Following the sale of the Naville building in February, we have fully completed our transformation process during 2017 and, with the acquisitions of BackWerk and Pretzel Baron, concentrated on strengthening our positioning as a focused food and convenience provider. At the same time, we have announced a further important step with the planned investments in the expansion of our production capacities, which will allow us to continue with our growth strategy. We also generated a good financial result and in doing so confirmed the communicated expectations.
The acquisition of BackWerk made Valora one of the leading vertically integrated food service providers in Germany. In addition to our already strong presence at transport hubs, we are now also considerably better represented in city centres with BackWerk. At the same time, the established franchise business has allowed us to enter the Dutch and to expand in the Austrian market. In the B2B business, we have also taken important steps with the takeover of the ambitious pretzel producer Pretzel Baron in the US as well as with the replacement of a production line at Ditsch in Germany. Furthermore, thanks to the high level of demand, we have initiated the planning of the further expansion of our production capacities in the US and Germany.
All of this would not have been possible without you, our valued shareholders, and the trust you place in us. Over the past years, you have always believed in our strategy. We are doing everything in our power to continually live up to this trust. This is also expressed by the fact that, in addition to our various growth and investment activities, we have demonstrated with our operating business that our business model is successful.
Among other things, this is reflected in the increased EBIT. Excluding the acquisition costs and EBIT contribution from BackWerk, we succeeded in already reaching the medium-term goal for 2018 with an increase of the EBIT margin to 4.0%. We are also one year ahead of schedule with the achievement of the gross profit margin of 42.0%. External sales remained stable during 2017. Net revenues, excluding the sold Naville Distribution, slightly increased.
Valora is also making further progress in the area of digitalisation. In addition to new digital services, including pick-up/drop-off services, digitalisation is allowing us to increase overall customer loyalty. The new k kiosk app, which we introduced in Switzerland in March 2017, is geared towards this goal. Last year, we also simplified our distribution processes with sales staff by building an easily scalable and well-structured communication and collaboration platform on Google Cloud. This has already allowed us to replace seven existing applications and will enable us to make new offers available at our points of sale more quickly.
We are also on course with the implementation of our long-term financing strategy: following the capital increase of CHF 166 million, which was successfully concluded in autumn 2017, a Schuldschein issue for EUR 170 million was placed on the market at attractive conditions in January 2018 and met great investor interest. From the generated funds, Valora can, among other things, refinance the credit instruments falling due in 2018 at significantly better conditions.
As we look back on the past financial year, we would like to express our thanks to our customers, who make purchases at our points of sale on a daily basis. We would also like to thank all of our business partners and suppliers for their cooperation and the trust-based relationship we enjoy with them. And, in particular, we extend our thanks to the approximately 15,000 employees within our network, who brighten up our customers’ journey with their hard work and great commitment embodying our new values: nearby, quick, convenient and fresh.
You, our valued shareholders, also deserve great thanks for the trust that you have placed in us. We are thus delighted to propose an unchanged dividend of CHF 12.50 at the upcoming General Meeting on 13 April 2018. The dividend will be distributed fully from capital reserves.
We would like to take this opportunity to also inform you about an upcoming change in the Valora Board of Directors. After eight years as a member of the Board of Directors of Valora, Bernhard Heusler has decided not to stand for re-election at the General Meeting. We would like to cordially thank him for his commitment and his contribution to the transformation of Valora.
Franz Julen Chairman of the Board of Directors
Michael Mueller CEO
“We are now one of the leading vertically integrated food service providers in Germany.”
Michael Mueller, would you agree that 2017 was a good year for Valora?
Yes. We have completed our transformation into a focused convenience and food service provider, while at the same time setting the course for future growth with the acquisition of BackWerk and Pretzel Baron as well as the decision to expand our pretzel production capacity. In addition, we have made significant progress in the area of efficiency and process optimisation. And we finally completed the Naville integration with the sale of the La Praille building. All in all, it was a successful year.
What do you think were some of the highlights?
The acquisition of BackWerk is a landmark in our growth strategy we have communicated. We are thus now one of the leading vertically integrated food service providers in Germany. Another important highlight to note here is the trust shown by our shareholders, which was demonstrated by their approval of the capital increase. Furthermore, with the increase in the gross profit margin to 42.0 %, we have already achieved our medium-term goal for 2018. Excluding the acquisition costs and EBIT contribution from BackWerk, the EBIT margin stands at 4.0 %, meaning that we have also achieved this target one year ahead of schedule.
Let us talk about BackWerk for a moment. What potential does this format offer?
