Lavazza Annual Report ENG.Pdf
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ANNUAL REPORT 2019 COMPANY OFFICERS - GROUP STRUCTURE COMPANY OFFICERS GROUP STRUCTURE BOARD OF DIRECTORS Chairman Alberto Lavazza LUILUGIIGI LAVA LAVAZZAZZA S.p.A .S .p.A. CONTENTS Vice Chairmen Giuseppe Lavazza Marco Lavazza Company Officers Chief Executive Officer Antonio Baravalle LAVAZZA LAVAZZA OTHER BRAND OTHER SERVICE PROFESSIONAL SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES COMPANIES Group Structure SUBSIDIARIES Directors Antonella Lavazza Francesca Lavazza 100% 97,3% 80% 100% 99% Directors’ Single Report on Operations LAVAZZA PROFESSIONAL NIMS S.p.A. KICKING HORSE LAVAZZA TRADING COFINCAF S.p.A. Manuela Lavazza HOLDING EUROPE S.r.l. COFFEE Co. Ltd SHENZHEN Co. Ltd Pietro Boroli 100% 100% 100% 100% Gabriele Galateri di Genola 93% LAVAZZA PROFESSIONAL LAVAZZA PREMIUM CARTE NOIRE LAVAZZA SPAGNA LAVAZZA CAPITAL Robert Kunze-Concewitz (UK) Ltd COFFEES Corp. S.a.s. S.L. S.r.l. LAVAZZA GROUP Antonio Marcegaglia 100% LPCC Canadian 100% 100% 100% Consolidated Financial Statements LAVAZZA PROFESSIONAL Branch CARTE NOIRE LAVAZZA MAROC IMMOBILIARE I.N.N.E.T. FRANCE S.a.s OPERATIONS S.a.r.l. S.r.l. at 31 December 2019 S.a.s. BOARD OF STATUTORY AUDITORS 100% 100% 100% LAVAZZA PROFESSIONAL LAVAZZA KAFFEE MERRILD KAFFE Accounting Statements GERMANY G.m.b.H . G.m.b.H. ApS Chairman Gianluca Ferrero 100% 100% 100% Consolidated Statement of Financial Position LAVAZZA PROFESSIONAL LAVAZZA DEUTSCHLAND MERRILD BALTICS Statutory Auditors Angelo Gilardi HOLDING NORTH AMERICA G.m.b.H. SIA Consolidated Statement of Profit or Loss Inc. Bernardo Bertoldi 100% 100% Consolidated Statement of Comprehensive LAVAZZA PROFESSIONAL LAVAZZA FRANCE Income NORTH AMERICA LLC S.a.s. Consolidated Statement of Cash Flows INDEPENDENT AUDITORS LPNA Canadian 100% Branch LAVAZZA SWEDEN AB Consolidated Statement of Changes in Equity EY S.p.A. 100% 100% LAVAZZA PROFESSIONAL LAVAZZA COFFEE JAPAN GK (UK) Ltd Notes to the Consolidated Financial 100% Statements LAVAZZA AUSTRALIA PTY Ltd Independent Auditors’ Report 100% LAVAZZA AUSTRALIA OCS PTY Ltd (”BLUE POD”) 99,53% LAVAZZA DO BRASIL Ltda LUIGI LAVAZZA S.p.A. Financial Statements at 31 December 2019 100% ALMADA 100% Accounting Statements LAVAZZA NETHERLANDS B.V. Balance Sheet 99,99% FRESH & HONEST LTD Statement of Profit or Loss 97,54% Statement of Cash Flows LAVAZZA ARGENTINA S.A. Notes to the Financial Statements Statutory Auditors’ Report Independent Auditors’ Report 6 7 DIRECTORS’ SINGLE REPORT CONTENTS ON OPERATIONS Company Officers Group Structure Directors’ Single Report on Operations LAVAZZA GROUP Consolidated Financial Statements Dear Shareholders, at 31 December 2019 The financial year ended 31 December 2019 closed with a Group’s Accounting Statements consolidated profit of € 127,382 thousand based on the IFRS and Consolidated Statement of Financial Position Luigi Lavazza S.p.A.’s profit of € 106,187 thousand based on Italian Consolidated Statement of Profit or Loss Consolidated Statement of Comprehensive GAAP (OIC). Income With reference to Article 2428 of the Italian Civil Code and Article Consolidated Statement of Cash Flows Consolidated Statement of Changes in Equity 40 of Legislative Decree No. 127(2-bis) of 9 April 1991, this Report on Operations includes both information on the financial state- Notes to the Consolidated Financial Statements ments of the Parent Company Luigi Lavazza S.p.A., and the Report on Operations of the Consolidated Financial Statements Independent Auditors’ Report of the Lavazza Group. LUIGI LAVAZZA S.p.A. Financial Statements at 31 December 2019 Accounting Statements Balance Sheet Statement of Profit or Loss Statement of Cash Flows Notes to the Financial Statements Statutory Auditors’ Report Independent Auditors’ Report 9 ANNUAL REPORT 2019 DIRECTORS’ SINGLE REPORT ON OPERATIONS A history made of innovation Over 120 years ago, in his grocery shop in Turin Luigi Lavazza invented and mar- and coffee machines throughout Italy. In 2018, Lavazza acquired the business of keted the concept of blending: the art of combining different coffee varieties and the Australian company The Blue Pod Coffee Co. origins, which even today distinguishes all Lavazza products. In the early decades of the 20th century, Lavazza was the first company to locally 2019 At year-end 2018, following the acquisition of Mars Drinks, the company set up distribute coffee in bags bearing its logo. In 1950, the company used for the first INTEGRATION the Lavazza Professional Business, which includes the Flavia and Klix OCS and CONTENTS time in Italy vacuum tins to preserve coffee and in 1971 the first flexible vacuum OF LAVAZZA Vending systems. In 2019, their integration within the Group was successfully brick pack. In 1989, Lavazza was also the first brand to introduce multiple coffee PROFESSIONAL completed. packs. Company Officers In the same year, it entered the portioned coffee market, becoming the first In 2019, Lavazza was again among the first 50 brands in the world by reputation Italian company to produce and market capsule-based espresso systems. Thanks according to the Global RepTrak 100 