in the consumer in-terface are a challenging topic. Consumers en-counter the company or brand in many different circumstances, and finding a common language in responsibility issues is not always easy for the company and the consumer. On one hand, Fazer wants to inform consumers about relevant re-sponsibility issues, while on the other hand, the company should ensure that the consumers’ views become building blocks for the develop-ment carried out by Fazer. Consumers expect Fazer to communicate about corporate responsi-bility in a consistent and reliable manner, but most of all they expect visible and concrete actions.
The environmental profile of products
Today, environmental issues interest an increasing number of people – especially those who want to influence their carbon footprint with their dietary choices. Companies are responsible for inform-ing consumers about the environmental impacts of their products. In addition, Fazer wants to en-courage consumers and customers to use Fazer’s products in a responsible manner. Fazer also wants to discuss with its stakeholders the possibilities to reduce the climate impact resulting from food.
In connection with the launch of Fazer’s Car-bon Flower label in spring 2011, Fazer Bakeries Finland invited a specialist panel to discuss envi-ronmental responsibility and the carbon footprint of food with stakeholders and environmental ex-perts. One of the objectives was to participate in the environmental debate that is ongoing in society.
The low-carbon lunch (launched in 2010) attracted plenty of interest among the custom-ers of Fazer Food Services, and in autumn 2011, Amica restaurants arranged a Baltic Sea Diet theme week. The meals consisted of locally pro-duced, low-carbon ingredients, such as vegetables, berries, and Finnish fish and grains.
In 2011, Fazer’s packaging development re-ceived a certificate of biodegradability for the wrapping of Fazermint chocolate pralines. This information will be included on the package start-ing in 2012. The Futupack Eco study investigated the environmental impact of the different packag-ing alternatives for Fazer Puikula bread.
Well-being
Topics discussed in the consumer interface and more widely among stakeholders from the nutri-tional and the health point of view are the low-carbohydrate diet and the role of food industry
in people’s well-being. Quality and food safety are permanent objects of interest. Additives, E codes, sweeteners, and GMO are some of the topics that have stirred debate. Furthermore, discussion continues on responsibility labels and their significance and benefits.
Fazer strives to respond to stakeholders’ re-quests. Fazer follows the national and Nordic nu-tritional recommendations and regulations in all the countries where it operates. The company’s operations are based on scientific research, and Fazer keeps up-to-date on nutritional research data. Fazer’s well-being programme stresses ho-listic well-being and balance, and one of its goals is to make healthy choices as easy as possible for the consumers.
Fazer’s research programme focuses on con-sumers’ well-being and innovations that promote it. In 2011, Fazer also continued to implement the E code optimisation programme. Its goal is to inspect all the products and reduce the use of additives whenever possible. This is done, for example, through the renewal of recipes.
Quality and product safety
In 2011, Fazer Bakeries & Confectionery imple-mented a new method for assessing product quality as experienced by consumers. In addition to the quality monitoring of production, Fazer initiated a quality assessment of product samples picked from the stores. The new product qual-ity assessment method was piloted at the Lahti bakery, and it will be taken into use at all units in 2012. The goal of the renewal is to improve the quality of Fazer’s products and packages in
Fazer’s well-being programme stresses holistic well-being and balance.”
28
FAZER 2011
2011
1,575
553355
5551122194
2011
27.918.77.3
79.91.002.0
938.2591,293
62 per cent of the electricity was produced using hydropower and 10 per cent using wind power.”
ENVIRONMENTAL INDICATORS
Usage of packaging materials (kg/prod ton)Total amount of waste (kg/prod ton)Amount of mixed waste (kg/prod ton)Amount of animal feed (kg/prod ton)Total energy consumption (MWh/prod ton)Usage of water (m3/prod ton)Used raw materials (kg/prod ton)Amount of production (ton)The indicators cover the operations of Fazer Confectionary, Fazer Bakeries and Fazer Mill & Mixes.
2009
34.929.99.5
80.31.011.9
937.1590,547
2010
55.426.96.9
85.71.031.8
921.0580,462
DISTRIBUTION OF CASH FLOWS (M€)
Customers > Fazer (turnover)Suppliers (sourcing) • direct sourcing • indirect sourcingSuppliers (operative investments)Personnel (salaries)Society (taxes)Owners (dividends)Financiers (financing costs)
2009
1,441
50533371
481181412
2010
1,514
52134648
5092090
CORPORATE RESPONSIBILITY
GOALS FOR 2012
• Better visibility of corporate responsibility in the consumer interface
• Country specific programmes for Swedenand Russia
• Energy policy for Fazer Group• Increased offering of organic food and seasonality• Less food waste• Implementation of raw material risk analysis tool• 100 per cent RSPO certified palm oil• Developing traceability of cocoa• Better visibility of country of origin in restaurants• Updating the stakeholder study
the consumer interface. In addition, this is an effi-cient way to provide production with information about consumers’ wishes and opinions.
Traceability has become an issue of high prior-ity both from the ethical supply chain and food safety point of view. In 2012, Fazer will focus on food safety and, consequently, the improvement of traceability, by developing a standardised food safety management system for Fazer Bakeries & Confectionery.
The piloting of the system will start at the Lahti bakery. At the other locations, the standard will be implemented as part of the Fazer Way in Production programme. The purpose of the standard is to further improve the level of food safety and enhance the staff ’s competence in food safety matters.
Twice a year, Fazer Food Services conducts a customer survey concerning customers’ experi-ence of quality at Amica restaurants. In 2011, a total of 54,172 people responded to the survey. Amica restaurants received good ratings for customer service, while the consistency of food quality could be improved.
According to the results, the customers would like to recommend Amica restaurants to others. At schools, 72 per cent of the customers would recommend Amica restaurants; at personnel res-taurants the figure was 66 per cent.
Environmental Responsibility: increased resource efficiency
Of the environmental load of consumption, about one-third results from food and associated activi-ties, such as cooking, storage, and catering serv-ices. The main themes of Fazer’s environmental responsibility include climate impact, zero waste (minimising the amount of landfill waste), eu-trophication, and biodiversity. Within these main themes, projects and programmes are ongoing with concrete goals specified for restaurants, bakeries and confectionery factories.
Energy efficiency is the most important envi-ronmental factor for bakeries and confectionery factories. The energy analyses aiming for better energy efficiency were completed in 2011 at Fazer Confectionery’s locations and the baker-ies in Finland, Latvia, and Lidköping, Sweden. The
updating of Fazer’s general energy policy began in 2011, and the specification work will continue in 2012. The purpose of the energy policy is to ensure sustainable energy sourcing and use.
Of the electricity acquired by Fazer in Finland in 2011, 62 per cent was produced using hydro-power and 10 per cent using wind power. These figures cover the energy profile of the electricity purchased from the power company and Fazer’s separate hydropower and wind power electricity contracts. In 2012, renewable energy sources will account for 100 per cent of the electricity used by Fazer Bakeries & Confectionery in Finland.
In addition to energy, waste generated at the different stages of production is a considerable environmental issue in the industrial sector. The Vantaa bakery piloted a waste reduction project in 2011. The large amount of landfill waste was one of the challenges. Inspection rounds were conduct-ed at the factory, analysing needs for renewal and improvement of efficiency. A considerable reduc-tion in the amount of landfill waste was achieved by completely renewing the sorting procedures, waste containers, and guidelines at the bakery.
29
FAZER 2011
As a result of the pilot project, most of the waste is now recycled as biofuel, instead of ending up at the landfill. The pilot project was conducted in November and December, and the amount of landfill waste decreased by 80 per cent year-on-year.
In addition to specific projects, environmental impacts are taken into account in Fazer’s daily goals. The goals of Amica restaurants include energy-efficient cooking, efficient planning and forecasting of consumption, and using seasonal domestic ingredients as much as possible. In 2011, Fazer Food Services specified its general environ-mental goals to be achieved by 2014.
Fazer Food Services will focus on the devel-opment of an environmentally friendly and par-ticularly a more climate-friendly offering based on seasonal ingredients. In order to facilitate the work, a definition of local food was developed and goals were set for the offering of organic products. The reduction of food waste continues to be the main goal for restaurants.