BackWerk, with its 345 points of sale, perfectly complements our other food service formats, such as Ditsch, Brezelkönig and Caffè Spettacolo, ideally supplementing these formats thanks to its “feel good food” concept. BackWerk’s city centre locations also complement our existing sites at transport hubs and shopping centres. Finally, BackWerk is an excellent steppingstone for the further internationalisation of Valora, as it gives us access to the Netherlands, which is a new market for us.
How many new BackWerk locations do you plan to open in the coming year?
It is our goal to open 80 to 100 new BackWerk locations, gross, over the next five years. In doing so, our focus will be on the countries where we currently operate, i.e. Germany, Austria and the Netherlands. We also plan to open several new locations in Switzerland.
As part of the acquisition, you carried out a capital increase. Overall, how do things stand in terms of Valora’s capital strength?
We have a very balanced financing structure and we have the resources to continue our growth. With our long-term financing strategy, we want to secure our future strategic and financial flexibility. The capital increase must be viewed in connection with the overall refinancing strategy. For example, in 2018 we also placed a new Schuldschein issue for EUR 170 million at highly attractive market conditions. These elements are used to refinance the BackWerk acquisition, to further finance the planned expansion of pretzel production capacities and to refinance the capital market instruments that will fall due in 2018.
In addition to BackWerk, you also acquired US pretzel producer Pretzel Baron.
Yes. Although it is a fairly small company, we see great potential. This acquisition will enable us to increase our footprint in the US – a market that, in terms of pretzel consumption, is already almost as large as Germany. Previously, we supplied the US from Germany, but our production capacity has become tight there. For this reason, we will invest a total of around EUR 50 million in the expansion of production in Germany and in the US in 2018/2019.
EBIT in CHF million
Last year was characterised by acquisitions. How was the operational business?
We are pleased that we were able to confirm the communicated expectations. The EBIT climbed by +9.3% to CHF 79.0 million. The EBIT margin increased by +0.4 percentage points to 3.8%. As mentioned, the gross profit margin improved to 42.0% (+0.5 percentage points). Without Naville Distribution, which was sold in 2016, net revenues would have increased by +0.9% on a year-on-year basis.
Can you give us details on how things went on the revenue side?
Retail Germany/Luxembourg recorded an increase in sales of +7.0%, while the Food Service division realised an increase of +10.5%. This growth is driven by a higher number of outlets operated by Valora itself and by positive same-store sales development, especially in the case of the Food Service formats (B2C). We also generated more sales in the B2B area – despite the replacement of a production line during ongoing operations in Oranienbaum. The growth at Retail Germany/Luxembourg and at Food Service more than offset the lower revenues generated at Retail Switzerland/Austria (-3.4%). The decline here was primarily due to a lower number of sales outlets and a lower same-store index.
“We have a very balanced financing structure and we have the resources to continue our growth.”
And on the cost side?
Our ongoing cost discipline, optimisations in our range and processes as well as adjustments in our network have led to an overall improvement in the EBIT margin. Particularly in Switzerland, we greatly increased profitability. In contrast, the profitability of Retail Germany/Luxembourg and in the Food Service division temporarily remained under pressure. However, we not only made savings, but the minimum wages for our employees in Germany and Switzerland have also been increased.
You also concluded a new collective labour agreement in Switzerland.
Yes. Following constructive discussions with our new social partner, the Kaufmännischer Verband, we concluded a new collective labour agreement (CLA) for all employees in Switzerland who are not already covered by another collective labour agreement. As part of this agreement, we increased gross minimum wages across the board and awarded professional qualification higher. Education should also be financially worthwhile, and we want to be a fair, attractive employer where employees can develop.
However, there has been criticism that the pay increases are too small and, in particular, that employees at k kiosk agencies have not benefited from them.
It is important to look at the context when you talk about wages. Our situation, with small-scale points of sale at highly frequented locations, is different from that of large retailers. Nor is the criticism justified regarding our agency partners. They are free to join the collective labour agreement. Also, whenever there is a new contract with us, they are required to abide by the minimum wage defined in the current CLA. Previously, they were required to pay the minimum wage based on the CLA that was in force when the agency opened.
Let us first take a quick look back and talk about the Food Service division. Did it meet your expectations last year?
Yes, absolutely. We realised a good performance in all formats. In Switzerland, our same-store sales at Brezelkönig and Caffè Spettacolo grew by +2.9%, while in Germany we recorded growth of +1.5% with Ditsch. In the B2B business, we grew +3.7%. Increases in revenue were roughly on balance with higher costs, especially with respect to diary prices. The division’s overall revenues increased consiberably despite the conversion work in Oranienbaum, which is a very good basis for further growth.
What are the next steps in the international expansion of Valora’s Food Service division?
