The History of The CRM Group

 

CRM Group manufactures confectionery products. The Company produces a variety of chocolate products. CRM Group serves customers throughout Brazil.

Lindt joint venture to spark retail presence in Brazil

By Kacey Culliney from ConfectionaryNews.com

11-Mar-20142014-03-11T00:00:00Z

Last updated on 12-Mar-2014 at 14:53 GMT2014-03-12T14:53:56Z

Lindt has over 200 retail stores across the globe and is present in 500 airports across the globe. Photo credit: The Moodie Report

Related tags: CRM Group, Lindt & Sprüngli, Brazil, Chocolate, Premium, Retail, Outlets, Stores, Network, Expansion

Lindt & Sprüngli will open three retail stores in São Paulo this year thanks to a joint venture with Brazilian premium chocolate specialist the CRM Group.

The Swiss chocolate group will own a majority stake of 51% in the joint venture Lindt & Sprüngli.

Lindt has been present in Brazil since 1969 through a local distributor and can also be found in duty free at two of the country’s largest airports - São Paulo and Rio de Janeiro. The joint venture marked the company’s first move to establish a retail network in the country.

Speaking to ConfectioneryNews, Lindt’s corporate communications officer Nina Keller said the move would deepen the company’s foothold in a country that was brimming with prospects.

“It’s the fifth biggest chocolate market in the world, so there’s big potential. There are 31 million potential consumers in Brazil’s social upper class and that’s our target because Lindt is a premium brand,” she said.

The ABICAB (Brazilian Association of Chocolate, Cocoa, Peanut,  and Derivatives) recently set up an exclusive board for the premium chocolate segment, estimating that premium chocolate accounts for around 6% of all chocolate confectionery sales in the country.

Keller said Lindt had experienced a strong sales growth in Brazil over the last few years via local distribution and so the company now wanted to expand further with an official retail presence.

Lindt can benefit from CRM’s experience and network

Lindt has been expanding its global network over the past few years, setting up subsidiaries in Japan, Russia and South Africa in recent years.

 

Its retail concept was established back in 2009 and Keller said that with around 200 stores worldwide, this network now generated about 9% of Lindt’s overall sales.

 

Asked why Lindt had opted to strike a joint venture in Brazil, rather than just set up a subsidiary like elsewhere, she said the company had local knowledge to gain from the CRM Group.

 

“It’s really hard if you don’t know the market and you go there and want a prime location you need a really good network. The CRM Group has this, they already have 800 shops up and running - their own and franchises – so they are very well established,” she said.

The CRM Group also dealt in premium chocolate, she added, so a partnership made sense.

Shopping malls by 2015

Beyond the three São Paulo stores in 2014, Lindt plans to roll out into shopping malls and other premium locations in 2015, Keller explained.

“The company will target the big cities – where the people live that consume chocolate, people that have the purchasing power,” she said.

Keller added that Lindt was very happy that it would have a retail presence in the country for the World Cup.

“We’ve been at the Olympics in London and we had a little presence in Sochi this year. I think it’s a great opportunity to present the brand and allow people to sample it during the event. It’s a good way of getting consumers to experience a brand,” she said.

 

Cloetta in brief

 

Cloetta, founded in 1862, is a leading confectionery company in the Nordic region, The Netherlands, and Italy. Cloetta is manufacturing and marketing sugar confectionery, chocolate products, pastilles and chewing gum. In total, Cloetta products are sold in more than 50 markets worldwide.

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President and CEO David Nuutinen comments on the results for the third quarter of 2015

10 November 2015 | 08:00 CET | Svensk version

Strong sales growth and improved operating profit

 

David NuutinenCloetta’s operating profit (EBIT) improved in the quarter and amounted to SEK 212m (178). The operating profit margin rose to 14.5 per cent (13.7). Furthermore, sales increased through organic growth as well as acquisition-driven growth and foreign exchange movements.

 

The improvement in operating profit is due mainly to an adjustment in the contingent earn-out consideration for acquisitions. Operating profit has been negatively affected by exchange rate differences and one-off costs related to the acquisition of Locawo B.V. (Lonka).