Responsible Sourcing: transparency and risk management
The keywords of sourcing include high-quality raw materials, origin, and transparency in the value chain. As part of the improvement in transparency, Fazer initiated the building of a risk
analysis tool based on the corporate responsibil-ity impacts of different raw materials. The tool will help identify the most important environmental and social responsibility risks for each raw ma-terial category. The tool will be piloted in Fazer Food Services, and the goal is to cover all the raw material categories in 2012.
Fazer continued the sourcing of certified palm oil according to plan. The proportion of RSPO (Roundtable of Sustainable Palm Oil) certified palm oil was 66 per cent in 2011. By the end of 2012, all of the palm oil used by Fazer will be RSPO-certified. On WWF’s palm oil ranking list for 2011, Fazer’s rank was the best among Finnish companies; it received eight out of a possible nine points. The ranking was based on the amount of RSPO certified palm oil used and goals to increase the use of sustainable palm oil.
In spring 2011, Fazer Food Services updated its fish and seafood sourcing guidelines for Fazer and Amica restaurants. The guidelines are based on the recommendations of the WWF consumer guide on fish species to be avoided or favoured, published in Finland in January 2011. The previous update of the principles of fish sourcing was made by Fazer in spring 2010. The WWF recommenda-tions are also in use in Sweden and Denmark.
Responsible sourcing of high-quality cocoa is essential to Fazer. Fazer wants to further
improve the traceability of cocoa. This work is based on the responsibility principles specified by the World Cocoa Foundation. Fazer’s objective is to use only cocoa that fills the requirements for responsible cocoa sourcing by 2017. In 2011, certified cocoa accounted for 19 per cent of all purchased cocoa raw material.
Fazer continued to sponsor the Biéby village in Ivory Coast through the ECHOES (Empowering Cocoa Households with Educational Solutions) programme established by the World Cocoa Foundation. The purpose of the programme is to provide the youth in the cultivator commu-nity with professional training in cocoa cultivation. The training is provided in connection with other school education. By the end of 2011, a total of 560 young people in Biéby had received train-ing in cocoa cultivation, and 100,200 cocoa trees have been planted on 55 new cocoa plantations in accordance with the teachings of the ECHOES programme.
In 2011, Fazer Bakeries Finland, Fazer Mill & Mixes, Boreal Plant Breeding and Raisio Group founded the Pro Ruis (‘Pro Rye’) association, which aims to raise rye cultivation to a new level in Finland. Fazer’s goal is that by 2016, all of its Oululainen rye bread will be made from Finnish rye. More information about Finnish rye can be found on page 24. F
JanuaryFazer Ruispuikula was the first bread in Finland to receive a carbon footprint label.
MayFazer Food Services updated instructions for Fazer and Amica restaurants in Finland regarding the purchase of fish and seafood. The instructions follow the latest recommendations of WWF’s Seafood Guide.55 Amica restaurants in Sweden received ISO 14001 environmental certification.
JuneFazer Food Services followed the instructions of authorities regarding the use and handling of vegetables to prevent the dangerous EHEC bacteria from spreading in Finland.
Fazer announced the closure of the Seinäjoki and Turku bakeries and the termination of bake-off units operated by Fazer within stores.
AugustFazer supported teachers’ Campus seminar which offers teachers the latest information from the world and builds team spirit among them.
SeptemberFazer’s restaurant at the premises of Storebrand headquarter was granted the Miljøfyrtårn eco-certificate as Norway’s first standalone restaurant. 58 Amica restaurants in schools in Sweden participated in a competition to reduce food waste.Fazer Bakeries Finland, Fazer Mill & Mixes, Boreal Plant Breeding and Raisio Group founded the Pro ruis
(Pro Rye) association which aims to bring the cultivation of rye in Finland to a new level.Fazer announced it will change the visual image of the Kina confectionery sold in Sweden. The change is made because Fazer wants to be a responsible company and does not wish any package to be experienced as negative.
OctoberFazer Food Services Finland decided to increase the amount of eco certified products in its assortment. and join the Steps to organic programme for professional kitchens.Fazer supported Women’s Bank through a campaign for Fazer employees. Fazer as a company committed to doubling the total dunations made by employees.
Fazer and Geisha gathered 250,000 Swedish krona for the Breast Cancer fund in Sweden.
November Fazer continued investing in its local bakery network and opened three new local bakeries.Fazer came first in the WWF palm oil scoring among Finnish companies.All bakeries in Sweden implemented three new policies to promote product safety, environmental issues and occupational safety.
December55 Amica and Fazer restaurants in Sweden received ISO 14001 environmental certification.
DURING THE YEAR
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FAZER 2011
CORPORATE RESPONSIBILITY
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FAZER 2011
Success stories happen in daily workFazer renewed its human resources strategy in 2011. The Group’s common People Strategy has been developed to promote Fazer’s business strategy execution: growth and internationalisation through sustainable competitive advantages. The most important areas of the new strategy are leadership, performance management and competence development.
Motivated, skilled and healthy Fazer employees who are well led are es-sential for the achieve-ment of our strategic goals,’ says Mika Videman,
SVP, Human Resources, Fazer Group. ‘Fazer’s business is people-driven, and success depends on each Fazer employee’s daily contribution. Therefore, in order to achieve the goals, com-petent leadership is required at each level of the organisation.’
Good results with competent leadership
Competent and fair management, clearly defined tasks and goals promote motivation and occu-pational well-being. Therefore, enhancement of managerial skills, implementation of standardised HR practices and competence development will be in focus throughout the Group in 2012.
Performance management is an important part of leadership. According to Mika Videman, this means taking the strategic goals to the indi-vidual level so that each employee understands his or her role in the achievement of the goals. A performance management process will be im-plemented across the Group in 2012.
‘The goal of performance management is in-teractive improvement of one’s work and com-petence, which promotes the company’s goals and ensures competitiveness. Clear, measurable individual-level goals make work rewarding and motivating for each employee,’ stresses Mika Vide-man. Good leadership includes systematic and fair feedback on performance and discussions with one’s supervisor. ‘Feedback must be given
on good and poor performance alike. Employees whose performance is not as good as expected deserve another chance. At the same time, the elements of successful performance should be contemplated,’ he says.
Improvement of professional skills and behav-ioural competencies in accordance with the set goals are essential components of performance management. Employees assess their competence together with the superior, and a plan for further development is drafted at the same time. Per-formance management is also linked to rewarding and motivation.
Mika Videman believes that the increasingly international nature of Fazer’s business will show more and more in each employee’s daily work. ‘Fazer’s strategic goals to grow and become more international require a positive attitude to change of us all, in addition to a willingness to view our ways of working from new perspec-tives. In order to succeed, we must act according to Fazer’s values: passion for customer, quality excellence and co-operation across unit and country boundaries. Moreover, we will need a new kind of agility in order to ensure rapid responses to the ever-changing operating envi-ronment,’ he says.
As part of the internationalisation strategy, Fazer renewed its language policy. As of 2012, the Group’s common language is English. ‘A common working language facilitates co-operation between the countries, and this is also in line with our in-ternationalisation goals,’ says Mika Videman. The use of local languages will continue with consumers, customers and other interest groups, as well as in operative work.
Investments in occupational well-being
Fazer began to work on its occupational well-be-ing strategy in 2011, and the work will continue in 2012. The different components of occupational well-being are viewed from the aspects of work-ing capacity, working environment and people’s mental and physical health.
Investments in occupational well-being are profitable, because the return is always high. The maintenance of working capacity and occupa-tional well-being is a true win-win-win situation: it benefits the individual, the company and society alike. However, the individual always bears the ultimate responsibility for his or her own well-being,’ states Mika Videman.