In the B2B area, demand for our products is outpacing production capacity, which is why the planned capacity expansions are urgently needed. On the one hand, this demand is coming from our current sales markets in Europe, but we also see high growth potential in the US, where we are represented by Pretzel Baron, and in our current export markets. In the B2C area, on the other hand, our focus is on our current markets in Switzerland, Germany and Austria, and, since the acquisition of BackWerk, also in the Netherlands. For Brezelkönig International, we have just won the food travel group SSP as our first franchise partner in Austria and opened a joint store at Vienna Schwechat Airport.
So the focus in future will be on the franchise model?
Yes, Valora has had good experiences with this model as well as with the agency partner model. We already operate 69% of our sales outlets under these models. The franchisees act as entrepreneurs and thus participate in the shared success. BackWerk, a very well-known and established franchise concept, is now part of the Group and on the whole we will benefit from its experiences.
How did the retail business do last year?
Consumer behaviour is changing substantially, which has also an impact on print media and tobacco sales. Print media products recorded another decline in Switzerland and Germany. In Switzerland, tobacco product sales fell, while in Germany this product category benefited from market consolidation and even grew. Our strong ok.– brand also saw very positive growth, and the more than 700 modules with coffee from Caffè Spettacolo and Starbucks that we installed in our Swiss points of sale proved to be very popular among customers. We also see high potential in the convenience business, which is especially relevant for our avec format.
What is next then for avec?
We have developed the concept over the past year and already tested it at two locations in Switzerland. This concept will receive even more attention this year. We are confident that the new fresh product concept will help avec grow further as well.
You also introduced CBD hemp products in Switzerland last year. How is this product range doing?
Demand is high. These products seem to meet a real customer need. However, they remain interesting niche products. We see especially significant demand in alternative nicotine and e-smoke products, which we introduced in 2017. In Germany, in particular, we have pushed ahead with the e-smoking rollout. Tobacco – including corresponding alternative and replacement products – remains a strong driver of customer footfall.
One growth initiative in the retail area involves the business as a service partner for third parties. How are things going here?
We are pleased that we continue to be able to sell public transport tickets in Switzerland. The customer response to the announcement by the SBB that it would suspend this service was in some cases very strong. We have also further expanded our cooperation with Swiss Post and are increasingly offering pick-up/drop-off services, including with Swisscom easy point. Customers can also increasingly pay in cash for their online orders at our points of sale. Our offering of other financial services has also developed further. This includes our consumer credit products from bob Finance.
How do things stand financially with the latter?
We are satisfied with the number of customers and have further strengthened our market position. The lifetime value of our consumer credit business has been positive for some time now and the key figures are developing satisfactorily.
And what are the plans for Valora’s retail business this year?
The retail business is an important pillar of our strategy. However, we need to further expand the existing business with updated concepts, adjustments to our product range, new service offerings and measures aimed at increasing efficiency. This requires innovation, which along with digitalisation, is a driver in the retail business.
“Innovation is required, which along with digitalisation, is a driver in the retail business.”
You repeatedly emphasise the great opportunities that digitalisation offers for Valora. How does this impact business specifically?
It allows for new services such as those mentioned above, which we bring to market either on our own or together with partners. Our digital strategy also supports our promotional and loyalty activities, such as the k kiosk app, which was recognised with an award by NACS, a convenience industry organisation. Digitalisation also has a substantial impact on our efficiency and our processes.
Can you give an example of this?
Last year, we built an easily scalable and well-structured communication platform for our sales staff on Google Cloud and rolled it out to all Swiss retail points of sale in record time. In doing so, we have replaced seven applications. The simplified sales communication with VAPOS.info will also allow us to make new offerings available more quickly in our points of sale. We will now connect our other formats to it in stages.
Not all of Valora’s experiences with digitalisation have been good. There was much criticism of the customer flow analysis pilot at the Zurich Main Station.
Valora takes the issue of data protection very seriously and works intensively to examine corresponding projects in advance, from both a technical and legal perspective. However, we definitely did not provide enough information at that time. All we wanted to do was take advantage of the WiFi signals of smartphones to measure customer flows. We would use this information, for example, to optimise staffing. The aggregate data that Valora received in connection with the project could not be attributed to a specific person at any time due to the data’s anonymity. Generally speaking, we are interested in approaches and solutions that can provide us with valuable information, but naturally always ensuring that they comply with the relevant data protection legislation and offer customer benefits.
“We aim to brighten up our customers’ journey – nearby, quick, convenient and always full of fresh ideas.”
Where will Valora focus in 2018?