 

Operating profit, adjusted for one-off items, was SEK 194m (193). Operating profit, adjusted for one-off items, has been affected by increased marketing investments. The operating profit margin, adjusted for one-off items, was 13.3 per cent (14.8). Profit for the period improved to SEK 130m (87).

Strong cash flow and decrease in net debt/EBITDA

Cash flow from operating activities remains strong and amounted to SEK 174m (75) in the quarter. Net debt/EBITDA decreased substantially compared to the same quarter of last year. Despite the acquisition of Lonka during the quarter, net debt/EBITDA only increased from 3.30 to 3.39 compared to the second quarter of 2015.

 

Confectionery market

The confectionery market showed overall positive development in Sweden, Norway, Denmark and Finland. In the Netherlands and Italy, market development was slightly negative during the quarter.

 

Increase in both organic and acquisition-driven growth

 

Cloetta’s sales for the quarter grew by 12.0 per cent, of which organic growth accounted for 4.2 per cent, the acquisition of Lonka for 6.6 per cent and exchange rate differences for 1.2 per cent. I am particularly pleased that our organic sales growth reached 4.2 per cent despite the fact that we were negatively affected during the quarter by both ongoing contract negotiations and declining sales in a few markets. However, the contract negotiations with one large customer in Sweden has now been finalized.

 

Cloetta’s sales increased in all markets except Finland, Norway and Italy. The upward sales trend in Sweden was driven by the new Pick & Mix concept and sales in Denmark rose primarily within pastilles. Sales in the Netherlands and Germany rose primarily within  bags. Sales in Norway decreased within pastilles and in Finland, sales were down within  bags. Sales in Italy continued to decline and Cloetta has thus not seen growth in Italy since the fourth quarter of 2013.

 

Stable raw material prices

Raw material prices were largely unchanged during the quarter, but with continued high prices for cocoa and nuts in particular. Over the past few quarters Cloetta has raised its prices primarily in Sweden and Norway to compensate for unfavorable exchange movements.

Integration of Lonka according to plan

Lonka, which was acquired on 17 July 2015, has significantly strengthened Cloetta’s position in the Netherlands. The Nordic countries and the UK are other important markets, especially within Pick & Mix.

 

The process of integrating Lonka into Cloetta’s organization has begun and is proceeding according to plan. A new joint sales and marketing organization has been set up in the Netherlands and plans for how Lonka products will be handled and launched in other markets are under preparation. Through the acquisition of Lonka, Cloetta has gained two additional factories. Efforts to coordinate integration of the factories and working methods have started. When all of the cost synergies from the acquisition of Lonka have been realized, we expect these to support Cloetta’s target of an EBIT margin, adjusted for one-off items, of 14 per cent. With regard to sales and profitability, Lonka has developed according to plan during the quarter.

 

Cloetta a member of Bonsucro

 

Cloetta has continued to step up its sustainability commitment and has therefore become a member of Bonsucro, an organization devoted to addressing the sustainability challenges in the sugarcane sector.

 

Strategy stands firm

When I took over as CEO of Cloetta this summer, I said that my ambition was to continue on the profitable growth path driven by organic sales growth, continued cost-efficiencies and new initiatives, including potential acquisitions. I am therefore pleased to state that in my first quarter as CEO we were able to demonstrate both continued organic sales growth and the acquisition of Lonka. This shows that the strategy stands firm.

 

Our focus moving forward is naturally on sustained profitable growth, but new initiatives within Pick & Mix and the integration of Lonka are also prioritized areas.

 

The information contained in this press release is such that Cloetta is required to disclose pursuant to the Swedish Financial Instruments Trading Act and/or the Swedish Securities Markets Act. The information was submitted for publication on 10 November 2015 at 08:00 a.m. CET.