The annual personnel survey is one of the most important indicators of occupational well-being. In 2011, the survey was carried out in
2010
24.113.6
2011
27.311.3
FREQUENCY OF OCCUPATIONAL ACCIDENTSNumber of accidents per one million working hours
Fazer Food ServicesFazer Bakeries & Confectionery
NUMBER OF EMPLOYEES AND EMPLOYEES BY AGE
1009080706050403020100
Over 60
51–60 yrs
41–50 yrs
31–40 yrs
21–30 yrs
Under 20FI SE RU DK NO LV LT EE Total
6,511 3,054 3,765 801 286 262 187 332 15,198
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FAZER 2011
Fazer Food Services; in 2012, the survey will be conducted in the entire Group. The response rate to the survey was higher than in 2010, at 79.1 per cent. The overall result for the food service busi-ness was significantly above the pan-European level. In particular, employees gave good feedback on their respective units and skilful managerial work. Other positive areas included the efficient implementation of Fazer’s values in one’s own work and the continuous improvement of work-ing methods. Working conditions, employer image and occupational well-being were seen as areas for improvement.
Fazer applies zero tolerance to the report-ing of occupational accidents. This means that all occupational accidents are documented and reported. The number of accidents in 2011 re-mained at the previous year’s level. The accident rate fell in Fazer Bakeries & Confectionery but rose in Fazer Food Services.
The Group implemented a new method for the prevention of occupational accidents. Each month, each Management Team will select one or two of the documented occupational accidents, and their reasons will be thoroughly examined. The purpose of this is to enhance the prevention of ac-cidents and improve commitment to the reduction of accidents throughout the organisation, including the senior management.
Fazer applies an early support model, which aims to prevent absences due to illness and to eliminate factors that can lead to a reduced working capacity.
Fazer offers its employees equal opportunities at the workplace. According to the equality plan,
in 2012 Fazer will focus especially on fair pay. In addition, Fazer will encourage men and women to equally seek jobs at all organisational levels.
Fazer’s employer image has been very strong over the years, and Fazer once again ranked well in the employer image surveys carried out in 2011. According to the ‘Professionals’ 2011 survey conducted by Universum, Fazer is the most popular employer among business sector professionals. In 2010, Fazer was in second place. ‘Professionals appreciate working with leading brands in a family-owned company which oper-ates responsibly and with long-term commitment,’ explains Mika Videman.
Fazer wants to continue being the most at-tractive employer in its field. Important elements of employer branding include co-operation with vocational schools and providing trainee vacan-cies for young people who have just completed their basic education.
Common ways of working make co-operation smoother
During the year, Fazer promoted many develop-ment projects that aimed to standardise the ways of working in food services, bakery and confec-tionery production, sales and support functions.
The Fazer Way in Production programme pro-motes the achievement of strategic goals. It aims to standardise the ways of working in production and to implement best practices. Moreover, the programme aims to create a culture of continuous improvement across all production units. In 2011, in addition to the Vantaa confectionery factory and bakery, the programme was launched at the Lahti
PERSONNEL
bakery and partly at the Eskilstuna bakery. By the end of the year, the new ways of working will be in use in all the production units.
The Fazer Way in Production programme has improved occupational safety and made workplace areas more pleasant. Moreover, it has increased co-operation between different teams and production units. The savings accrued as a result of improved efficiency can be invested in the improvement of working conditions and workplace areas.
In 2011, Fazer Food Services established the new management model implemented in 2010. The restaurants were organised on a geographi-cal basis into larger units with one leader. The number of managerial staff fell from 800 to 150, which also means that managerial staff will have better opportunities for coaching and compe-tence development. In connection with this change, new ways of working were introduced, such as morning and afternoon meetings at the restaurants. The meetings monitor the sales and customer service performance with the help of daily indicators. The new management model motivates employees and improves the predict-ability of, for example, raw material consumption.
During the year, Fazer remodelled its HR or-ganisation to better support the Group’s strate-gic goals. In addition, Fazer launched a project to renew the Group’s personnel data systems. The project continues in 2012 and 2013.
‘Fazer is an appreciated family-owned company with long traditions. We want to develop the com-pany in accordance with the new goals, respecting Fazer’s values and its traditions as a family-owned company,’ summarises Mika Videman. F
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FAZER 2011
Fazer promotes responsible cocoa sourcingFazer is renewing its cocoa sourcing strategy in 2011–2012. According to the strategy, by 2017 Fazer aims to achieve full traceability of the cocoa raw material it purchases. In co-operation with the World Cocoa Foundation, Fazer is actively contributing to the improvement of conditions in cultivator communities.
Responsible cocoa sourcing at Fazer is based on improving traceability and following the principles of the World Cocoa Foundation: People, Profit, and Planet. Fazer works sys-
tematically to increase the sourcing of responsi-bly produced cocoa by 10 to 15 per cent each year so that consumers could act responsibly by choosing Fazer’s products.
‘The power of a single organisation to influ-ence the responsibility of cocoa production is very limited, even nonexistent. We can improve the conditions of cocoa cultivation only through systematic co-operation with the entire industry and through transparent interaction with all of our stakeholders,’ says Cocoa and Chocolate Quality Expert Majlen Fazer.
Transportation complicates traceability
Fazer’s cocoa experts Majlen Fazer and Päivi Ranta-Ropo have visited many cocoa producer countries. On their latest visit in October 2011 they went to Ghana. They are familiar with the daily life in cultivator communities and have a thorough knowledge of the entire production chain, from the growing of cocoa trees to the processing of cocoa raw material and the manu-facturing of chocolate products.
Majlen Fazer explains that in many producer countries, such as African countries, cocoa raw material is traceable up to the point when the cocoa beans arrive at the port. In the port, beans from different cultivators are unloaded from the jute bags, combined and loaded as bulk goods into the ship’s hold to be transported to Europe. European production plants process the beans
into cocoa products that companies such as Fazer buy: cocoa mass, cocoa powder, and cocoa butter.
‘Beans can also be loaded into the ship in the jute bags, which protects them against contami-nation, and at the same time the information of origin is carried along. Logistically, however, this is not very efficient, which is why bulk carriers are usually used for transportation,’ says Majlen Fazer. ‘For the quality and traceability of the raw material, it would be best to process the beans as fresh as possible in the country of origin. Fin-ished cocoa products are not contaminated as easily during transportation and storage, and the detailed information of origin would not be lost during processing. In this way, the value added would remain in the country of origin, which would be a good thing,’ she states.
Close co-operation with the countries of origin
Quality Manager, Purchasing Päivi Ranta-Ropo says that processing the raw material in the country of origin is an option worth considering, because the production quality standards have created a common language between Europeans and the African producers. The local factories are modern, and the quality and occupational safety regulations are the same as in Europe.
‘After the stabilisation of conditions in West Africa, European organisations have started to invest in local production plants. It is important for us to find suitable partners and learn about their way of working. In this way, we can build a mutual trust with organisations in the countries of origin,’ says Päivi Ranta-Ropo.
The government of Ghana has actively con-
tributed to the improvement of cultivators’ condi-tions and income level. Each year at the beginning of the main harvest season, the government spec-ifies the price to be paid to cultivators. In this way, the cultivators know what they will be getting for their crop. ‘At the first checkpoint, each bag of cocoa beans is sealed. Thus, the beans can be traced to the area of the cultivator community. It looks like Ivory Coast is gradually adopting a simi-lar operating model,’ explains Päivi Ranta-Ropo.
Both of these cocoa experts stress the impor-tance of the overall picture when talking about the responsibility of cocoa sourcing. ‘It is impor-tant that we can help the locals to improve their cultivation skills, so that they will achieve a suf-ficient income and thus can improve their living conditions. While the cultivation becomes more efficient, the health of the soil and environment must also be attended to,’ says Majlen Fazer. F
VALUE PROPOSITIONFazer’s chocolate is a responsible choice for those who value quality and taste sensations.Our supply chain is transparent and the origin of our cocoa is traceable.We abide by ethical principles in our operations, we want to guarantee farmers a good income level and make sure the environment is taken care of.We do not accept the use of child labour.
VISIONBy 2017, the origin of our cocoa will be trace-able and all the cocoa we use fulfils the criteria of responsible production.
34
FAZER 2011
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35
FAZER 2011
Gateau stands for great bread!The crust is crisp, the inside soft with a great texture, the smell almost intoxicating – and the taste transports your thoughts to Paris. The secrets of this handmade bread baked in a stone hearth oven are genuine sourdough, a long rest time and the best ingredients. No wonder Swedes love Gateau bakery products!
he artisan bakery Gateau, acquired by Fazer in spring 2011, bakes its bread according to traditional French recipes. The bakery models itself on the famous Parisian Poilâne
bakery, whose breads have been praised as the best in the world. Bread baked with sourdough is very tasty and remains good for a long time. A short distance from bakery to outlet guarantees the freshness of the products.