Valora will focus on the further expansion of the food and drink offering as well as the implementation of our new fresh product concept in the entire kiosk and convenience business. We will also focus on the consolidation of the BackWerk acquisition, our ongoing international expansion and the implementation of the planned expansion of our production capacity. In addition, we will invest in our innovation capacity as well as new digital offerings and the digitalisation of our processes. So we have a lot of work ahead of us, but we are well positioned in terms of management and organisation. And the two new members of the expanded Group Executive Management – Roger Vogt as CEO of Retail Switzerland & Austria and Philipp Angehrn as Head of Transformation & Project Management Office – will help us in these efforts.
Given the pace and amount of change, will employees be able to keep up?
I am sure they will. We have excellent employees on all levels and in all formats. I would like to take this opportunity to thank all employees for their commitment and their motivation. Valora wants to provide employees with prospects and allow them to make a real difference themselves. We aim to brighten up our customers’ journey – nearby, quick, convenient and always full of fresh ideas. A positive corporate culture is important for our success.
What concerns you when you look ahead to the coming months?
The accelerated decline of print media, historically high prices for raw materials for dairy products, declining footfall in shopping centres and greater competitive pressure in highly frequented locations remain challenging factors. But I am convinced that we at Valora have all reason to be optimistic. We are optimally positioned to take advantage of the ongoing trend towards high-margin “foodvenience”, the increasing number of visitors at highly frequented locations, more customised products and the merging of digital and physical offerings. However, we cannot afford to stand still and must instead be innovative and agile.
Are further acquisitions being considered?
Yes, because we generally follow a growth strategy and the acquisition of BackWerk was certainly not the last one. Our long-term financing strategy allows us to review such opportunities at all times. At the same time, however, we also want to invest in organic growth, the current business and innovative offerings.
“We are optimally positioned to take advantage of the ongoing trend towards highmargin ‘foodvenience’.”
Ernst Peter DitschMember
Cornelia Ritz BossicardMember
Thomas EiseleCEO Food Service
RESPONSIBILITY TO EMPLOYEES, BUSINESS PARTNERS, SOCIETY AND THE ENVIRONMENT
Since sustainable activities form the basis for the long-term competitiveness of each and every company, Valora views economic, environmental and social responsibility as a key component of its corporate policy. This report highlights the measures Valora employs to achieve its goal of economic success while acting responsi-bly toward the environment, society and its staff.
SATISFIED EMPLOYEES, ENTHUSIASTIC CUSTOMERS
Valora focuses its social activities on supporting employees and cultivating relationships of trust with customers and business partners. After all, happy, competent and well-trained employees are the key to success. With that in mind, Valora wants to ensure that its employees are satisfied with and motivated by the work they do and therefore offers continuing education and training opportunities, among other things, in addition to attractive employment conditions. At the same time, Valora constantly reviews daily collaboration to see which processes and systems can be used to further improve the satisfaction and organisational conditions for employees. Staff already benefit from flexible working models and excellent fringe benefits. Employees show their appreciation by working hard every day to ensure that each and every interaction with customers leaves a lasting positive impression.
Employee surveys are conducted at regular intervals to measure employee satisfaction effectively. A variety of measures were extrapolated and implemented in response to the results of the last survey, which was conducted at the various business units between 2016 and 2017. These concerned the employment conditions and staff development on the one hand and improvements in terms of communication, the transfer of knowledge and collaboration on the other. For example, relevant information was made more easily accessible by means of various digitalisation projects. Among other things, the introduction of a new IT platform for further optimising the flow of communication between the head office and retail outlets during the sales process contributed to this. The new tool, VAPOS.info, has been used by Valora Retail Switzerland since summer 2017. According to Roberto Fedele, Head of Corporate Information Services, in the first few months it helped make sharing information with one another easier, more structured and more direct, and it also helped improve sales processes in general. The plan is to role out the cloud-based communication solution across the entire Group. Other IT projects support the continuous enhancement of internal process efficiency.
A survey of Retail Switzerland agency and franchise partners was carried out in summer 2017. By the end, it achieved a good response rate of about 55 %. One insight revealed by the survey: the partners stressed the importance of a good relationship with Valora, which they viewed as very positive. Valora’s ok.– brand also received good marks. All of the results were presented at various partner meetings and workshops were conducted to define measures to achieve improvements in the areas of information, range management, promotions and others.
In light of the valuable feedback yielded by these surveys and the consistently high participation rates, Valora plans to conduct another employee survey in 2018. As in previous years, the results will be shared in a transparent manner with the entire organisation once they have been analysed.
NEW COLLECTIVE LABOUR AGREEMENT: FOCUS ON EMPLOYEES
Valora aspires to be a fair employer with satisfied employees who can make full use of their potential. To make that a reality, Valora and the Kaufmännischer Verband (kfmv) reached an agreement on a revised collective labour agreement (CLA) for employees in Switzerland who are not already subject to another CLA as part of the new social partnership approved at the end of 2016. The new CLA entered into force at the start of 2018 and is intended to promote the transparency and sustainability of Valora’s employment conditions.
