Kerevitaş Annual Report 2019 Contents
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Kerevitaş Annual Report 2019 Contents KEREVİTAŞ AT A GLANCE 08 Operational Network 10 Highlights 12 Vision, Mission and Values 14 Our Business 16 Production Capacity 20 Key Indicators 23 Net Sales Breakdown by Product Category 24 Net Sales Breakdown by Sales Channels 26 Capital and Shareholding Structure 28 Success Story 31 Awards and Achievements MANAGEMENT 32 Message from the Chairman of the Board and CEO 34 Board of Directors 35 Senior Management 2019 ACTIVITIES 36 Development of Frozen and Canned Food Sector and Edible Oil Sector in Turkey 40 Frozen and Canned Food Business Unit 40 Activities 40 Production 40 Sales and Marketing 41 Distribution 41 Export 41 Products 41 Retail 41 HORECA 41 Export 42 Edible Oil Business Unit 42 Activities 42 Production 42 Sales and Marketing 44 Distribution 45 Export 45 Products 45 Consumer Products 45 HORECA Products 45 Pastry and Catering Oils 45 Industrial Products 46 Investor Relations SUSTAINABILITY 47 R&D Activities and Investments 48 Human Resources 52 Occupational Health and Safety 53 Environmental Practices 54 Good Agricultural Practices 55 Corporate Social Responsibility CORPORATE GOVERNANCE 56 Corporate Governance Principles Compliance Report for 2019 64 Risk Management Policies 65 Profit Distribution Proposal 66 Other Issues FINANCIAL STATEMENTS AND FOOTNOTES 67 Consolidated Financial Statements as of December 31, 2019 and Independent Auditor’s Report As the second largest Yıldız Holding- owned food company trading on the Borsa Istanbul, Kerevitaş has preserved its strong market leadership in both frozen food and margarine. While our astute channel-category strategies brought along growing sales revenues, we continued to stand close to our consumers and customers to address their changing needs with high quality products. Support for development We undertake a major role for sustainable development towards a better future. We collaborate with farmers for the cultivation of crops across 53,174 hectares of contracted farmland, contributing to employment. Significant results in water saving We support enhanced productivity in agricultural production and mitigation of the environmental impacts of cultivation. We have saved 5.4 million m3 of water through drip irrigation in agricultural land. Environmentally friendly production Our edible oil business, Besler, embarked on the “Zero-loss Journey through the Corporate Energy Movement,” helping us prevent carbon emissions equivalent to the absorption capacity of 260 thousand grown trees in a year. 8 Kerevitaş at a Glance Operational Network Exports to over 60 countries on 6 continents EXPORT DESTINATIONS Africa: Algeria, Cameroon, Egypt, Ethiopia, Gabon, Ghana, Ivory Coast, Kenya, Libya, Madagascar, Mauritius, Mauritania, Nigeria, Sudan, Tanzania, Tunisia Asia: Afghanistan, Azerbaijan, Bangladesh, Brunei, China, Georgia, Hong Kong, India, Iran, Iraq, Israel, Jordan, Kazakhstan, Kuwait, Lebanon, Oman, Pakistan, Palestine, Philippines, Qatar, Saudi Arabia, Syria, Taiwan, Tajikistan, Turkmenistan, United Arab Emirates, Uzbekistan Europe: Germany, Albania, Austria, Belgium, Bosnia- Herzegovina, Bulgaria, Cyprus, Denmark, France, Greece, Hungary, Italy, Kosovo, Macedonia, Malta, Netherlands, Romania, Spain, Sweden, United Kingdom South America: Brazil, Colombia North America: Canada, United States of America Oceania: Australia KEREVİTAŞ Annual Report 2019 9 FROZEN AND CANNED FOOD BUSINESS UNIT EDIBLE OIL BUSINESS Product Categories Product Categories • Bakery Products: Pizza, Pastry (Börek), Puff • Retail - Margarine Pastry, Turkish Ravioli (Mantı), Flatbread (Pide), • HORECA Turkish Pizza (Lahmacun) - Pastry and Catering • Fruits and Vegetables - Industrial Oils • Meat Products: Meatballs, Burgers, Chicken • Edible Oil Products • Potatoes and Croquettes Brands • Canned Products: Tuna Fish, Sweet Corn, Bizim Yağ, Teremyağ, Luna, Sabah, Yayla, Vegetables Halk, Ona, Evet, Ustam, Akbis, Akao, • Desserts: Knafeh, Pistachio Pastry, Mosaic Cake Akrim, Arma, Mars, SPY • Seafood Products: Calamari, Shrimps Brand • SuperFresh 10 Kerevitaş at a Glance Highlights Kerevitaş achieved successful operational results in 2019. Steady and Profitable Growth NET SALES (TL MILLION) GROSS PROFIT (TL MILLION) Gross Profit Margin 2,406.2 2,422.0 2,492.9 613.4 562.9 413.7 24.6% 23.2% 17.2% 2017 2018 2019 2017 2018 2019 EBITDA(*) (TL MILLION) EBITDA Margin 379.3 343.6 185.5 14.2% 15.2% 7.7% 2017 2018 2019 (*) Excluding other income and expenses from operating activities. KEREVİTAŞ Annual Report 2019 11 Exporting to more than 60 countries across 6 continents with over 1,730 employees, Kerevitaş consistently boosts its strength in domestic and export markets. Leader of the Frozen Food and Margarine Market Total Workforce Total Export 1,736 353.1 Employees TL Million As the leading company in Turkey’s frozen food market, Kerevitaş maintains its steady growth, redoubling its energy Export Destinations Number of Factories through the cost savings and operational efficiencies and synergy generated by the >60 5 acquisition of Besler. Exporting to more than 60 countries across 6 continents with over 1,730 employees, Kerevitaş continues to introduce innovations that deepen its market penetration and reinforce its leading status, thus consistently boosting its strength in both domestic and export markets. 