‘Gateau’s handmade, additive-free artisan bread and high-quality pastry have become ex-tremely popular in Sweden. We are really glad that Fazer’s product range now includes Gateau’s luxurious bakery products,’ says Marketing Direc-tor Annika Westby from Fazer Bakeries & Con-fectionery Sweden.
Gateau’s concept is simple: the breads and confectionery products are made in Gateau’s bakery, from where the products are delivered to local bakery outlets and some carefully se-lected grocery stores. In addition to the bakery in Stockholm, business has been expanded to
Southern Sweden by opening a bakery in Lund. There are 15 bakery outlets in the Stockholm area and three in Malmö. There are plans to open several new outlets in 2012.
Gateau has grown rapidly in Sweden, and the pace is not slowing down. Sales are increasing, even though the total market for bread has re-cently been falling. Annika Westby believes that a similar concept could be a success also in other countries.
‘We are planning to experiment with the concept in other Fazer countries, such as Finland and Russia, where local food trends are boosting the popularity of handmade bread. We want to bake the best products for consumers for every occasion – both in the packed bread and locally baked bread ranges.’
But what is the secret behind Gateau’s bakery products?
‘Quality and competence, I would say. We respect traditional bakery craftsmanship and use only the best ingredients,’ Annika Westby summarises. F
T
36
FAZER 2011
Fazer’s confectionery factory has been a popular attraction from the days when the facto-ry was located on Pursimiehenkatu in the centre of Helsinki. Today, visits are arranged to the Vantaa confectionery factory and some to the bakery, too. Most of the visitors are schoolchildren.
The visits are arranged by Fazer’s visitor mar-keting unit. The 13 guides are thoroughly familiar with Fazer. Visits are arranged on five days of the week for about 300 guests each day throughout the year except in high summer. There are nine languages available.
‘For hygiene and safety reasons, only customers, suppliers and potential employees are allowed to enter the production areas. In addition to showing videos, we take our guests to the confectionery factory’s visitor corridor, which was renewed in 2011. This made it possible for us to also tell our visitors about bread and food, in addition to chocolate,” explains Marianne Jämsén, one of the guides.
Marianne Jämsén has been working as a guide at the factory for 25 years. The secret of her long career, besides the pride of being a Fazer em-ployee, is the joy she gets from meeting different visitor groups.
‘A visit to the confectionery factory is a dream come true for many schoolchildren, and as adults they will still remember it. Today, more and more visitors are interested in the origin of cocoa, sus-tainable development and responsible business.’
When Marianne Jämsén started at Fazer she thought she was too shy to be a guide, but she was wrong. After a couple of weeks, she made the decision to stay. The essence of the job is variety: it is nice to meet new people, and every group is different. Has there been a group that was particularly memorable?
‘Years ago, after the factory tour, two slightly worried ladies came to me and explained that Aunt Elna was missing and had probably been left behind somewhere along the way. We looked for Aunt Elna everywhere, searching inside and outside, and everyone was actually a bit worried by then. But then the two ladies remembered that Aunt Elna didn’t even come along on this trip,’ Marianne Jämsén relates laughing.
The pupils from Oulunkylä School’s fourth grade listen to the presentation about Fazer with keen ears and admire the artistry of master confectioners. Many hands are raised when the children are asked if anyone would like to be-
come a confectioner. Many of them say that they want to come to work at Fazer when they grow up. ‘Oh how I envy everyone who works here,’ sighs one of the boys when walking out the door, a piece of chocolate in his mouth.
Marianne Jämsén still remembers how she missed a visit to the confectionery factory as a schoolchild because she was ill. Fortunately, dur-ing the past 25 years, this mishap has been recti-fied many times over. Does the guide still enjoy Fazer confectionery?
‘But of course. Not every day though, but I’ll never grow tired of them. And nothing can beat Karl Fazer Milk Chocolate!’ she confesses. F
A visit to Fazerila is never forgotten
Fish strategy for sustainable sourcing
In accordance with its fish procurement strategy, Fazer has been using the WWF Seafood Guide as a basis for choosing fish since 2010. Fazer’s restaurants in Finland, Sweden and Denmark no longer use fish or seafood species included on the red list. The fish species on the red list are heavily overfished, or they are fished using destructive methods.
Fazers requires good traceability of fish products from its raw material suppliers and partners. In addition, the WWF Seafood Guide’s recommenda-tions on responsible fishing methods and fishing areas are taken into account in fish procurement to the extent possible. Currently, most of the fish bought by Fazer can be traced to the batch ID.
‘We are working all the time to increase the proportion of Finnish fish on our restaurant menus, because there is plenty of demand. Finnish fish is local food at its best and also sustainable for the environment. In addition, we
Each year, Fazer receives more than 45,000 visitors to the confectionery factory and a few groups each month to the bakery in Vantaa. Such a visit is an unforgettable experience, and the memory remains for the rest of your life.
Lunch guests at restaurants often want to know where the fish on their plate comes from. In addition to the origin of the fish, consumers are interested in the aspects of responsible fish sourcing.
Of the fish used by Fazer’s restaurants in Finland, 27 per cent are from WWF’s green list and 73 per cent from the yellow list. Salmon and rainbow trout consti-tute 57 per cent of the yellow list species used by the restaurants.
are continuously increasing the use of environmentally certified fish,’ explains Sourcing Manager Jiri Luoto from Fazer Food Services Finland.
The changing availability and high price of Finnish fish have posed practi-cal challenges to Fazer. Correct handling of fish and sufficient degree of processing are important for industrial kitchens.
‘Supplying restaurants with Finnish fish requires co-operation of the en-tire production chain, from the fisherman to the restaurant. Co-operation is the only means for building a network that is extensive enough to produce enough fish for the needs of industrial kitchens,’ Jiri Luoto explains.
‘The use of Finnish fish is taken into account in our product develop-ment. Our renewed fish recipes use pike and roach, for example. About 60 Amica restaurants serve roach fish patties and pike loaf, but the purpose is to increase their availability in 2012,’ he continues.Fazer is now investigating how to best inform lunch guests at each Amica restaurant about the origin of fish. F
37
FAZER 2011
Berndt Brunowb. 1950 Master of Economic Sciences Chairman of the Board of Directors of Oy Karl Fazer Ab 2009–
Fredrik Fazerb. 1946 Master of Political Science Member of the Board of Directors of Oy Karl Fazer Ab 1987–
Anders Dreijerb. 1953 Master of Science (Technology) Member of the Board of Directors of Oy Karl Fazer Ab 1994–
Johan Linderb. 1959 Master of Laws Member of the Board of Directors of Oy Karl Fazer Ab 2000–
Klaus Cawénb. 1957 Master of Laws Member of the Board of Directors of Oy Karl Fazer Ab 2002–
Leif Hagelstamb. 1955 Engineer Member of the Board of Directors of Oy Karl Fazer Ab 1996–
Ketil Eriksenb. 1963Bachelor of Science (Economics)Member of the Board of Directors of Oy Karl Fazer Ab 2009–
Juhani Mäkinenb. 1956 Master of Laws, lagmanMember of the Board of Directors of Oy Karl Fazer Ab 2006–
Board of Directors
38
FAZER 2011
Pekka Rantalab. 1966Master of Economic SciencesManaging Director, Fazer Bakeries & Confectionery
Ulrika Romantschukb. 1966Master of Political ScienceSenior Vice President, Communications and Stakeholder RelationsAreas of responsibility: communications, stakeholder relations, corporate responsibility, brand and corporate identity
Karsten Slotteb. 1953Master of Economic SciencesPresident and CEO
Mika Videmanb. 1967Master of Science (Technology)Senior Vice President, Human Resources
Jouni Grönroosb. 1965Master of Economic SciencesDeputy CEO and CFOAreas of responsibility: the Group’s finance, legal affairs, M&A, IT, security and investment management functions and strategy process
Group Management Team
Iris Karjulab. 1954Master of Economic SciencesManaging Director, Fazer Food Services
39
FAZER 2011
The Corporate Governance of Oy Karl Fazer Ab (Fazer) and its daughter companies follow the rules and regulations defined by the Articles of Association and the Finnish legislation and the fol-lowing administrative principles, which are based on the Finnish Companies Act and partly also the recommendations for listed companies in Finland.
