“Paulig’s growth strategy aims for international growth, which is sought especially from the Tex Mex and plant-based protein categories. The new operating model we implemented in 2019, our ambitious sustainability targets and a product selection that responds to the long-term demand and trends in the food industry are the cornerstones of our future success,” says Rolf Ladau, CEO of Paulig Group.
Deployed in June 2019, Paulig’s new operating model aims to ensure that the Group operates close to its customers and consumers. The previous structure based on business divisions was replaced by a new model built around geographic Business Areas and Business Functions. The Business Areas are Finland and Baltics, Scandinavia and Central Europe, and East including Russia and surrounding countries. The fourth business, Customer Brands, focuses on private labels.
“The new centralised Marketing and Supply Chain & Sourcing functions are intended to make Paulig’s brand portfolio even more international, expand cooperation with customers, improve productivity and ensure that the best competencies are effectively utilised throughout the Group,” Rolf Ladau explains.
“In 2019, we also defined Paulig’s new brand promise in the form of a purpose statement: For a life full of flavour. For me, this means that our brands are part of the smaller and bigger everyday moments, adding value and helping turn the ordinary into extraordinary in the lives of our consumers. We want to create permanent positive imprints that help drive brand love,” adds Rolf Ladau.
Growth through interesting new products
The family-owned Paulig has over 140 years of successful history behind it and today, the company employs approximately 2,000 people in 13 countries. Paulig’s portfolio includes a number of well-known brands such as Paulig, Santa Maria, Poco Loco, Risenta and Gold&Green. Paulig’s products are sold in more than 70 countries. Some 54 per cent of the Group’s revenue came from the Nordic countries and the remaining 46 per cent from other markets.
“Tex Mex is our most important growth category and Paulig is the leading company in Europe in that segment. The Tex Mex category grew by 6 per cent on average last year. Another big category for us is coffee, in which we managed to maintain our market position in spite of intensifying competition and increase our sales of premium coffee by 10 per cent. We also launched our Gold&Green Pulled Oats plant-based protein products in new international markets with excellent growth potential,” Rolf Ladau points out.
Paulig introduced a number of interesting new products in 2019, including Paulig Cold Brew Sparkling drinks, the Paulig City Coffee cold drinks product family and Paulig Café Moscow. The company’s largest coffee brand, Juhla Mokka, celebrated its 90-year journey with an emotional campaign in Finland.
In the Santa Maria brand, the company was successful in pursuing growth in the Tex Mex category. Growth was promoted by the new, more sustainable tortilla packaging whose climate footprint is 35 per cent smaller than its predecessor’s. The packaging of Santa Maria coconut milk was also redesigned. Aluminium was replaced by cardboard, which significantly reduces the greenhouse gas emissions of the packaging. The Tex Mex category continued to grow in the private label business as well.
Paulig invests in growing the plant-based product category, and Gold&Green Pulled Oats has tremendous growth potential in that segment. Pulled Oats was launched successfully in the Netherlands in 2019. The Risenta brand was refreshed in 2019 and the renewal of the brand will become visible to consumers in 2020. The brand is also expected to point the way to future growth as part of the growing trend of healthy and environmentally sustainable plant-based food.
2019 in numbers
The consolidated financial statements for 2019 are the first financial statements prepared by Paulig Group in accordance with the International Financial Reporting Standards (IFRS). Until the 2018 financial year, the Group prepared its financial statements in accordance with the Finnish Accounting Standards (FAS).
- Revenue totalled EUR 921.4 million (908.2)
- Operating profit was EUR 75.4 million (73.9), or 8.2 per cent (8.1) of revenue
- Profit for the financial year was EUR 51.6 million (54.3)
- The Group’s equity ratio was 64 per cent (64.4)
- The average number of personnel was 2,115 (2,140)
Development of revenue
In 2019, Paulig Group’s revenue was EUR 921.4 million, representing an increase of 1.4 per cent on the previous year. The distribution of revenue between the newly established Business Areas was as follows:
- Finland and Baltics EUR 301.7 million (310.6)
- Scandinavia and Central Europe EUR 276.6 million (283.3)
- Customer Brands EUR 267.4 million (251.3)
- East including Russia and surrounding countries EUR 62.6 million (53.1)
Result for the financial year
The Group’s operating profit was EUR 75.4 million (73.9), and the ratio of operating profit to revenue was 8.2 per cent (8.1). The consolidated result for the financial year, EUR 51.6 million (54.3), included EUR 15.1 million in profit from real estate sales associated with the sale of land areas in Vuosaari where the old roastery was located.
Depreciation and impairment totalled EUR 61.8 million (43.5), with the amortisation of goodwill representing EUR 5.6 million and the impairment of fixed assets EUR 11.2 million of the total. In addition to impairment, the Group’s result was negatively affected by non-recurring items related to changes in the Group’s operating model. The associated company (Fuchs Group) had an effect of EUR -1.7 million on the Group’s result.
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