“We want to be sure that our employees benefit from good working conditions, fair wages compared to the rest of our industry, and attractive development opportunities.”Michael Mueller,
The new CLA improves working conditions and provides greater rewards for professional training. In addition, Valora introduced paternity leave of ten days for all employees in Switzerland. Michael Mueller, CEO of Valora, says: “We are very pleased to have a new collective labour agreement in place for our Swiss employees following the constructive discussions with the kfmv. We want to be sure that our employees benefit from good working conditions, fair wages and attractive development opportunities.”
There are a number of employee representation organisations at Valora to ensure that employees also have an internal point of contact to address their concerns. In Switzerland, this role is assumed by the Staff Council, which meets with the kfmv and Valora Group Executive Management at regular intervals in order to share staff feedback. In Germany, employees are supported by a number of works councils.
CREATING VALUES, LIVING VALUES
“The nicest thing about my job is making customers happy.” This is not a quote from a promotional brochure, but rather a statement by Baidullah Naroei, a k kiosk agency partner in the Swiss city of Burgdorf. It is an impressive reflection of the drive felt by all employees at Valora. No matter whether they work in a retail outlet, a production facility or an office location, employees strive to brighten up their customers’ and business partners’ day. This is borne out in conversations with numerous employees, on the basis of which Valora developed its new corporate values. Nearby, quick, convenient, fresh – four values that represent Valora. Both when employees interact with one another and when they deal with their customers and partners.
In order to ensure that the values worked out with numerous employees are instilled in the entire organisation over the long term, they will now also be integrated into Human Resources and corporate processes.
PROFESSIONAL SUPPORT, PERSONAL DEVELOPMENT
Valora supports its employees with a broad and constantly growing range of training and development opportunities. One example of this is Valora Campus, which was introduced for Retail Germany. This programme provides employees with opportunities for professional development so they can improve their specialist qualifications, learn self-management skills or leadership skills. Coaching was integrated two years ago as a key component of the management culture. It has now been installed and established across all management levels. Peter Obeldobel, CEO of Valora Retail Germany & Luxembourg, explains: “In order to be even closer to the customer when making our decisions, it is important to transfer responsibility to those employees who are closest to the target group.”
Another training offering at Retail Germany is the “Train the Trainer” course. A total of ten employees successfully completed this in February 2017 in cooperation with Hamburg Chamber of Commerce. As well as the coordination of group processes, the focus was among other things placed on the methodical and didactic structuring of seminars. The employees are now able to pass on their newly acquired knowledge within the service and offer seminars on topics such as time management and team communication.
“In order to be even closer to the customers when mak-ing our decisions, it is im-portant to transfer respon-sibility to those employees who are closest to the target group.”Peter Obeldobel,
CEO Valora Retail Deutschland & Luxemburg
Regular management courses are held in Switzerland for sales staff as well as leadership weeks for members of middle management. These training sessions are led by external specialists and contribute significantly to personal and professional development. In addition, each year all of the managers of the various Valora retail shop formats congregate their respective agency and franchise partner meetings where participants have an opportunity to learn new information, talk to other participants and cultivate their personal networks.
At pretzel specialist Ditsch, the increase at the middle management level was received positively. Of the seven new positions created at this hierarchy level at the Oranienbaum location, four were filled internally. Putting employees in new management roles not only ensures much better employee support, but also greater acceptance of the new managers as well.
E-learning is an increasingly important component of training and development. It is also in line with Valora’s strategy of employing innovative platforms and digitalisation initiatives in all business areas. Valora uses the Avendoo learning management system to offer training and development opportunities to employees. This system allows to provide sales staff with uniform information in a timely manner, irrespective of the employee’s location, time zone or employment level. The tool also ensures that employees learn the prescribed standards regarding the Anti-Money Laundering Act and wire transfers as well as the youth protection. Based on the number of positive comments it has received, Valora has decided to expand this area further.
ATTRACTING YOUNG TALENT, SECURING THE FUTURE
Valora has been committed to finding young talent in the retail sector for more than 15 years. In Switzerland alone, there are currently 17 apprentices completing their education at Valora. Of these, 12 apprentices are completing training as a certified retail assistant (EBA) or certified retail specialist (EFZ) in the kiosk and food and beverage sector. In addition, Valora currently has five apprentices in its basic commercial training programme. An ongoing commitment to training can also be seen at Ditsch. The company trains more than 40 apprentices at its Mainz and Oranienbaum locations each year. The top goal is to tie young talents to the company while they are still completing their education and to be able to hire them after they finish their studies. Apprenticeships are also available in Retail Germany in the areas of press sales specialist, bookseller and the retail trade. A total of ten young people are currently completing these training programmes.
