Annual Report 20 20 We brighten up our customers’ day. Wherever people are on the move. TABLE OF CONTENTS 3 Letter to shareholders 4 COVID-19 pandemic 6 Vision 8 Foodvenience & market environment 10 Trends 12 Strategy & operational financial targets 18 Brand portfolio 32 Digital 34 Production 36 Key financial data 40 Interview CEO 45 Corporate structure 47 Sustainability Report 75 Corporate Governance Report 97 Remuneration Report 129 Financial Report 132 Review of Group results 142 Consolidated financial statements 208 Financial statements of Valora Holding AG 220 Information for investors 230 Addresses ANNUAL REPORT VALORA 2020 3 Letter to shareholders Dear shareholders The global COVID-19 pandemic and the ple, with the new online store avec now, the second half of 2021. By the end of the official restrictions imposed also had a which delivers within the hour, as well year, we expect to return to a monthly massive impact on Valora, resulting in a as the new avec 24/7 store, which in ad- profitability comparable to the time be- marked decline in customer frequencies dition to its normal opening hours also fore the COVID-19 crisis. and lower demand, especially for food to operates autonomously on Sundays, with Unfortunately, the 2021 Annual go. Nevertheless, Valora managed to this soon also to be the case during the General Meeting will once again have to achieve positive EBIT of CHF 14.1 mil- night, just like the avec box. take place without shareholders in lion in 2020, which was at the upper end The fact that we are able to look to attendance. As was the case last year, of the guidance. This was in spite of ex- the future with confidence despite the you will have the opportunity to exerci- ternal sales falling by – 16.7 % year on crisis is especially thanks to the people se your vote via the independent proxy. year due to the drastic COVID-19 mea- in our network. Our employees showed In view of the still high level of uncer- sures in the spring and the renewed im- immense commitment in contributing tainty and in order to protect Valora’s position of more stringent measures to ensuring the provision of basic sup- strategic freedom of action, the Board of from late autumn. On the positive side, plies to the public and further develop- Directors proposes to the Annual Gene- there was a good start to the year, sus- ing the company. Our staff also dis- ral Meeting that the 2020 dividend be tainable cost management and an in- played great solidarity in undertaking waived. We are convinced that the pru- terim recovery in sales prompted by the short-time working, which affected more dent approach to the company’s finan- official easing measures in the summer. than half the workforce at times. We cial resources is not only in the interest We also achieved strong free cash would like to say a wholehearted thank of the company, but of all its stakehol- flow of CHF 38.1 million on the back of you to all our employees for their valu- ders. solid EBITDA of CHF 83.4 million, the able commitment during this turbulent We greatly value being able to count consistent management of net working time. on your active support during this cri- capital and focused investment deci- In return, Valora stepped up to sup- sis. We are convinced that thanks to your sions. In addition, we reduced the port its employees’ and partners’ health contribution, to all the extra measures Group’s net debt (31.12.2020: CHF 211.8 and financial security. Moreover, the taken and, above all, the commitment million), further strengthening the bal- Board of Directors took the decision to shown by our employees we will be able ance sheet in the process. show its appreciation by giving all em- to overcome the crisis successfully and We owe you, dear shareholders, a ployees who are part of the “short-term build on our achievements. We would like great deal of gratitude for this. You con- bonus” plan half of their bonus for the to express our great gratitude for this. tributed a good CHF 100 million to the 2020 financial year despite not achieving strong balance sheet during a time of the financial targets. Best wishes major uncertainty and helped to create The Board of Directors would like to a solid basis for future investments. This thank the Group Executive Management contribution was made possible by the and the wider management team for their waiving of the dividend in 2020 as well strong crisis management and the ma- as the successful capital increase in No- nagement foresight they demonstrated. vember. This also helped us improve our Since 1 July 2020, the Group Executive extra COVID-19 headroom for the lever- Management has been strengthened by age ratio covenant of our syndicated loan the addition of Beat Fellmann as new