Annual Report & Review 2018
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Annual Report & Review Report Annual Our values u Long term stable relationships u Working hard u Not being greedy u Achievement u Honesty Musgrave Group plc Musgrave Group Musgrave Group plc Musgrave House, Ballycurreen, Airport Road, Cork, Ireland, T12 TN99 Tel +353 (0)21 452 2100 u Email [email protected] u Follow Musgrave on LinkedIn and Twitter Annual Report www.musgravegroup.com & Review 2018 “ While our “ Our business is all about creating business strategy outstanding brands that outpace looks out to 2025, consumer expectations and our reinterpreting are strongly differentiated in of retail is a process relentlessly competitive markets” of constant evolution in which our brands deliver a consistent and seamless experience online, on the move or at the till” FRANK AND HONEST GOURMET COFFEE COMPANY 4-7 At a glance 8-9 Chairman’s statement 10-17 Message from our CEO 18-21 Growing Good Business 22-25 Keeping ahead of shoppers 26-29 Own brand innovation 30-33 The evolving store 34-39 People and communities 40-45 Financial statements 46 40 years of innovation – SuperValu and Centra Musgrave Group Plc | Annual Report & Review 2018 3 Musgrave at a glance Musgrave at a glance Musgrave at a glance Investing in people At a 2018 financial highlights DayToday €0.1 bn Spain €0.2 bn Daybreak €0.1 bn NI €0.4 bn Dialprix €0.1 bn €0.1 bn Group turnover Profit before tax Net cash Mace € billions € millions € millions Musgrave Retail sales sales €3.9 billion €5.2 billion 41,000 5,000+ 3.9 3.7 85 80 16 71 people employees received graduate employer best training and employed Breakthrough of the year development programme development training for business/management ROI €3.3 bn SuperValu €2.9 bn 2018 2017 2018 2017 2018 2017 Centra €1.9 bn Stores of the year Cosgrove’s Centra, Maugheraboy Investing in brands McCool’s SuperValu, Ballymoney Boyd’s Centra, Junction One Boyd’s Mace, Toomebridge 1,025 81 314 Dano’s SuperValu, Mallow Daybreak, Dungarvan €10 million €34 million €21 million invested in the brand invested in store revamps invested in store revamps Number of retail stores Republic of Ireland Northern Ireland Spain over two years and refreshes and refreshes as of 31 December 2018 (RoI and NI) (RoI and NI) SuperValu 219 35 – Centra 460 89 – Awards Mace – 88 – DayToday 145 82 – Daybreak 234 – – 11 4 Dialprix – – 83 Checkout Best in Fresh awards for Centra and Top Family Business in IGD Award – Service Design Awards for SuperValu and Mace at the Neighbourhood the European Family Shopper Insight Award Donnybrook Fair 5 – – Centra Retailer Awards Business Awards for Centra 4 Musgrave Group Plc | Annual Report & Review 2018 Musgrave Group Plc | Annual Report & Review 2018 5 Musgrave at a glance Musgrave at a glance Taking care of our world Reducing our impacts on the environment abon ooin Energy use in buildings per sqm 45 900 800 40 700 Musgrave Triathlon 600 35 2 500 thoursands 2 MJ/m 400 30 300 1.1 million €4.4 million 100 25 200 tonnes CO 100 meals donated to Irish charities through raised for charities autism-friendly 20 0 FoodCloud since 2002 SuperValu stores 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 l iion l iion alld 45 0.95 Plastic packaging reduction 40 0.90 We are committed to ensuring 100% of our own brand, fresh produce and in-store packaging will be 35 km 0.85 2 thoursands 2 recyclable, reusable or compostable by 2025 30 0.80 kg CO 25 0.75 tonnes CO 20 0.70 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ldod Total waste generation 100 25 90 20 460,000kgs 2.7 million 100% 80 15 of non-recyclable black plastic single-use plastic SuperValu compostable 70 10 fruit & veg trays have been replaced bags removed from our Frank and Honest kilotonnes with recyclable alternatives supply chain coffee cups and lids 60 5 50 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Retail partner 20/20 programme Making our own brand food healthier Our sustainability strategy is aligned with the UN Sustainable Development Goals Our programme of product reformulation is seeing results Before Before Before 20% reduction in carbon emissions by 2020 Reduced by Reduced by Reduced by (compared to 2014 figures) 91% 73% 56% SuperValu Supersun Pouch Juice Dart Energy Drink 1l Centra Chilled Cranberry blackcurrant 10 pack 200ml Juice Drink 6 Musgrave Group Plc | Annual Report & Review 2018 Musgrave Group Plc | Annual Report & Review 2018 7 Chairman’s statement Chairman’s statement Driven by 018 was a year of good progress for the epitomise the way Musgrave has consistently business across both retail and wholesale, evolved retail in Ireland, staying ahead of and the fourth consecutive year of