The success story of the one-year Valora trainee programme for university graduates also continued this year in Switzerland. In parallel with this, a three-and-a-half-year dual course of study in business administration is being offered in Germany in collaboration with Nordakademie Elmshorn in which six students are currently participating. Following successful completion of the programme, they will have the opportunity to work in management or as junior sales managers at Valora on a permanent basis with attractive terms of employment. “We will also continue to utilise this programme in the future and recruit new trainees,” stresses Bianca Pegoretti, Head of HR at Valora Retail Germany.
AGENCY AND FRANCHISE OPERATIONS: MAINTAINING CUSTOMER CONTACT POINTS
In order to remain aware of the needs of both employees and customers, Valora maintains a culture of open communication and collaborative partnership with its agency partners, franchisees and managers who all greatly appreciate the approach. For example, Mirjana Dakic, k kiosk agency partner at Zurich Airport says: “I really enjoy the partnership with Valora. They give me a lot of freedom, but at the same time they also offer a substantial amount of support.”
To ensure a strong partnership, there is close coordination with representatives of the retail outlets during regular committee meetings and working groups. Training sessions on topics such as labour law, business administration and pensions have been developed and optimised on the basis of valuable feedback from the agency partners. Valora also offers introductory training, which was provided a total of five times in German- and French-speaking Switzerland in 2017. Valora Retail uses the training sessions to provide future agency partners with information about key aspects of their daily work. These include tasks such as business administration, inventories, staff management and pensions. The training is greatly appreciated by future agency partners. “The support I received from Valora from day one made starting on my own much easier,” says Ankul Lal, who has worked as an agency partner for Valora in Switzerland since 2014.
“The support I received from Valora from day one made starting on my own much easier.”Ankul Lal,
Agency partner k kiosk Langnau i.E.
Valora maintains an active dialogue with its agency partners and franchisees in the German retail business as well. Each year, the company invites them to a three-day annual meeting. The motto of the 2017 event was “Exciting customers”. Customer focus was the central theme of the entire programme. Every year, the franchisee and shop manager of the year are honoured at this meeting. Awards are presented to partners who have distinguished themselves through their excellent work and great commitment. In addition to the annual meeting, there is a committee of experts in the Convenience area in Germany that regularly convenes. It is made up of franchise partners, employees from the service divisions in Hamburg and members of Deutsche Bahn system management and aims to develop the business further through intensive dialogue in the common interest.
Both Ditsch, the pretzel specialist, and BackWerk, Germany’s largest food service bakery, set great store by mutual trust and fairness in dealings with their agency and franchise partners. In fact, the continuous development of employees and partners is one of the most important aspects of our collaboration. For example, BackWerk allows its employees to attend part-time classes while they are employed or to take part in internal service training.
PROTECTING EMPLOYEES, PROMOTING OCCUPATIONAL SAFETY
Valora wants to ensure the health and safety of its employees in the workplace. To do so, regular inspections are carried out at Valora Retail Germany and BackWerk by occupational safety specialists, company physicians and occupational physicians. Individual workstations are assessed and any needs or requirements in terms of ergonomics or lighting are documented and then addressed where necessary. At Retail Germany, this task was assigned to a single company beginning on 1 January 2017. This ensures that all outlets receive uniform and comprehensive service. Reviews for further improving occupational safety are also carried out at BackWerk. To this end, administration employees will receive adjustable-height desks starting in 2018.
The promotion of health in the workplace plays an equally important role at Valora Retail Switzerland. The “Valora Schweiz AG group solution” for implementing occupational health and safety has been in place here since 2011. By law, group solutions must be reviewed periodically and submitted to the authorities for recertification. The recertification was carried out by the competent authorities in 2017 and is now valid for another five years.
Employee health and safety takes top priority at Ditsch as well. The pretzel baker offers all of its employees occupational health care, which is provided by external specialists. In addition, another external partner makes monthly rounds to proactively assess and optimise occupational health and safety and workplace ergonomics. If employees are absent for extended periods due to illness, there is a company integration management programme to help reintegrate them in work life when they return. If an employee is unable to return to his or her previous position, the company works with the company physician, the authorities and the employee’s line manager to determine how to reintegrate the employee into the workflow at Ditsch.
Regular training on occupational health and safety as well as product and personal hygiene is also conducted at Brezelkönig. The training sessions are carried out at least once annually and are supplemented with driver safety training for drivers.
PARTNERSHIPS: TRUSTING AND LONG-TERM
As a company with a history dating back more than 100 years, Valora is very familiar not only with the needs of its customers, but also those of its partners and suppliers. Since its beginnings, the leading convenience provider has relied on long-term partnerships based on mutual trust. While daily business is defined by issues such as lease management and questions regarding the product range, the overarching focus is on customer needs.
