2019 ANNUAL REPORT OF THE COOP GROUP Publishing details Any statements in this report that do not refer to historical facts relate to the future and do not constitute guarantees of future products and services. They incorporate risks and uncertainties including, but not limited to, future global economic conditions, exchange rates, statutory regulations, market conditions, competitors’ activities and other factors beyond the company’s control. This report is published in German, French, Italian and English. The German version is authoritative. An online version can be downloaded from www.coop.ch/report Published by: Coop Cooperative, CH-4002 Basel Editing/Coordination: Coop PR Editorial Team Implementation: Coop PR Editorial Team/gateB AG, Steinhausen/Zug Publication date: March 2020 Information/contact Coop Info Service Postfach 2550 CH-4002 Basel Tel. 0848 888 444 www.coop.ch 2019 Annual Report of the Coop Group Coop Group business areas 4 Key figures at a glance 5 Foreword 6 Milestones in 2019 8 Strategy and operating environment 10 Profile of the Coop Group 10 Strategies and objectives 10 Economic and political environment 12 To the top with sustainability 13 Overarching topics in the area of sustainability 15 Retail business area 17 Sales formats and range 18 Logistics, IT and property 30 Additional services 32 Wholesale/Production business area 36 Transgourmet Group 37 Production 45 Employees 50 Attractiveness as an employer 51 Training and staff development 52 Corporate governance 55 Coop Group in figures 73 Coop Group business areas 4 Coop Group Annual Report 2019 Coop Group business areas As at 1 March 2020 COOP GROUP RETAIL WHOLESALE / PRODUCTION Coop Supermarket Transgourmet Group Coop City Transgourmet Central and Eastern Europe Coop Building & Hobby Transgourmet France Coop@home Transgourmet Österreich Coop Restaurant Transgourmet Switzerland Coop Mineraloel Coop Vitality pharmacies Bell Food Group AG ITS Coop Travel Bell Interdiscount Eisberg Microspot.ch Hilcona Dipl. Ing. Fust Hügli Nettoshop.ch/Schubiger/Service 7000 Livique/Lumimart Coop manufacturing companies Import Parfumerie Chocolats Halba/Sunray Christ Watches & Jewellery Steinfels Swiss Marché Restaurants Schweiz Swissmill Betty Bossi Reismühle Brunnen/Nutrex The Body Shop Switzerland Pearlwater Mineralquellen BâleHotels Coop Bakeries Update Fitness Cave Tropenhaus Frutigen Banana Ripening Plant Coop Immobilien Railcare Others RETAIL WHOLESALE PRODUCTION FÜR BESSERESSER. Watches & Jewelry KeyCoop figures Group inat figuresa glance Key figures 745 Coop Group Annual Report 2019 Key figures figures at a glance Key figures at a glance Total sales Earnings 30 669 CHF million 2 046 CHF million EBITDA 6.9% of net sales Net sales Group 782 CHF million EBIT 2.6% of net sales 29 633 CHF million of which Profit 20 159 CHF million Switzerland 531 CHF million 9 474 CHF million abroad 1.8% of net sales Net sales segments Equity 17 986 CHF million Retail 10 265 CHF million 50.2% Equity ratio 14 148 CHF million Wholesale/Production Net sales online trading Cash flow from operating activities 913 CHF million Retail 1 877 CHF million 1 691 CHF million Wholesale/ Production Employees at 31.12 Investments in tangible fixed assets 47 455 Retail 888 CHF million Switzerland 42 852 Wholesale/Production 360 CHF million abroad Trainees at 31.12 Sales outlets/markets 2 459 Retail 2 333 Retail 996 Wholesale/Production 145 Wholesale/Production Net sales Operating result (EBIT) in CHF billion in CHF million as a % of net sales 29.6 29.6 28.2 30 27.3 900 806 9.0 25.9 763 772 782 716 25 750 7.5 20 600 6.0 15 450 4.5 2.8 2.8 2.9 2.6 2.6 10 300 3.0 5 150 1.5 0 2015 2016 2017 2018 2019 0 2015 2016 2017 2018 2019 0 Foreword 6 Coop Group Annual Report 2019 Hansueli Loosli and Joos Sutter Foreword Coop still on track for success Despite the difficult environment, Coop can look back on a successful financial year in 2019, in which it generated sales of 30.7 billion francs. Profit amounted to 531 million francs. In Retail, Coop increased its net sales by 1.4%, to 18 billion francs. With more than 90 000 employees, 2 333 sales outlets, and 42 shopping centres, Coop offers its customers a shopping experience tailored to their needs. In 2019, for instance, the remodel of Volkiland in Volketswil and the new Coop Löwenberg in Murten created modern shopping centres which bring togeth- er various sales formats, such as Coop Building & Hobby, CoopCity, as well as Interdiscount, Import Parfumerie and others. In the supermarket seg- ment, more than 110 sales outlets already boast the 2025+ store design. The 2.5% increase in footfall is just one indicator of customers’ apprecia- tion for the high quality of the ranges, with a wide selection of sustainable products, and the diversity on offer in Coop supermarkets. In the specialist formats, net sales grew to 7.5 billion francs for the whole Group. The