Shareholders’ meeting
The highest power of decision in Fazer Group is held by shareholders at the Shareholders’ Meet-ing. The Annual Shareholders’ Meeting is held an-nually at the latest in June in Helsinki or Vantaa. The Shareholders’ Meeting addresses issues it is responsible for according to the current legisla-tion and Fazer’s Articles of Association, such as approving the Group’s financial statements, de-ciding on the dividend distribution, appointing the Board of Directors and auditors and their compensation.
According to the Articles of Association, no-tices of meetings for Shareholders’ Meetings are posted at the latest 14 days before each Share-holders’ Meeting. The Shareholders’ Meeting was held on 22 March 2011.
Board of Directors
The Owners’ Council, appointed by sharehold-ers, convenes the Nomination Committee, which is responsible for preparing propositions of the composition of the Board of Directors and com-pensations of Board members. The Nomination Committee consists of one Owners’ Council representative, the Chairman of the Board of Directors and one independent Board member.
The composition and duties of the Board of DirectorsAccording to Fazer’s Articles of Association, the Board of Directors consists of not less than
five and not more than ten members who are elected annually at the Shareholders’ Meeting.
The Board of Directors has general jurisdic-tion in all issues, which are not required of other institutions under the Finnish Companies Act and the Group’s Articles of Association. Under the terms of the Finnish Companies Act, the Board of Directors is responsible for ensuring that the Group’s administration and operations are man-aged appropriately. The Board of Directors is also responsible for ensuring that the accounting and financial control are managed appropriately. Other tasks of the Board of Directors include e.g. approving the Group’s values, strategy and annual operational plans. The Board of Directors also decides on acquisitions and strategic investments and monitors the financial performance and posi-tion of the Group. The Board of Directors also appoints the Chief Executive Officer (CEO) and decides on the salaries and compensation of the Group’s senior management.
In addition, the Board of Directors assesses its own performance and co-operation with the management.
Meeting practisesThe Board of Directors holds at least eight meet-ings a year. The Annual Financial Statements are approved latest in March and the interim reports are adopted for each four-month period. The Group’s strategy is approved as a rule in June. The operational plans for the following year, the long-term financial plans and bonus programs for senior management are approved at the meeting in January. Additional meetings can be convened, if necessary, by the Chairman of the Board, the CEO or a member of the Board. A telephone conference can be arranged for urgent matters requiring immediate attention. The Board of Di-rectors held 10 meetings during 2011.
Chairman of the Board of DirectorsThe Board of Directors appoints a chairman from among its members, who is responsible for managing the activities of the Board, con-vening the Board, and preparing Board meet-ings together with the CEO. The Chairman works closely and actively with the CEO, and should be well-informed on significant issues affecting the company and its stakeholders. The Chairman and the CEO of the Group are re-sponsible for ensuring that the members of the Board are informed of the Company and that notices of meetings, agendas, and all relevant documents are delivered to the members of the Board well in advance of meetings. The Chairman and the CEO of the Group are also responsible for maintaining contacts with the Family Council.
Committees of the Board of Directors The Board of Directors makes decisions about appointing committees and their members. Committees are responsible for preparing is-sues coming up for decision at Board of Direc-tors’ meetings. Fazer’s Board of Directors has appointed an Audit Committee and a Compen-sation Committee. The tasks of the Audit Com-mittee are to take in-depth interest in audits, to control internal auditing, financial reporting and risk management and the company’s financial situation and to participate in interim audits. The Compensation Committee is to prepare issues related to employing and rewarding the CEO and Group Management, monitor the salaries of the management, incentive programs of the personnel and to evaluate the management’s work. The Compensation Committee met four times and the Audit Committee three times during the year.
Corporate Governance
40
FAZER 2011
CEO and Deputy CEO
Fazer’s Board of Director appoints and dismiss-es, if needed, the CEO, who is also the Group President. Under the requirements of the Finnish Companies Act, the CEO is responsible for the day-to-day administration of the company, in line with the instructions of the Board of Directors, and for ensuring that the company’s accounting is carried out in accordance with legal requirements and that the company’s financial management is handled appropriately. The CEO reports to the Board of Directors and informs the Board of Fazer’s operating environment, e.g. customers, competition and market situation and Fazer’s financial position and development. The CEO is supported by the Group Management Team and the Deputy CEO, who is nominated by the Board of Directors when needed.
Group Management Team
The Group Management Team consists of the CEO of the Group, who acts as Chairman, the Managing Directors of the Business Areas and senior managers of certain Group functions. The duties of the Group Management Team are to support the CEO in his/her tasks and to draft propositions to the Board. The Group Manage-ment Team also e.g. coordinates operations across the Group and secures efficient opera-tions on Group level.
Risk management
Risk management is an important part of the management system of Fazer Group. The Board of Directors approves the risk management policy of Fazer Group and monitors its compli-ance. Risk management’s task is to support the implementation of the Group’s strategy and business targets, secure the recognition of risks affecting the company’s business, assess, moni-
tor and anticipate threats and opportunities affecting business and secure the continuity of operations. The management of Business Areas, Business Units and Group functions are responsible for the identification and evaluation of the risks of their respective areas and for mitigating these risks as part of their opera-tive activities. Financial risks are administered by Group Finance. The Group’s Chief Finan-cial Officer is responsible for the management and development as well as reporting of risk management to Board and Audit Committee and also supporting Business Units and Group functions in risk management.
Internal Audit
Internal audit evaluates the efficiency and suit-ability of different operations and monitors the functioning of internal control. It is to make sure that financial and operative reporting is reliable and that the approved operation principles and given instructions are complied with. Internal audit drafts an annual audit plan, the results of which are regularly reported to the Group Man-agement, auditors and the Audit Committee.
Internal Audit reports to the CEO but has also a direct contact to the Chairman of the Audit Committee.
Auditors
The Group’s auditors are appointed by the Shareholders’ Meeting for a term of one year. The auditors are responsible for auditing the Group’s accounts, financial statements, and administration. The details of these duties are contained in the relevant legislation and regulations covering good auditing practises. The auditors participate in the annual meeting of the Board of Directors devot-ed to consideration of the Group’s financial state-ments and to meetings of the Audit Committee.
Ethical principles of Fazer Group
Fazer’s ethical principles are based on interna-tional principles drawn up by the UN Global Compact, which aims to promote corporate sustainable development and good corporate citizenship. The ethical principles of Fazer Group are based on Fazer’s common, strong values and they guide Fazer’s employees in treating custom-ers, co-operation partners and work colleagues in an equal and fair way. Through the ethical principles, Fazer as an employer is committed to providing all its employees in every country with modern and safe working conditions, and to looking after the employees’ health, occupa-tional well-being and work satisfaction, as well as treating every employee in an equal manner. In connection with adopting the ethical principles, a new Fazer Way Helpline service has been taken into use. The service offers all Fazer employees an opportunity to take contact anonymously in questions related to ethical principles.