The cooperation with Zurich Airport AG, which dates back more than 50 years, is just one example of the sustainable partnerships entered into by Valora that are based on mutual respect. A further example is the cooperation with Swiss Federal Railways (SBB), which has already existed for more than a century. André Bagioli, Head of Expansion/Location Management, explains: “Our work with Swiss Federal Railways is underpinned by professional and partnership-based cooperation that goes beyond a pure tenant-landlord relationship”.
Selecta is the coffee partner for all Valora retail outlets in Switzerland. The collaboration between the two companies is based on their shared history. The partnership is founded on great mutual respect for each other’s core competencies as well as quick, open communication aimed at achieving the long-term objectives each company has set.
“The cooperation with Zu-rich Airport AG, which dates back more than 50 years, is just one example of our sustainable part-nerships that are based on mutual respect.”André Bagioli,
Head of Expansion / Location Management
The close partnership between Swisslos and Valora has also been in place for many years, dating back to the founding of Swisslos in 1937. With its extensive distribution network, Valora makes a significant contribution to total sales at Swisslos. The Swisslos cooperative’s net profits go to the cantonal lottery and sport fund, which supports 12,000 charitable projects and institutions in the areas of culture, sport, the environment and society. Since its founding, Swisslos has generated more than CHF 7 billion for charitable purposes and is thus the most important sponsor of culture and sport in Switzerland. Thanks to the sales at its retail outlets, Valora has played a major role in this success.
Valora has also worked with Loterie Romande for more than 30 years. This partnership grew with Valora’s acquisition of Naville and its increased presence in French-speaking Switzerland.
Among the long-term partners of Retail Germany is the company Lekkerland. The wholesale company supplies the retail outlets operated by Valora and shares its expertise in category management. The success of the partnership is based on excellent local logistics and lean administrative processes.
An equally long-standing partnership exists in Germany in the lotteries area. Valora Retail Germany is linked through intensive cooperative partnership with the 16 independent companies of Deutscher Lotto- und Totoblock (DLTB).
Ditsch, too, relies on long-term partnerships. The pretzel baker puts a special priority on working together in a spirit of trust. Ditsch also wants to be sure that all of the parties involved in its partnerships adhere to the same standards with respect to proper working conditions as well as recognised social and environmental standards.
TEAMWORK: AT AND OUTSIDE OF WORK
“I’m thrilled that the ok.– brand and the Valora Group believe in me and support me as a sponsor.”Belinda Bencic,
The ok.– brand represents a dynamic lifestyle and a trendy companion for young, mobile people. In keeping with this image, ok.– is active in the area of sport sponsorships. Among other things, this includes support for the MS Sport Camp, where children receive the opportunity to pursue their passion for sport.
ok.– also sponsors one of the greatest talents in Swiss women’s tennis, Belinda Bencic. With her youthful, dynamic and authentic personality, she is the perfect embodiment of the ok.– brand. Roger Vogt, CEO of Valora Retail Switzerland & Austria: “We are very proud to promote the career of such a likeable athlete.” The tennis player is also excited about the partnership: “I’m thrilled that the ok.– brand and the Valora Group believe in me and support me as a sponsor.”
ACCEPTING AND BEARING SOCIAL RESPONSIBILTY
The focus in the area of economic sustainability is on ethical behaviour, including compliance with the Code of Conduct, adherence to youth protection laws and observance of hygiene standards.
The Code of Conduct sets out the behaviour that is expected of Valora employees and stakeholders throughout the Group. Valora has eleven basic principles in place to ensure that it meets the high standards of ethical behaviour and integrity. One of these principles is strict compliance with human rights, which Valora also expects from its suppliers. These are expected to adhere to the Supplier Code of Conduct, which is part of the entire Group’s supply contracts and, more recently, Valora’s GTC.
According to Alexia Bühler, Legal Counsel & Compliance Officer, Valora will introduce an e-learning session on the topic over the course of 2018 in order to familiarise employees with the Code of Conduct. It will be geared towards both administrative and sales staff.
“In order to familiarise employees with the Code of Conduct, Valora will in-troduce an e-learning ses-sion on the topic over the course of 2018.”Alexia Bühler,
Legal Counsel & Compliance Officer
A compliance manual helps employees understand and engage in appropriate behaviour and an ethics hotline has been set up for employees, agency partners and franchisees. This hotline will also be made available to suppliers in 2018. Instances of unlawful behaviour, criminal activities and complaints can be reported anonymously to the Compliance Manager via the ethics hotline.
