12 Goals and strategies

Cloetta’s value chain

Cloetta creates value through the purpose “We believe in the Power of True Joy”. Cloetta creates value for the company and its stakeholders through great products, innovative product development, efficient purchasing and high-quality manufacturing, as well as good relations with the retail trade and marketing that strengthens the brands. 3 Manufacturing

• Cloetta had 2,629 employees during 2 2019 and total personnel costs amount- Purchasing ed to SEK 1,440m. Cloetta’s eight factories had 1,680 employees.

• During the year, Cloetta produced 106 1 • Cloetta’s total purchasing costs amount- thousand tonnes of candy, chocolate, Product ed to SEK 4,023m during the year, of chewing gum, pastilles and nuts. development which SEK 2,539m was for raw mate-

Value creation rials and consumables. The three main raw materials in terms of purchasing • Product development is based on costs are sugar, cocoa and milk powder. a combination of consumer-driven needs/preferences, innovation and opportunities in the existing manufacturing network.

Environment • Continuous improvements enable more efficient energy consumption in manufacturing aimed at reducing Sustainable corporate development • Cloetta’s suppliers are subject to an carbon dioxide emissions. approval process in which product safety, quality and social and environ- • Increased resource efficiency through mental requirements are assessed. reduced wastage. • Cloetta has prioritized increasing the proportion of natural ingredients. The • Cloetta promotes sustainable manu- • Systematic environmental manage- goal is for Cloetta’s product portfolio facturing of prioritized raw materials ment is being used in all factories. to be free from artificial flavorings such as cocoa, palm oil and shea Workplace environment and artificial colorants during 2020. butter. Read more on pages 52–53. • Focus on leadership, management • Cloetta develops and offers lower- of workplace environment risks and sugar or sugar-free alternatives for reduction of work-related injuries. its major brands. Under the , • Health and safety activities with a Red Band and Venco brands, Cloetta systematic way of working are part of has launched lower-sugar and sugar- daily follow-up and control. free alternatives. Product safety • All factories have a product safety system.

• The factories work proactively with product safety and quality to ensure more satisfied customers and fewer product complaints.

Cloetta Annual and Sustainability Report 2019 Goals and strategies 13

Profit for the year SEK 498m 5 Consumers Shareholders A certain share of non-restricted equity • Cloetta believes in “The Power of True is distributed to Cloetta’s shareholders in 4 Joy” in that our products give that spe- the form of dividends, after the business Customers cial touch to people’s daily life. Cloetta has been provided with the capital provides strong brands and a large necessary for continued development. For range of pick & mix products. 2019 the Board of Directors has proposed • Total net sales amounted to • Cloetta always provides feedback on a dividend of SEK 1.00 per share, which SEK 6,493m. Cloetta’s largest customer complaints and points of view. corresponds to approx. 58 per cent of the category is the grocery retail trade. profit for 2019, to be paid in 2020. In 2019, The service trade is also a very impor- SEK 289m was distributed to the share- tant customer group. holders through dividend distribution.

Distributed value SEK 5,981m*

t Shareholder, • Cloetta provides high-quality prod- SEK 289m 5% ucts that are marketed responsibly.

• Consumers are offered a wide range of • Cloetta fulfils environmental and products with non-artifical flavorings food safety requirements, such as and colorants. t Suppliers of raw through BRC and ISO certification. • Cloetta uses environmentally adapted materials and consumables, SEK 2,539m • Cloetta is reducing the amount packaging solutions. 42% of transportation packaging and optimizing transportation to improve financial and environmental perfor- mance.

t Employees, SEK 1,440m 24%

Tax information Cloetta paid SEK 1,464m (1,326) in various taxes in 2019. These were mainly value-added tax, sugar tax and employment-related taxes. The difference between corporate income tax t Other suppliers, paid and the income tax charge for the year is mainly driven by timing differences. SEK 1,501m 25%

Creditors, Tax paid per country financial partners, Taxes paid t SEK 62m 1% Corporate 1% qq 1% t Corporate income tax income tax 4% q qOther 1% qBelgium UK 4% q 2% SEK 150m 3% t Employment- Value-added * Generated value of SEK 6,493m related tax u 13 % 14% excluding profit for the year, amortization, taxes u t 41% t 19% depreciation and impairments and Total 13% including paid dividends. Total retained SEK 1,464m economic value of SEK 512m. t The Economic impact Sugar tax 9% Manufacturing and sales of Cloetta’s 35% u u 43% products generate economic value that benefits its stakeholders. Tax paid in Norway and Denmark is proportionally higher due to sugar taxes.

Cloetta Annual and Sustainability Report 2019