Franz Julen facility, which we extended to the end of CFO. In June, Markus Bernhard, Dr Ka- Chairman of the Board of Directors June 2022. rin Schwab and Dr Suzanne Thoma also The crisis did not prevent us from joined the Valora Board of Directors. also investing in the future in 2020. The We are convinced that the foodve- expansion of our pretzel production ca- nenience business will remain attrac- pacties was completed according to plan. tive and recover with the easing of the The conversion of the spaces secured in official restrictions. We are thus stay- the SBB tender into avec convenience ing true to our strategy. Nevertheless, stores and k kiosk sales outlets with an we are currently experiencing the second increased food offering is progressing wave of the virus and have yet to come well following a brief COVID-19-induced through this. The start of the current Michael Mueller break. We are also moving forward with business year was difficult and the si- CEO our development of digital convenience tuation remains challenging. However, solutions. This can be seen, for exam- business should recover significantly in ANNUAL REPORT VALORA 2020 4 COVID-19 pandemic The global coronavirus pandemic de- a considerable impact on the Valora fined 2020. From February, the corona- Group’s external sales, especially in the virus (COVID-19) spread everywhere food category. including throughout Europe and North Nevertheless, the foodvenience America – directly impacting the core provider managed, even under the most Valora markets of Switzerland and Ger- stringent restrictions, to help provide the many, plus Austria, Luxembourg, the public with basic supplies and it experi- Netherlands and the USA. The authori- enced a recovery in sales during the in- ties responded with rigorous measures terim phase from spring to the second to contain the virus. wave starting in late autumn. Combined These restrictions and the resulting with a good start to the year in January fall in customer frequency obliged and February, with strict cost and pru- Valora to reduce opening times signif- dent crisis management and with very icantly and even close some sales outlets committed employees this led to Valora entirely. The lower customer footfall also closing the year with positive EBIT of led to a marked decrease in out-of-home CHF 14.1 million. consumption. These developments had Mobility at transport hubs in 2020 (in Switzerland by way of example) 20 % Official measures (some examples): 10 % (1) Tightened restrictions with school closures, a recommendation to avoid 0 % public transport and to work from home (13 March) and the closure of borders, shops, restaurants and leisure facilities – 10 % (16 March) (2) Opening of schools, shops and catering – 20 % establishments (11 May) (3) Opening of borders (15 June) and significant easing of measures (22 June) – 30 % (4) Masks obligatory on public transport (6 July) (5) Tightened restrictions with extended – 40 % obligatory mask-wearing and a recommendation to work from home – 50 % (19 October) (6) Obligatory shop closing from 7:00 p.m. and closure on Sundays and public – 60 % holidays (11 December) as well as closure of restaurants and leisure – 70 % facilities (22 December) 1 2 3 4 5 6 Sources: Google and the Federal Office – 80 % of Public Health, 2020 Feb Mar Apr May June July Aug Sept Oct Nov Dec Note: Baseline = Median of 5-week period (Jan 3 – Feb 6, 2020) ANNUAL REPORT VALORA 2020 5 COVID-19 pandemic Valora Group opening times due to official COVID-19 restrictions Retail (2 041 sales outlets in Dec. 2020) 100 % 80 % 60 % 40 % normal operations 2 0 % closed 0 % reduced opening hours Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Food Service (639 sales outlets in Dec. 2020) 100 % 80 % 60 % 40 % normal operations 2 0 % closed 0 % reduced opening hours Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec External sales in the Valora divisions: Deviation 2020 vs. 2019 (in local currency) 20 % 0 % – 20 % – 40 % – 60 % – 80 % Food Service – 100 % Retail Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec VISION 6 We offer the best food and convenience concepts based on an in-depth understand- ing of customers and formats, operational excellence, ongoing innovation and agility as well as optimal value creation. 7 8 Food- venience* Convenience as the shop- ping experience and as a product range combined with an ever growing fresh food selection – that is foodvenience at Valora. [* = Food + Convenience] 9 Market environment Developments in recent years show From March 2020, however, the that consumers were increasingly COVID-19 pandemic started to impact demanding foodvenience until the the foodvenience business significant- COVID-19 crisis. The convenience ly.