Norgesgruppen's Annual and Sustainability Report 2018
Total Page:16
File Type:pdf, Size:1020Kb
NorgesGruppen’s Annual and Sustainability Report 2018 2 1 About NorgesGruppen CONTENTS 2 Message from the CEO: Stronger in every market 28 Green energy and good climate solutions segment 29 Plastic and food waste 4 Market and results: Our customers are shopping more, 30 A diverse Norway – development and also more often 31 Greater diversity, more learning 8 This is NorgesGruppen 32 A thriving Norway – development 10 NorgesGruppen’s value creation 33 Local food kept going, but too hot for Norwegian 12 Market-driving forces vegetables 14 The customer’s first choice: In step with the customer 34 A sustainable value chain – development 16 KIWI is the price leader 35 Global challenges affecting our value chains 17 Better selection, better sales 36 Competitiveness throughout the value chain: Efficient 18 Food destination at Solsiden in Trondheim teamwork 19 Easier. Better. Digital. 38 Improved shelf life and a wider range 20 Sugarfree beverages more popular 39 Joint effort after record-hot summer 22 Sustainable and climate neutral: Susitainable options 40 The Norwegian cheese adventure 24 A healthier Norway – development 41 Our chains and concepts 25 Successful sugar reduction, but also lower fish sales 43 The year in NorgesGruppen 26 An ecofriendly Norway – development 45 Accounts 2018 27 Reduced HFC emissions and more green energy NorgesGruppen’s We make your everyday easier reporting for 2018/2019 k We put customer needs first in every decision we make. We help customers to save time and money, make green and healthy choices, and experience the enjoyment of good food. Stock Exchange Report/Annual Accounts Annual and Sustainability Report 2018 Annual Accounts 2018 2018 Norwegian and English editions Full accounts with notes, Annual Report Second half-year and presentation of the Board of Directors www.norgesgruppen.no for updated information about significant activities at NorgesGruppen. NorgesGruppen’s Annual and Sustainability Report 2018 1 Message from the CEO Message from the CEO “Our store teams make tomorrow’s Stronger in every shopping cheaper and better. We wish to give inspiration for good culinary TheThe customerscustomer s Competitiveness first choice throughout the value chain market segment experiences, and offer our customers green and healthy choices from our efficient value chain.” Sustainable and NorgesGruppen has positioned itself more prominently among discount climate-neutral stores, supermarkets and local stores throughout Norway. Trends are also positive for online retailing and food-on-the-go. K Times are turbulent and competition ing stores. Our establishment rate will be mentally-friendly solutions, new technology, fierce in the grocery sector. After emerging increased in the future, with stores that are and strong chain concepts and expertise. from a prolonged period of sound growth aligned to their local customer base. Soon, our new coffee processing facility will up to 2015, the sector’s growth has slowed be ready. This will further boost our competi- down in recent years. One reason is that Deli de Luca, MIX and Jafs in the retail con- tiveness in terms of efficiency, packaging and several new operators are offering grocery venience market also made good headway the environment. We are the first in our sec- products. We must therefore always be ready during the past year. Several retail outlets tor in the Nordic region to offer green bond to fight to be the customer’s first choice. were upgraded, with new offers for their loans that will be used exclusively to finance customers. The current trend is for diners investments in environmentally-friendly Our grocery, catering and retail convenience to replace the newsagent concept. Food-on- transport and buildings, and renewable customers no longer rate us solely by price the-go continues to expand, and by more energy. For the first time, ASKO’s production and selection. They also consider our impact than the grocery market in 2018. of renewable energy almost covers its total on society. For our youngest customers, the electricity consumption. environment and climate change are the most important issues (Young 2016, Adult NorgesGruppen offers consumers a variety of 2025). In recent years, both our customers options through supermarkets, district stores and our employees have become increas- and discount stores. Our supermarkets have ingly engaged in the environmental chal- the best selection of food and beverages. lenges we face. This imposes obligations on During the year, KIWI, our discount chain, both us and our business partners. We must consolidated its price-leading position in the be sustainability pioneers, as demonstrated sector. Our retailers in the various districts by our elimination of many tonnes of super- of Norway offer know-how and service close fluous plastic in 2018. to customer’s