41
FAZER 2011
2011
1,575.5
3.48.9
-568.7-510.6-88.3
0.4-366.3
54.2
-4.3
49.8
-21.6-6.9
21.3
2010
1,513.6
3.59.5
-539.2-508.7-85.2
0.1-335.1
58.5
-0.1
58.4
-20.1-6.6
31.7
Consolidated profit and loss account
1 JANUARY – 31 DECEMBER, M€
TurnoverChange in stocks of finished goods andwork in progress, increase (+) / decrease (-)Other operating incomeMaterials and servicesPersonnel costsDepreciation and reduction in valueShare of profit in associated companiesOther operating costs
Operating profit
Financial income and expenses
Profit before taxes
Income taxesMinority interest
PROFIT FOR THE FINANCIAL YEAR
42
FAZER 2011
2011
15.7218.3369.2
2.98.1
614.1
61.45.97.7
210.80.4
33.1
319.2
933.3
126.526.5
321.721.3
496.0
44.2
15.1
22.2129.0226.8
378.0
933.3
2010
15.4236.1378.1
3.38.2
641.0
57.22.5
12.3194.7
0.473.7
340.8
981.8
126.526.5
310.531.7
495.2
38.6
18.4
22.90.0
406.8
429.7
981.8
Consolidated balance sheet
M€
ASSETSNon-current assetsIntangible assetsGroup goodwill and badwillTangible assetsInvestmentsShares in associated companiesOther investments
NON-CURRENT ASSETS TOTAL
Current assetsStocksLong-term receivablesDeferred tax receivablesShort-term receivablesFinancial securitiesCash and cash equivalents
CURRENT ASSETS TOTAL
LIABILITIESShareholders’ equityShare capitalPaid-in capital fundRetained earningsProfit for the financial year
SHAREHOLDERS’ EQUITY TOTAL
MINORITY INTEREST
PROVISIONS
CreditorsDeferred tax liabilityLong-term liabilitiesShort-term liabilities
CREDITORS TOTAL
43
FAZER 2011
2010
58.4
55.233.7-3.70.1
-0.7-0.15.1
148.0
-16.9-5.716.7
142.1
-29.027.21.1
-23.7117.7
-48.44.6
-21.6-65.4
-0.10.0
-0.60.07.2-7.10.0
-31.3-9.2
-41.0
11.3
62.8
74.1
2011
49.8
57.133.4-2.04.3
-0.3-0.4-1.9
140.1
-16.7-4.0-5.2
114.2
-20.916.0
1.7-18.992.1
-55.24.5
-13.6-64.3
0.00.1
-3.00.38.2
-180.4125.2
0.0-19.0-68.5
-40.7
74.1
33.4
Consolidated cash flow
M€
CASH FLOWS FROM OPERATING ACTIVITIES: Net profit before extraordinary items Adjustments for: Depreciation according to plan Amortisation on consolidated goodwill Group badwill income recognition Financial income and expenses Profit on sale of fixed assets Share of profit in associated companies Other Operating profit before working capital changes
Working capital changes: Increase (-) or decrease (+) in trade and other receivables Increase (-) or decrease (+) in inventories Increase (-) or decrease (+) in trade payables Cash generated from operations
Interest paid and payments from other financial expenses of operations Interest received and other financial income Dividends received Income taxes paidNet cash from operating activities (A)
CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of tangible and intangible assets Proceeds from sale of tangible and intangible assets Purchase of subsidiaries Net cash used in investing activities (B)
CASH FLOWS FROM FINANCING ACTIVITIES: Increase in short-term loan receivables Decrease in short-term loan receivables Increase in long-term loan receivables Decrease in long-term loan receivables Proceeds from short-term borrowings Repayment of short-term borrowings Proceeds from long-term borrowings Repayment of long-term borrowings Dividends paidNet cash used in financing activities (C)
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS (A+B+C)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS AT END OF PERIOD
44
FAZER 2011
2011
1,575.54.1 53
54.23.4
49.83.2
21.3
614.161.4
257.8496.044.2
393.1933.3
68.788.3
104.719.4 8.0 5.3 58
13,865
2010
1,513.65.0 50
58.53.9
58.43.9
31.7
641.057.2
283.6495.238.6
448.1981.8
70.085.2
110.520.7
9.0 7.3 54
14,294
2009
1,441.124.3
48 44.5
3.1 32.92.3
12.2
669.151.5
246.3433.6
77.4455.9966.9
168.881.4
155.330.4 6.1 2.9 53
14,690
2008
1,159.7-2.8
52 135.0
11.6 101.3
8.7 86.7
673.354.6
347.1434.3
76.0566.9
1,077.2
182.446.8
107.421.0 23.2 19.9
47
12,976
2007
1,192.611.6
5551.24.3
49.04.1
23.5
400.139.6
214.2390.3
31.4232.2653.9
78.350.0
-55.0-13.0 12.1 6.9 64
13,470
Five-year summary
Profit before taxation + Financial charges
Balance sheet total - Non-interest bearing liabilities (average)
Profit before taxation - Taxes
Shareholders’ equity + Minority interest (average)
Shareholders’ equity + Minority interest
Balance sheet total
PROFIT AND LOSS ACCOUNT Turnover, M€
Change, % Turnover outside Finland, % Operating profit, M€ Operating margin, %Profit before taxation, M€ % of turnover Profit for the financial year, M€
BALANCE SHEETNon-current assets, M€ Stocks, M€ Other current assets, M€ Shareholders’ equity, M€ Minority interest, M€ Creditors, M€ Balance sheet total, M€
KEY FIGURESGross investments, M€ Depreciations, M€
Interest-bearing net debt, M€ Gearing, % Return on investment, % (ROI) Return on equity, % (ROE)Equity ratio, %
PERSONNEL (AVERAGE)
x 100
x 100
x 100
ROI =
ROE =
Equity ratio =
45
FAZER 2011
VALUATION PRINCIPLES
Valuation of non-current assets
In the balance sheet, tangible and intangible as-sets have been booked at their acquisition cost deducted with planned depreciations. Deprecia-tions according to plan have been calculated as straight-line depreciations based on the eco-nomic lifetimes of tangible and intangible assets.
The lifetimes are:
• Other long-term expenses 3–10 years• Brands 10 years• Buildings and structures 10–50 years• Machinery and equipment 3–25 years• Group goodwill 5–10 years
Group goodwill is depreciated in 5–10 years. For the acquisition of strategically significant owner-ship in companies in the branch, the lifetime is 10 years. How well the business is established and its development prospects are among consid-erations when assessing the lifetime. The residual values of group goodwill are assessed by impair-ment tests conducted annually, and depreciation plans are changed when necessary.
Depreciation is calculated from the month that use of an asset begins.
Valuation of stocks
Stocks are stated on a first in first out (FIFO) basis at cost or replacement value or probable sales price, whichever is lowest. The acquisition
Principles for preparing financial statement
cost of stocks includes variable costs and a share of the fixed costs of acquisition and manufacture.
Valuation of financial instruments
Financial instruments are valued at fair value. Derivative instruments include currency forward contracts, currency swaps, options, interest rate swaps and cross currency swaps. Hedge account-ing is applied in the valuation of derivative instru-ments. There weren’t any open option contracts 31.12.2011.
Interest rate swaps change the adjustable rates of interest of the company´s loans from financial institutions into a fixed rate of interest and the effect of the swaps has been periodized over the entire loan period. The market values of interest rate swaps are reported in the notes of the balance sheet.
If a derivative instrument is hedging a clearly specified balance sheet item, it is valued at fair value and possible losses and revenues are rec-ognized as expense or income. Net profit or loss is recorded as accrual in balance sheet. The fair value of derivative instruments is based on for-ward prices at closing date.
Cross currency swaps hedges loans in for-eign currency and are valuated at fair value and possible losses and revenues are recognized as expense or income. Net profit or loss is recorded as accrual in balance sheet.
If a derivative instrument is hedging a clearly specified future cash flow, it is valued at fair value and valuations are not recorded as expense or in-
come. The fair value of the derivative instrument is reported in the notes of the balance sheet.
Research and development expenditures
Research and development expenditures are rec-ognized as yearly expenses in the year they incur. Expenditure on development projects that are expected to bring substantial financial benefits to whole business area in the future can be capitalized after consideration and depreciated in 3–5 years.
Pensions
Pension costs are expensed in the year they incur. Personnel employed by Oy Karl Fazer Ab be-fore year 1989 and still working in Finnish group companies are allowed to year-in-service pension after 25, 40 and 50 years of service. The pension liability is included in the statutory provisions and the deferred tax has been taken into account.
Deferred taxes
The calculations of deferred tax liabilities and receivables are based on temporary differences between book values and values in taxation. The tax rates used are the ones confirmed by the authorities in each country at the closing date for the following year. The balance sheet includes all deferred tax liabilities and deferred tax re-ceivables to the value at which they are likely to materialize. Deferred tax receivables of losses are recorded only if it is highly probable that they can be utilized in the near future.