improved consumer and industry trends to offer something profits. This result has been driven by our different and better. Both brands have undergone purpose, Growing Good Business, which major transformations over the past 40 years – in challenges us to deliver sustainable profits, terms of store design, own brand, food experiences not just for the benefit of the business and and an increased emphasis on providing healthy shareholders, but for our partners, local choices. However, the one element that has communities and the wider economy. remained consistent is the outstanding local delivery from our independent retail partners who Turnover was up 3.8% to €3.9 billion and profit have a passion for the communities in which they before tax of €84.5 million was a 6% increase on live and work. These entrepreneurs, coupled with the previous year. Net assets were €410 million, an our vision for food retail in Ireland, hold the key to increase of €79 million on 2017 and the business our success going forward. ended the year with net cash of €16 million. This is a good financial performance and I would like to thank This year the Board has been forging a clear strategy all our people for their continued dedication and for reinterpreting retail and wholesale that will ensure commitment to the business. our brands remain leaders in their markets. I have personally experienced how this vision of Musgrave I would like to acknowledge in particular our retail has energised our people; they have shown great partners, who are dedicated, community-focused insight and innovation in developing a clear strategy entrepreneurs at the heart of their communities that blends digital technology with real, personal who deliver a unique and local service to shoppers in-store experiences. every day. Our priority is to build our pool of talent and to This positive financial performance needs to be set develop skills from within our business, ensuring against a backdrop of Brexit, and we are acutely that we have the people to deliver on our future aware of the disruption this will cause in the short vision. The world of work is changing; businesses term to the economy, consumer confidence and the today are data driven and the food retail industry food sector on the island of Ireland and beyond. is no different. I am pleased to report that Adriaan Thierry has joined the Board of Musgrave I want to emphasise that the Board has supported as a non-executive director to assist with the and helped inform detailed preparations for Brexit, delivery of our digital future. which Chris and his team have been working on for the past two years. We are confident that whatever We are also working to ensure that our business “Our priority is to build our pool of talent the final political arrangements, we have made the consciously becomes more diverse and inclusive. best possible plans to protect our business, partners This is an important issue for the Board with and to develop skills from within our and consumers from potentially negative impacts. new policies in place to increase diversity within Musgrave. Our shareholders and the Musgrave family play business, ensuring that we have the people an important role in allowing the business to Finally, I would like to extend my thanks to Chris and work towards long term and stable growth. As a the management team for their leadership, their to deliver on our future vision” purpose-led business, Growing Good Business hard work and their continued vision and passion for is an inspirational catalyst for growth, inspiring the business which is delivering strong results; and to Nicky Hartery, Chairman, Musgrave our long term vision for feeding Ireland and the Family Board Directors and Non-Executive Board exporting internationally. Directors for their support. This year we celebrate the 40-year anniversary of SuperValu and Centra. Both market-leading brands Nicky Hartery, Chairman 8 Musgrave Group Plc | Annual Report & Review 2018 Musgrave Group Plc | Annual Report & Review 2018 9 Message from our CEO Message from our CEO Reinterpreting retail, €84.5million transforming pre-tax profit in 2018 wholesale As a family business with the clear purpose of Growing Good Business and a compelling vision for reinterpreting food retail for consumers in Ireland, By 2025 we see Northern Ireland and Spain, we technology as fundamentally have continued to put growth and changing the relationship with the innovation at the heart of everything consumer we do. “At every opportunity ver the past 12 months, this has planning for Brexit, making all necessary preparations What these figures tell us is that our business meant finessing and rolling for whatever outcome is eventually decided.