 

Contacts

•Jacob Broberg, Senior Vice President Corporate Communications and Investor Relations, 46 70-190 00 33

•Danko Maras, Chief Financial Officer, 46 76-627 69 46

 

 

Cloetta Fact sheet

Cloetta, founded in 1862, is a leading confectionery company in the Nordic region, The Netherlands, and Italy. Cloetta is manufacturing and marketing sugar confectionery, chocolate products, nuts, pastilles and chewing gum. In total, Cloetta products are sold in more than 50 markets worldwide. Key Facts Annual sales SEK 5,3 billion in 2014 Underlying EBIT of SEK 635m Leading local brands in 6 countries Leading market positions in Sweden, Finland, Norway, Denmark, The Netherlands and Italy 2,500 employees in 14 countries Production at 11 factories in 6 countries Listed on Nasdaq Stockholm

Strategies

The Group focuses on volume growth and margin expansion, cost efficiency and employee development. Strong local brands and presence combined with a widening of the product range as well as the launch of and potential acquisition of new products and brands will support the growth. Improved processes and systems will improve cost efficiency.

Vision, Mission and Core values

Cloetta’s vision is to be the most admired satisfier of Munchy Moments and the mission is to bring a smile to your Munchy Moments. Cloetta has established four core values that guide our way of working and acting, both within and outside the company. These core values are Focus, Passion, Teamplay and Pride.

Products and brands

Cloetta owns some of the strongest brands on the market, e.g Läkerol, Cloetta, Jenkki, Kexchoklad, Malaco, Sportlife, Saila, Red Band, Sperlari and Nutisal, most of them with a long heritage tradition. Cloetta has leading brands within the different product categories in several countries.

Chocolate

Within chocolate Cloetta has a leading position in Sweden with the brands Kexchoklad, Polly, Center and Plopp. In Finland Cloetta has a strong local position with the brands Tupla, Royal, Polly and Center. In Norway popular brands are Center, Sportlunch and Bridge, and in Italy Cloetta is the leader in Christmas seasonal products with Sperlari.

Sugar confectionery

In Norway, Finland, Sweden and Denmark, Cloetta has harmonised its leading brand Malaco and in the Netherlands the brand Red Band. Additional strong brands include Ahlgrens bilar, Venco, Galatine, The Jelly Bean factory, Chewits and Juleskum. In Italy the brand Dietorelle was the first sugar-free .

In Italy, Cloetta has strong local position with the seasonal brand Sperlari and with the sweetener brand Dietor.

Pastilles and chewing gum

The Group’s largest pastille brand, Läkerol, is more than 100 years old. Other leading pastilles brands are Mynthon, King and Saila.

Within chewing gum Cloetta is the leader in Finland with the brand Jenkki and has a leading position in the Netherlands and Belgium with Sportlife and Xylifresh. Cloetta has also paved the way for the use of xylitol in chewing gums.

Nuts

In 2014 Cloetta acquired Nutisal, a leading Swedish producer of dry roasted nuts. The Swedish market accounts for around half of sales, but Nutisal is also sold in Denmark, Norway, Germany and the Benelux countries.

Market and sales

Cloetta’s six main markets are Sweden, Italy, Finland, the Netherlands, Norway and Denmark. In these markets Cloetta has its own sales and distribution organisation with strong customer relations and category expertise. In total, Cloetta products are sold on 50 markets world-wide. Outside the key markets, a distributor model is used.

Production

Cloetta has 11 factories covering most production technologies. The factories are found in Sweden, Italy, the Netherlands, Belgium, Slovakia and Ireland.

The market

The confectionery market is fairly insensitive to cyclical fluctuations, and is one of the most impulse driven goods groups within retail. Consumption patterns and flavour preferences vary between markets, for example, chocolate consumption is significantly lower in the Nordic countries compared with the rest of Europe, while the consumption of sugar confectionery is higher in the Nordic countries than the rest of Europe. Confectionery consumption also varies a lot, for example the per capita consumption in the Nordic countries is more than twice the consumption in Italy.

 

Cloetta, founded in 1862, is a leading confectionery company in the Nordic region, The Netherlands, and Italy. Cloetta is manufacturing and marketing sugar confectionery, chocolate products, nuts, pastilles and chewing gum. In total, Cloetta products are sold in more than 50 markets worldwide.