homes, thereby contributing to vibrant district communities. Our retailers Existing stores account for 80 per cent of have a good appetite for investment, allow- the total growth in our grocery segment in ing us to continue to contribute to employ- 2018. KIWI and Joker have gained more In the catering market, NorgesGruppen and ment and new settlement all over Norway. customers, with larger shopping baskets; and ASKO were in close dialogue with their cus- We can also contribute further to community at MENY and SPAR, customers buy more at tomers throughout the year, presenting and integration, to reducing climate impacts and every visit. This is due to a combination of receiving feedback on new products. ASKO to preventing illness by advocating a healthy better and more sales-optimised stores that was also nominated supplier of the year by diet. meet customers’ needs and requirements, one of its largest customers, Hurtigruten. “We have sales-optimised stores that can fulfil and the fantastic efforts of all of our staff The efforts of everyone in the Norges- teams, every day, in the face of tough com- As our sales increase, we can operate more Gruppen family are making a difference. We customers’ needs and requirements, and petition. It is pleasing to note that KIWI and efficiently. We have never had better and must further develop our winner culture, service-minded staff teams who are ready to take MENY continued to head several reputation more efficiently-run stores than in 2018. with many actions every day to create bet- on the tough competition, every day.” and brand surveys in 2018. This proves that Improving the distribution of refrigerated ter experiences for customers. customers find shopping at our store chains products has increased shelf lives by up to Runar Hollevik together with fresh produce manager Ane Eriksen Lierhagen, MENY Skøyen to be a good experience. one day, for the benefit of our customers. In 2018, our competitors established more Our ability to develop the company over stores than we did. Instead, we concentrated time, with long-term owners, has laid the Runar Hollevik on improving and developing our exist- foundation for investing in more environ- Group CEO, NorgesGruppen 2 NorgesGruppen’s Annual and Sustainability Report 2018 NorgesGruppen’s Annual and Sustainability Report 2018 3 Market and results Market and results Our customers are shopping Unit 2018 2017 2016 Finance more often Operating revenue MNOK 87,813 85,632 80,162 Simplified cash flow (EBITDA) MNOK 4,992 5,238 4,846 Operating margin (EBITDA) % 5.7 6.1 6 Operating profit (EBIT) MNOK 3,140 3,052 3,266 In 2018, the grocery market saw low growth, many price campaigns, Operating margin (EBIT) % 3.6 3.6 4.1 more discount stores and a strong focus on food waste and plastic Profit before tax MNOK 3,057 2,778 3,164 reduction. Profit margin % 3.5 3.2 3.9 Cash flow, investment activities MNOK -3,638 -2,507 -2,699 Equity ratio % 50.7 48.1 46 Sound growth in a tough market survey by NIBIO (Norwegian Institute of improved our contingency planning and Business In 2018, NorgesGruppen achieved growth Bioeconomy Research) which shows that food safety reporting tools and followed Saved Trumf bonus MNOK 1,081 1,005 568 of 3.3 per cent, while the traditional grocery the retail grocery sector has seen high pro- up on suppliers, to make sure that they Number of Trumf members Number 2,213,086 2,058,036 1,835,740 market increased by 2.8 per cent (Nielsen). ductivity growth, compared to other sectors have adequate systems to safeguard labour Growth in number of Trumf members Number 155,050 222,296 200,363 This means that NorgesGruppen won market ( Pettersen, NIBIO). rights, food safety, the environment and Growth in number of transactions per store day % 0.9 1.0 1.4 shares. Our customers shopped more, and animal welfare. Our focus on sustainability Transactions per day Number 1,209,112 1,203,575 1,187,588 more often, in our stores. Sales growth, in combination with compet- is sincere and long-term because we believe Market growth (Nielsen) % 2.8 1.1 3.1 itive distribution, store operation and pro- that this benefits us, our customers and Growth, NorgesGruppen % 3.3 3.3 5.8 Food prices in Norway increased moderately curement, will be important success factors society as a whole. Organic growth, NorgesGruppen % 2.6 1.3 3.7 compared to the consumer price index (CPI) in the market. Grocery stores are continu- in 2018. The increase in food prices in 2018, ously engaged in adjusting to customers’ A changing framework Sustainability adjusted for tax changes, was 1.3 per cent. needs and optimising the stores. Consumers’ The Norwegian government’s White Paper Share of renewable fuels % 34 34 29 By comparison, CPI in total, adjusted for tax increasing use of digital services is strength- on the retail industry was presented in Reduction of food waste from 2015 % -21 -19 – changes, increased by 2.5 per cent (SSB).