46
FAZER 2011
CONSOLIDATION PRINCIPLES
Scope
The Group’s consolidated financial statements include all group companies in which the Parent Company directly or indirectly holds over 50 per cent of voting rights or otherwise has a control over the company.
Associated companies, in which the Group owns 20 to 50 per cent of the shares, have been consolidated in accordance with the equity meth-od. The Group’s share of profit or losses of the associated companies are included as a separate item in the operating profit of the Group.
Presentation of consolidation principles
Internal ownershipThe consolidated financial statement has been prepared according to the acquisition method. The difference between the acquisition cost of subsidiaries and corresponding shareholders’ equity has been booked either as fixed assets or group goodwill. Group goodwill of this type is amortized as straight-line depreciations over the economic lifetime, normally within 10 years. The company is fully consolidated, if the minority’s share is committed to reclaim.
The result of the acquired subsidiary is in-cluded from the acquisition date and subsidiaries sold during the accounting period till the selling date.
Internal transactions and marginsThe Group’s internal transactions, internal re-ceivables and liabilities, internal profit-sharing as well as substantial internal margins have been eliminated.
Minority interestMinority interest is separated from the Group’s shareholders’ equity and result, and is presented as a separate item.
Translation differencesFinancial statements of foreign group companies are converted to euros according to the average exchange rate of the financial period whereas the balance sheet is converted according to the exchange rate of the closing date. The above-mentioned translation differences as well as ex-change rate differences arising when converting shareholder’s equity of foreign subsidiaries to euros are entered in the retained earnings.
Items in foreign currenciesReceivables and liabilities denominated in for-eign currency have been valuated to Finnish currency at the rates of exchange prevailing at the end of the accounting period. Derivative instrument hedging specified balance sheet item is valued at market value and possible losses and revenues are recognized as expense or income. Net profit or loss is recorded as accrual in bal-ance sheet.
Cash flowCash flow has been prepared according to the Finnish Accounting Board’s general guidelines (30th of January 2007). Dividend income from associated companies and other shares is pre-sented in cash flow from operating activities. The cash pool receivables and liabilities of the parent company are shown in cash flow from financing activities.
NOTES TO FINANCIAL STATEMENTS
47
FAZER 2011
7.4
-2.4-2.5
-9.8
Group companies
OPERATING COMPANIES
Parent company: Oy Karl Fazer Ab
DenmarkFazer Food Services A/SFazer Food A/S
EstoniaFazer Eesti ASFazer Food OÜ
FinlandBlue Service Partners LtdFazer Bakeries LtdFazer Chocolates LtdFazer Food Services LtdFazer Confectionery LtdFazer Restaurants LtdOy NIS-Nordic Ind. Sales Ltd
LatviaSIA Fazer maiznîcas
LithuaniaUAB Fazer Kepyklos
NorwayFazer Food Services AS
RussiaOAO Hlebny domOAO Hlebozavod VasileostrovskyOAO ZvezdnyOOO Fazer Food ServicesOOO Fazer Konfeti
SwedenFazer Bageri ABFazer Food Services ABFazer Konfektyr ABFazer Restauranger ABFazer Services ABGateau AB
OTHER GROUP COMPANIES
CyprusStartplace Holdings Ltd
FinlandKiinteistö Oy Helsingin Kanneltori
The NetherlandsFazer Food B.V.Fazer Bakeries B.V.
RussiaOOO Abela Services - CISOOO Fazer Bakeries Invest
SwedenFazer Food ABLovik Fastighets ABEddo Vending AB
ASSOCIATED COMPANIES
FinlandSonaatti OyUnica Oy
SwedenSvenska Försvarsrestauranger AB
Fazer International Ltd, Skogaholm Bageri AB, OAO BKK Neva and Oy Fazer Services Ab were merged with other Group companies in 2011. OAO Hlebozavod Murinsky and OOO Fazer Pekarni were dissolved in 2011.
Catering services in the Baltic states were sold to the executive management in Latvia. The production kitchen operations in Tallinn are carried on in the new company Fazer Food OÜ. In Sweden, Fazer Food Services AB sold its conference catering services to the executive management.
The Swedish bakery Gateau AB was acquired on 27 April 2011.
Operations acquired in 2011– Gateau AB (Sweden)
Operations divested in 2011– Fazer Food Services AS (Estonia)– SIA Fazer Amica (Latvia)– Fazer Food Services AB’s conference catering services (Sweden)
Effect on the Group’s turnover (M€)
48
FAZER 2011
2011
567.71,007.8
1,575.5
743.6379.729.583.631.319.710.5
257.120.5
1,575.5
2011
5,7047,964
197
13,865
5,5432,667
205774454343165
3,714
13,865
2011
0.1-0.133.4-2.03.98.5
41.53.3
-0.2
88.3
2010
575.1938.5
1,513.6
724.2363.7
27.086.831.819.77.9
232.420.1
1,513.6
2010
6,0328,061
201
14,294
5,4752,793
187820622461162
3,774
14,294
2010
0.30.0
33.7-3.72.9
-2.651.63.00.0
85.2
Notes to the consolidatedprofit and loss account
NOTES TO FINANCIAL STATEMENTS
TURNOVER, M€
Turnover by business areaFazer Food ServicesFazer Bakeries & Confectionery
TOTAL
Turnover by geographical areaFinlandSwedenNorwayDenmarkEstoniaLatviaLithuaniaRussiaOther
TOTAL
NUMBER OF EMPLOYEES
Number of employees by business areaFazer Food ServicesFazer Bakeries & ConfectioneryOther operations
TOTAL
Number of employees by geographical areaFinlandSwedenNorwayDenmarkEstoniaLatviaLithuaniaRussia
TOTAL
DEPRECIATION AND REDUCTION IN VALUE, M€
Intangible assetsGoodwillGoodwill on consolidationNegative goodwill on consolidationOther long-term expenditureBuildings and structuresMachinery and equipmentOther tangible assetsImpairment losses on non-current assets
TOTAL
49
FAZER 2011
2010
6.135.3
100.917.912.264.358.639.40.5
335.1
2010
0.80.50.05.76.9
-4.2-2.80.0-7.0
-0.1
2010
120.46.1
126.5
0.026.526.5
313.2-9.0-0.36.7
310.5
31.7
368.7
495.2
2011
8.036.0
101.320.713.578.958.947.61.4
366.3
2011
1.00.60.30.01.9
-3.5-1.5-1.3-6.2
-4.3
2011
126.50.0
126.5
26.50.0
26.5
342.2-19.0
0.1-1.6
321.7
21.3
369.6
496.0
RESTRICTED EQUITY, M€
Share capital, 1 JanuaryIncrease of share capital and share issue, 31 December 2010Share capital, 31 December
NON-RESTRICTED EQUITY, M€
Paid-in capital fund, 1 JanuaryIncrease of share capital and share issue, 31 December 2010Paid-in capital fund, 31 December
Retained earnings, 1 JanuaryPayment of dividendsChange in Group structureChange in translation differencesRetained earnings, 31 December
Profit for the period
Total non-restricted equity
TOTAL SHAREHOLDER’S EQUITY
OTHER OPERATING COSTS, M€