 

Products and brands

 

Cloetta owns some of the strongest brands on the market, e.g Läkerol, Cloetta, Jenkki, Kexchoklad, Malaco, Sportlife, Saila, Red Band, Sperlari and Nutisal, most of them with a long heritage tradition. Cloetta has leading brands within the different product categories in several countries.

 

Chocolate

 

Within chocolate Cloetta has a leading position in Sweden with the brands Kexchoklad, Polly, Center and Plopp. In Finland Cloetta has a strong local position with the brands Tupla, Royal, Polly and Center. In Norway popular brands are Center, Sportlunch and Bridge, and in Italy Cloetta is the leader in Christmas seasonal products with Sperlari.

 

Cloetta in brief

 

•Annual sales SEK 5,3 billion in 2014

•Operating profit, adjusted of SEK 632m

•Leading local brands in 6 countries

•Leading market positions in Sweden, Finland, Norway, Denmark, The Netherlands and Italy

•2,500 employees in 14 countries

•Production at 13 factories in 6 countries

•Listed on Nasdaq Stockholm.

 

Sugar confectionery

 

In Norway, Finland, Sweden and Denmark, Cloetta has harmonised its leading brand Malaco and in the Netherlands the brand Red Band. Additional strong brands include Ahlgrens bilar, Venco, Galatine, Chewits and Juleskum. In Italy the brand Dietorelle was the first sugar-free .

 

In Italy, Cloetta has strong local position with the seasonal brand Sperlari and with the sweetener brand Dietor.

 

Pastilles and chewing gum

 

The Group’s largest pastille brand, Läkerol, is more than 100 years old. Other leading pastilles brands are Mynthon, King and Saila.

 

Within chewing gum Cloetta is the leader in Finland with the brand Jenkki and has a leading position in the Netherlands and Belgium with Sportlife and Xylifresh. Cloetta has also paved the way for the use of xylitol in chewing gums.

 

Nuts

 

In January 2014 Cloetta acquired Nutisal, a leading Swedish producer of dry roasted nuts. The Swedish market accounts for around half of sales, but Nutisal is also sold in Denmark, Norway, Germany and the Benelux countries. Nutisal holds the number two position in the branded nuts market in Sweden. Production, i.e. dry roasting, season and packaging, takes place in Helsingborg, Sweden.

 

Market and sales

 

Cloetta’s six main markets are Sweden, Italy, Finland, the Netherlands, Norway and Denmark. In these markets Cloetta has its own sales and distribution organisation with strong customer relations and category expertise. In total, Cloetta products are sold on 50 markets world-wide. Outside the key markets, a distributor model is used.

 

Production

 

Cloetta has 13 factories covering most production technologies. The factories are found in Sweden, Italy, the Netherlands, Belgium, Slovakia and Ireland.

 

Strategies

 

The Group focuses on volume growth and margin expansion, cost efficiency and employee development. Strong local brands and presence combined with a widening of the product range as well as the launch of and potential acquisition of new products and brands will support the growth. Synergies, production restructuring and improved processes and systems will improve cost efficiency.

 

Cloetta considers closing factory in Dieren

20 November 2015 | 08:40 CET

Cloetta’s acquisition of Locawo B.V. (Lonka) in July 2015 will make it possible to create cost savings.

 

Cloetta is active in a highly competitive market and must therefore constantly be cost effective. The acquisition of Lonka creates synergies in administration, sales, procurement and supply chain. Cloetta has evaluated how cost savings can be achieved through the closure of the factory in Dieren, the Netherlands. The factory has 34 employees.

 

It is Cloetta’s intention to close the factory in Dieren at the end of 2016 and transfer production to the factory in Levice, Slovakia. The factory in Levice will be extended as part of the transfer. The transfer will also make it possible to insource additional production to the factory in Levice.

 

The proposed closure of the factory and transfer of production would give rise to one-off costs and capital investments totalling approximately SEK 120m. The bulk of the one-off costs and capital investments will occur in 2016.