by the Reputation Institute, the world’s to ongoing collaborations with an international network of universities and sci- leading reputation-based research advisory firm (49th in 2018, 38th in 2019). Group Structure entific institutes, Lavazza now has different platforms in the portioned coffee segment. Directors’ Single Report on Operations Innovation has always been closely intertwined to research, and the company is known as an organisation with a “continuous innovation cycle”, ranging from the art of blending to vacuum-packed coffee, from portioned to instant coffee, Group’s result for the year from decaffeinated coffee to the ISSpresso machine — developed alongside the LAVAZZA GROUP Italian aerospace engineering firm Argotec (in a public-private partnership with The following table shows the Group’s operating and financial highlights at 31 Consolidated Financial Statements the Italian Space Agency) — capable of functioning in the extreme conditions of December 2019 compared with the previous year: at 31 December 2019 space. This constant passion for quality led the company in 1979 to found the Luigi € million 2019 RATIO % 2018 RATIO % Lavazza Centre for Coffee Studies and Research, dedicated to analysis and Accounting Statements in-depth study of espresso and the spread of espresso culture. This then evolved NET REVENUES 2,199.7 100.00% 1,870.0 100.00% Consolidated Statement of Financial Position into the Lavazza Training Center, an international network of over 50 coffee EBIT 156.0 7.09% 110.7 5.90% schools throughout the world, where 30,000 people are trained each year. EBITDA 290.6 13.21% 197.3 10.60% Consolidated Statement of Profit or Loss Constant innovation is also essential when it comes to the significant industrial ADJUSTED EBITDA 300.7 13.67% 206.5 11.00% Consolidated Statement of Comprehensive investments in recent years that have made the Group more efficient, flexible PROFIT FOR THE YEAR 127.4 5.79% 87.9 4.70% Income and nimble in responding to a constantly evolving market. CAPEX 157 100.7 Consolidated Statement of Cash Flows NET FINANCIAL POSITION (82.1) (15.0) Consolidated Statement of Changes in Equity EQUITY ATTRIBUTABLE TO THE GROUP 2,391.20 2,264.5 A multibrand Group HEADCOUNT 4,022 3,836 Notes to the Consolidated Financial In recent years, the Lavazza Group has embarked on an international devel- Statements opment process aimed at consolidating its independence and competitiveness HIGH-QUALITY at the global level, with the mission of being a premium pure coffee company: COFFEE concentrating solely on high-quality coffee by leveraging the value of its brand. BY LEVERAGING Independent Auditors’ Report Specifically, the company has completed some major transactions: Merrild, a leading retail coffee brand in Denmark and the Baltic countries, joined the THE VALUE Lavazza Group in 2015. In the same year, the Group also took over the distribu- OF ITS BRAND LUIGI LAVAZZA S.p.A. tion business for Lavazza products from its local partner in Australia, thereby establishing a new subsidiary in Melbourne. Financial Statements at 31 December 2019 Since 2016, Carte Noire has been part of the Lavazza Group, which has included Accounting Statements in its industrial system also the production site in Lavérune, located in the Occitanie region. This important transaction allowed Lavazza to take a position Balance Sheet on the strategic French market, which is one of the top five coffee markets in the Statement of Profit or Loss world and now the company’s number-two market for the Group. In addition, as part of its globalisation and premium positioning strategy, in Statement of Cash Flows 2017 the Group completed the acquisition of the Canadian brand Kicking Horse Coffee — a leader in the organic, fair-trade coffee segment in North America — acquiring an 80% stake in the company. Notes to the Financial Statements In 2017, to strengthen its distribution strategy, Lavazza also acquired the shares in Espresso Service Proximité (subsequently merged into Lavazza France), a Statutory Auditors’ Report company specialising in the OCS segment, and an 80% stake in NIMS, an Italian firm specialising in distribution and direct door-to-door sale of coffee capsules Independent Auditors’ Report 10 11 ANNUAL REPORT 2019 DIRECTORS’ SINGLE REPORT ON OPERATIONS GENERAL PERFORMANCE AND MARKET SCENARIO Following the slowdown that began in the second half of 2018 and continued in decrease in borrowing costs and the lower-than-expected costs of the measures CONTENTS 2019, the world economy currently appears to be undergoing gradual stabilisa- implemented by the government. tion. The elimination of significant risks such as the US-China trade war and the At the date of approval of the financial statements, on the basis of the informa- prospect of the United Kingdom’s departure from the EU, along with the mon- tion available, the health emergency caused by the recent spread of the Covid- Company Officers etary easing implemented by the main central banks, contributed to stemming 19 virus, designated a pandemic by the World Health Organization (WHO), has the deterioration of the manufacturing sector at the global level.