12 Kerevitaş at a Glance Vision, Mission and Values Vision To be a reliable leader of food industry aiming to make all its stakeholders happy. Mission To provide the most delicious, practical and innovative products in a healthy and reliable value chain as the number one solution partner in the kitchen. KEREVİTAŞ Annual Report 2019 13 Values Consumer satisfaction Leadership in quality Innovation • We always prioritize consumer • We provide consumers easily • We explore, support and needs and requests. and produce accessible high-quality products implement new ideas with our accordingly. and strong brands with best-in- entrepreneurial spirit, embracing • We always work passionately to class services. change and innovation. become the market leader and a • We aim to implement the best • We identify fresh opportunities preferred brand. practices in every aspect of our in the market and boost our • We consider consumer benefit operations. mobility by rapidly adapting to prior to each action we take. • We continually raise the quality change. • We take the initiative to achieve bar in production and at service • We pioneer change, create new consumer satisfaction and aim stages. markets and set the trends in the to anticipate needs before they industry. arise. • We embrace new and diverse opinions. • We monitor innovations and developments closely and aim for continuous improvement with our R&D centers’ studies. Leadership in collaboration Competitiveness Result-oriented • We value different perspectives • We always start compelling • We are always result-oriented and experiences, and benefit competition across all our and preserve our energy and from our wealth of diversity. operations. motivation. • We consult each other, learn • We aim to reach the top in every • We aim to achieve sustainable together and develop our skills. area where we operate. results that generate value for all We work together as a team • We are swift and agile; we work stakeholders. towards a common goal. hard and push the limits to • We put our hearts in our work • We welcome everyone’s success provide our customers the best with our industriousness and as the Company’s success. products first. drive to succeed, set challenging • We measure our performance targets and then achieve them. against our own record and our competitors, and then aim to do better each time. 14 Kerevitaş at a Glance Our Business Kerevitaş offers all-time delicious alternatives to consumers through quick and practical products. Frozen and Canned Food Kerevitaş has the widest product range In 2019, SuperFresh launched Şipşak Production is carried out in four in the frozen food market. The frozen Pizza (Instant Pizza), the first and only main categories: food category offers consumers bakery microwave pizza in Turkey. The product • Retail Products products, fruits and vegetables, potatoes serves the modern consumer with a • HORECA Products and croquettes, meat products, seafood quick, practical and delicious offering in • Export Products products and desserts. Canned food one-person portions. • Private Label Products category includes canned tuna fish, sweet corn and vegetables. Product Categories • Bakery Products - Pizza - Roll Pastry - Puff Pastry - Turkish Ravioli (Mantı) - Flatbread (Pide) - Turkish pizza (Lahmacun) • Fruits and Vegetables • Meat Products - Meatballs - Burgers - Chicken Products • Potatoes and Croquettes • Seafood Products - Calamari - Shrimps • Canned Products - Tuna Fish - Sweet Corn - Vegetables • Desserts - Knafeh - Pistachio Pastry - Mosaic Bars KEREVİTAŞ Annual Report 2019 15 The Edible Oil Business of Kerevitaş involves production and sales of 518 SKUs under 56 brands including Bizim Yağ, Teremyağ, Luna, Ona, Ustam and Evet. Edible Oil Following the acquisition of Besler, the market leader in Turkey’s edible oil production, operations of Kerevitaş under the Edible Oil Business involve the production and sales of 518 SKUs under 56 brands in total, including Bizim Yağ, Teremyağ, Luna, Ona, Ustam and Evet. Edible Oil Products • Consumer Products - Bizim Yağ - Teremyağ - Luna - Sabah - Yayla - Halk - Ona - Evet HORECA Products • Pastry and Catering Oils - Ustam - Proser - Teremyağ - Bizim Yağ • Industrial