 

The closure of the factory in Dieren, insourcing of production and synergies in administration, sales and procurement from the acquisition of Lonka will generate savings of at least SEK 35m on an annual basis.

 

 

The savings will have a gradual effect in 2016 and in 2017 are expected to contribute to Cloetta’s target of an adjusted EBIT margin of 14 per cent. The full run rate of the savings is expected in 2018.

Cloetta will initiate consultations with the local works council and the European Works Council.

The information contained in this press release is such that Cloetta is required to disclose pursuant to the Swedish Financial Instruments Trading Act and/or the Swedish Securities Markets Act. The information was submitted for publication on 20 November 2015 at 08:40 a.m. CET.

 

Media contact

Jacob Broberg, SVP Corporate Communications & Investor Relations, +46 70 190 00 33.

 

Cloetta is organised functionally. Responsibility for the procurement and production lies within the supply chain organisation. The four region units are responsible for the sales and marketing of the Group’s products. Cloetta has approximately 2,500 employees.

 

The Chief Executive Officer is responsible for the business development and leads and coordinates the daily operations in accordance with the Board of Directors’ guidelines and instructions.

 

Strategic Development, Corporate Communication and Investor Relations, Business Planning and Control, as well as certain financial operations such as Tax, Treasury, Insurance and Financial Control are run from the head office. Central marketing at the head office is responsible for innovation and development of category strategies.

 

The IT function is a group-wide organisation, which support the whole group with locally based personnel.

 

Human Resources and Finance & Administration are stationed locally and serve as support functions for the local sales and marketing organisation and for the supply chain organisation.

 

The supply chain organization is responsible for procurement and the production at the Group’s thirteen factories, two in Sweden, one in Belgium, four in the Netherlands, four in Italy, one in Slovakia and one in Ireland.

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Svensk version

Cloetta’s main markets are the countries where Cloetta has its own sales and distribution organisations, and consist of Sweden, Italy, Finland, the Netherlands, Norway and Denmark. In addition, Cloetta’s products are sold through distributors in some 40 additional markets.Share of Cloetta´s sales

 

Cloetta’s total sales in 2014 amounted to SEK 5.3bn (4.9), where Sweden was the largest single market and accounted for approximately 32 per cent of total sales. The other Nordic countries accounted for around 28 per cent, Italy for around 14 per cent, the Netherlands for around 12 per cent and the other markets for around 14 per cent of total sales.

 

Compared to 2013 net sales were up by 8.6 per cent, of which organic sales rose by 1.0 per cent, acquisitions accounted for 4.3 per cent and exchange rate differences represented 3.3 per cent.

 

Strong presence

 

Cloetta has a strong position in its main markets, with local brands in the segments for sugar and chocolate confectionery, nuts, pastilles and chewing gum, and is therefore an important supplier to the retail trade.

 

Over half of Cloetta’s sales consist of sugar confectionery and around 17 per cent of chocolate. Pastilles account for roughly 16 per cent, chewing gum for 7 per cent, nuts 3 per cent and other products, mainly sweeteners, for 5 per cent.

 

Concentration of the grocery retail tradeNet sales by country

 

In Cloetta’s main markets in the Nordic region, around 80 per cent or more of total of total grocery sales are attributable to the three largest chains in each country. In the Netherlands the share is around half, but is significantly lower in Italy.

 

Price strategies

 

The concentrated grocery retail trade has exerted powerful price pressure on all of its suppliers in the past few years. To a large extent, Cloetta has handled this through efficiency improvements. To offset increased raw material costs and exchange rate changes, Cloetta’s strategy is to pass these on by raising prices. On the other hand, falling prices for raw materials can force Cloetta to lower its prices.

 

Travel retailNet sales by category

 

For many years Cloetta has had substantial sales to ferry lines, charter tour operators and airports, through the so-called Travel Retail.

 

Well known brands and unique packages in terms of both appearance and size are two of the most important competitive tools, and Cloetta is continuing to develop attractive product innovations in these areas