Coop City department stores continued to gain market shares. The home electronics segment, with the Interdiscount (+3.4%) and Fust (+2.6%) formats, reported positive growth. Coop Vitality also continued to perform well, with growth of 5.8%. Update Fitness performed particularly well, with growth of 21.8%. With 48 studios, the company is now one of the leading fitness providers in Switzerland. Livique/Lumimart lifted its net sales by 2% to over 200 million francs. With net sales of close to 2.5 billion francs, Coop Mineraloel AG retains the top spot in trade in fuel and in con- Foreword 7 Coop Group Annual Report 2019 venience sales in Switzerland. The 314 related Pronto shops, with their customer -friendly opening hours and big choice of fresh and convenience products, grew by 1.9% last year. In the online business, Coop continued to make great headway, generating a total of 2.6 billion francs in this channel. The online shops in the home electronics segment were heavily instrumental in this, with growth of 17.5%, to over 600 million francs. One particular milestone was the remod- el of Microspot.ch from a home and consumer electronics supplier to a comprehensive online Swiss non-food online shopping centre with a marketplace function. Online supermarket Coop@home posted growth of 5.4% and thus gained market shares. Net sales of the Wholesale business area – the Transgourmet Group – to- talled 9.7 billion francs, which equates to growth in local currency of 3.7%. Transgourmet thus strengthened its position in the European cash & carry and wholesale supplies business, and grew in all countries. Last year, Transgourmet’s primary focus was the expansion of the fresh produce range and the standardization of IT systems across all countries, enabling customized digital services for its customers. Moreover, Transgourmet broadened its dairy expertise in Switzerland with the acquisition of Emmi Frisch-Service AG. In Austria, the company acquired Gastro Profi GmbH and, with it, comprehensive expertise in the rapidly expanding ethic cater- ing segment. In Germany, Sanalogic, one of the leading companies for IT- based catering management in the care sector, is now a wholly-owned subsidiary of Transgourmet. Net sales of the manufacturing companies grew by 0.5% in local currency, totalling 4.8 billion francs. For the Bell Food Group, the financial year saw big rises in raw material prices for pork in Europe, the organizational restructuring of Bell Germany, the commissioning of Europe’s most modern convenience factory in Marchtrenk in Austria, and a good business perfor- mance in Switzerland in the second half of the year. The Coop Group’s sales of sustainable products grew by 40 million francs in 2019, to over 4.7 billion francs. Sales of organic products also continued to develop well, with growth of 8.4%. As a result, Coop remains the undis- puted number one in this segment. Moreover, with the 2019 “Day of good deeds”, Coop took another important step in its long-standing commit- ment to society and nature. Hundreds of thousands of volunteers got involved in the day of action, showing their solidarity with their fellow humans and the environment. The numerous actions delighted people of all ages, and created a positive movement in all parts of Switzerland. The Coop Group is in great shape for the future. It enjoys a very solid financial foundation. And in all business segments it has highly dedicated employees who work tirelessly each day to meet customers’ needs. We are sincerely grateful to them all. Hansueli Loosli Joos Sutter Chairman of the Board of Directors Chairman of the Executive Committee Milestones in 2019 8 Coop Group Annual Report 2019 Milestones in 2019 January February Coop opens Fooby store in Lausanne Coop opens the first Fooby store in the former Transgourmet takes over Gastro Profi GmbH Transgourmet takes over Kursaal Théâtre on Place Bel-Air in Lausanne. Transgourmet Österreich takes over Gastro Emmi Frisch-Service AG The store is dedicated to craftsmanship, re- Profi GmbH, thus expanding its ethnic catering Transgourmet takes over Emmi Frisch-Service gional products and sustainability. range. The company, which specializes in AG, along with all of its employees. The com- wholesale catering, retains its autonomy. All pany supplies around 600 companies in the 2× 100 000 francs donated to SRC for jobs are retained. food service, hospital and care home, conveni- emergency aid ence store and wholesaler segments. Following Tropical Cyclone Idai, Coop donates 100 000 francs to the Swiss Red Cross (SRC) March for emergency aid in Malawi. In November, another donation is made to an SRC rescue Doris Leuthard joins Coop’s Board of organization after the devastating earthquake Directors in Albania. On 28 March 2019, Coop’s Delegate Assem- bly elects former Federal Councillor Doris Leuthard to Coop’s Board of Directors.