Other social expensesRentsEnergy and other operating expensesIT expensesTravel expensesFreight and other transport expenses for salesMarketing expensesAdministrative expensesLoss from sales of non-current assets
TOTAL
FINANCIAL INCOME AND EXPENSES, M€
Dividend income Interest income Other financial income Exchange rate gains Total interest income and other financial income Interest expenses Other financial expenses Exchange rate losses Total interest expenses and other financial expenses TOTAL FINANCIAL INCOME AND EXPENSES
Notes to the consolidated balance sheet
50
FAZER 2011
2010
1.80.32.1
0.60.71.2
7.127.234.2
13.832.045.8
22.322.5
0.116.939.5
0.20.80.91.80.0
-1.484.6
0.480.0
2011
1.80.32.1
0.60.71.3
7.428.335.8
23.520.744.2
16.919.5
2.420.842.7
0.21.10.92.01.8
1.3111.4
-0.255.0
NOTES TO FINANCIAL STATEMENTS
COLLATERALS, M€
Mortgage on propertyMortgage on company assetsLiabilities with mortgages used as security
Mortgage on propertyMortgage on company assetsOther collaterals
CONTINGENT LIABILITIES AND OTHER LIABILITIES, M€
Due for payment the following financial periodDue for payment laterTotal leasing liabilities
Due for payment the following financial periodDue for payment laterTotal rental liabilities
Energy commitments– Current value– Nominal value
Mortgage on propertyOtherOther own liabilities
Investments in propertyThe company has invested in property in accordance with the Value Added Tax Act, the revision periods and annual auditable figures of which are presented in the table below.20072008200920102011
Currency forward agreementsCurrent value (included in balance sheet)Nominal value
Interest rate swap agreementCurrent valueNominal value
Notes to collaterals and liabilities
51
FAZER 2011
Addresses
Fazer in Finlandwww.fazer.comwww.fazer.fi
Oy Karl Fazer AbGroup ManagementFazerintie 6, VantaaPO Box 4FI-00941 HelsinkiFINLANDT 020 555 3000F 020 555 3119
Fazer Food Services
Fazer Food Services LtdLaulukuja 6PO Box 37FI-00421 HelsinkiFINLANDT +358 20 729 6000F +358 20 729 6012
Fazer Restaurants LtdLaulukuja 6 PO Box 37FI-00421 HelsinkiFINLANDT +358 20 729 6000F +358 20 729 6013
Fazer Bakeries & Confectionery
Fazer Bakeries Ltd.Vantaa bakeryFazerintie 6, VantaaPO Box 17FI-00941 HelsinkiFINLANDT +358 20 555 3000F +358 20 555 3207
Fazer Bakeries Ltd.Lahti bakeryKasakkamäentie 3PO Box 40FI-15101 LahtiFINLANDT +358 20 555 3000F +358 20 555 3131
Fazer Bakeries Ltd.Hyvinkää bakeryHarkkokatu 2FI-05800 HyvinkääFINLANDT +358 20 555 3000F +358 20 555 3207
Fazer Bakeries Ltd.Lappeenranta bakeryMyllymäenkatu 29FI-53100 LappeenrantaFINLANDT +358 20 555 3000F +358 20 555 3207
Fazer in Swedenwww.fazer.se
Fazer Food Services
Fazer Food Services AB Lindhagensgatan 120PO Box 30170SE-104 25 StockholmSWEDENT +46 8 470 7200F +46 8 470 7201
Fazer Food Services ABRuskvädersgatan 8PO Box 480 62 SE-418 22 GothenburgSWEDENT +46 31 303 71 00F +46 31 303 71 01
Fazer Restauranger ABLindhagensgatan 120PO Box 30170SE-104 25 StockholmSWEDENT +46 8 470 72 00F +46 8 470 72 01
Fazer Bakeries & Confectionery
Fazer Bageri ABLindhagensgatan 120PO Box 30171SE-104 25 StockholmSWEDENT +46 8 470 73 00F +46 8 470 73 01
Fazer Bageri ABEskilstuna bakery Fröslundavägen 1PO Box 5025SE-630 05 EskilstunaSWEDENT +46 16 16 13 00F +46 16 16 13 02
Fazer Bageri ABLidköping bakeryKartåsgatan 3 ASE-531 40 LidköpingSWEDENT +46 510 82 950F +46 510 28 443
Fazer in Russiawww.fazer.ru
OOO Fazer Food ServicesBusiness centerKomplektplusUl. Marata 82RU-191119St PetersburgRUSSIAT +7 812 331 1850F +7 812 331 1851
Fazer Bakeries & Confectionery
OAO Hlebny domSmolenskaya bakeryUl. Smolenskaya 18 ARU-196 084 St PetersburgRUSSIAT +7 812 493 8300F +7 812 493 8313
OAO Hlebny domMurinskoe bakeryUl. Olgi Forsh 10RU-195 276 St PetersburgRUSSIAT +7 812 449 7800F +7 812 449 7813
OAO Hlebny domNeva bakeryUl. Polevaya Sabirovskaya 32197183 St PetersburgRUSSIAT +7 812 313 72 00F +7 812 313 72 20
OAO Hlebozavod Vasileostrovskogo raiona20. Liniya d. 19, V.O.RU-199 026 St PetersburgRUSSIAT/F +7 812 449 7902T +7 812 321 4702
OAO ZvezdnyZvezdny bulvar 23RU-129 075 MoscowRUSSIAT +7 495 225 7200F +7 495 225 7255
Fazer Bakeries Ltd.Oulu bakeryRatamotie 10FI-90580 OuluFINLANDT +358 20 555 3000F +358 20 555 3207
Fazer Bakeries Ltd.Ulvila bakerySammontie 22FI-28400 UlvilaFINLANDT +358 20 555 3000F +358 20 555 3207
Fazer Mill & MixesKasakkamäentie 3PO Box 40FI-15101 LahtiFINLANDT +358 20 555 3000F +358 20 555 3141
Fazer Confectionery LtdVantaa factoryFazerintie 6, VantaaPO Box 4FI-00941 HelsinkiFINLANDT +358 9 876 21F +358 9 876 2267
Fazer Confectionery LtdLappeenranta factoryValtakatu 2PO Box 130FI-53101 LappeenrantaFINLANDT +358 5 671 60F +358 5 671 6309
Fazer Confectionery LtdKarkkila factoryYrittäjäntie 54FI-03600 KarkkilaFINLANDT +358 9 3478 660F +358 9 3478 6690
Oy NIS-Nordic Industrial Sales AbFazerintie 6, VantaaPO Box 4FI-00941 HelsinkiFINLANDT +358-9 875 1399F +358-9 876 2272
Fazer Bageri ABLund bakeryAnnedalsvägen 4SE-227 64 LUNDSWEDENT +46 46 38 56 00F +46 46 38 56 01
Fazer Bageri ABLövånger bakeryHökmark 114SE-930 10 LövångerSWEDENT +46 913 20 070F +46 913 20 121
Fazer Bageri ABUmeå bakeryLagervägen 20PO Box 3040SE-903 02 UMEÅSWEDENT +46 90 10 98 00F +46 90 10 98 53
Fazer Konfektyr ABLindhagensgatan 120PO Box 30172SE-104 25 StockholmSWEDENT +46 8 1220 50 00F +46 8 411 27 62
52
fazer 201101 53fazer 2011
13Fazer’s mission is to create taste sensations. Our mission is based on high quality and delicious taste, products and services that bring well-being and pleasure, and a responsible way of working.” Read more on page:
Fazer in the Baltic Countrieswww.fazer.eewww.fazer.lvwww.fazer.lt
Fazer Eesti ASKadaka tee 70 DEE-19087 TallinnESTONIAT +372 6 502 421F +372 6 502 455
SIA Fazer maiznîcasDruvas iela 2LV-5001 OgreLATVIA T +371 650 710 40F +371 650 710 60
UAB Fazer KepyklosRaudondvario pl. 129 ALT-47188 KaunasLITHUANIAT +370 37 360 233F +370 37 360 266
Fazer in Norwaywww.fazer.no
Fazer Food Services ASFilipstad Brygge 1NO-0250 OsloPO Box 1375, VikaNO-0114 OsloNORWAYT +47 2389 7900F +47 2389 7901
Fazer in Denmarkwww.fazer.dk
Fazer Food Services A/SSkibhusvej 52 A, 1. PO Box 49 DK-5100 Odense CDENMARKT +45 6311 3310F +45 6311 3320
Fazer_vsk11_sisäk_ENG.indd 2 12.3.2012 12.40
FAZER-KONSERNIN VUOSIKERTOMUS 2011
www.fazer.com
FAZ
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UP'S A
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Fazer VSK selka_ENG.pdf 1 5.3.2012 11.03
FAZER GROUP'S ANNUAL REVIEW 2011
Fazer VSK KANSI_ENG.pdf 1 5.3.2012 11.00
Fazer_vsk2011_ENG_KANSI_CS4.indd 2 5.3.2012 11.24