The issues of quality assurance, crisis management and recall processes are reviewed on an ongoing basis at Valora. Producer quality assurance, product information and adherence to the law and supplier terms and conditions must be monitored. “Large industrial producers and suppliers must have at least one of three certifications – BRC, IFS or ISO. Plus the self-control plan drawn up under the principles of HACCP must not be more than two years old,” explains Michel Vaucher, Project Manager at Valora Retail Switzerland. Smaller, regional commercial producers and suppliers must also have an HACCP self-control plan in place. This includes an analysis of hazards, the definition of critical control points and guidelines for controlling hazards, and a monitoring system. The plan must also define corrective measures and instructions for complying with manufacturing best practices.
STRICT QUALITY CONTROLS, BEST PRODUCTS
Each item in the Retail Switzerland product range must include product specifications from the supplier. Swiss producers submit written confirmation that their products comply with the Swiss Foodstuffs Act. Foreign producers must demonstrate compliance by submitting confirmation from a Swiss specialist centre. The labelling requirements for packaging, e.g. specification of the shelf life, apply for both food and non-food items. The shelf life and storage conditions must also be met during transport.
Strict quality requirements are also imposed for the ok.– brand. For example, marketability tests are conducted for all new ok.– products and changes to packaging and lab analyses are carried out by suppliers on a regular basis. “Each energy drink additionally undergoes both an in-house analysis and an external analysis conducted by a certified lab at least once a year,” says Michael Betschart, Head of Sales Promotion for the Swiss retail business.
To ensure that it only sources products that are grown as environmentally friendly as possible, Ditsch has been a member of the Roundtable on Sustainable Palm Oil (RSPO) since February 2015. RSPO aims to ensure the sustainable production of palm oil around the world, providing certification along the entire value chain. In addition, Ditsch has since 2015 exclusively used cage-free eggs in the production of its diverse range of frozen pretzels, pizza snacks and croissant specialities. As a food producer, Ditsch production facilities undergo annually recurring audits in compliance with IFS and BRC standards. Both audits are carried out without advance notice and ensure that certified companies manufacture their products in compliance with the agreed specifications and that they use a continuous improvement process to make improvements to these products.
In 2017, Brezelkönig was once again successfully certified in accordance with ISO 9001:2015. “As a company that produces and distributes baked goods, this ISO certification is a guarantee of solid and reliable processes,” says Michel Gruber, Managing Director of Valora Food Service Switzerland. In addition, Brezelkönig can also display the SUISSE GARANTIE label on its pretzels. This label is a guarantee that may only be placed on products with ingredients produced and processed solely in Switzerland.
Valora aims to provide the best quality not only in terms of the products it sells, but also the services it provides. It pays particular attention to customer focus, specialist expertise, communication and accessibility. Corresponding initiatives have resulted in numerous awards. For example, Press & Books took the top spot in the “Newspapers and magazines” category of a customer survey conducted by independent consumer magazine TESTBILD in Germany in 2017. The rating also included k presse + buch shops, which placed third. They are all united in their commitment to excellent service quality.
HIGHEST PRIORITY: PROTECTING CUSTOMERS
Security takes top priority at Valora. Valora has therefore decided to implement ISO 27001, known as the ISMS (Information Security Management System) standard. An ISMS is a combination of methods, processes and rules within a company used for the continuous management and improvement of information security. The ISMS guarantees the confidentiality, integrity and availability of information while applying a risk management process. Data is protected through the use of state-of-the-art security software. Various certificates are used for secure data transmission. One of these certificates is “SSL EV” encryption – the highest bank standard for encrypted connections.
“Upper management, re-tail managers and employees want to help to con-stantly improve youth protection.”Roger Vogt,
CEO Valora Retail Switzerland & Austria
Youth protection is taken very seriously at Valora and all employees receive regular training on this issue as a result. With the help of annual e-learning training modules, topics such as the sale of tobacco or alcohol to young people are discussed and tested. Completion of the training is mandatory for all of Valora’s own outlets, agency partners and franchisees. In addition, retail managers inform their employees in the retail outlets of the importance of this topic and the legal requirements governing it.
Technical support is provided by the GK POS systems. When alcohol, tobacco or adult magazines are scanned at the points of sale, the reminder message “Check age” appears on the display screen. Employees are also reminded of the applicable local requirements by signs posted on the points of sale. “Upper management, retail managers and employees are aware of the importance of these controls and want to help improve youth protection and prevent the misuse of products,” confirms Roger Vogt, CEO of Valora Retail Switzerland & Austria. To this end, test purchases carried out as part of mystery shopping trips are conducted each year at more than half of all retail outlets to ensure compliance with requirements.
The offers of bob Finance AG are aimed at borrowers with an affinity for digital technology whose lives are centred in Switzerland. Interested customers can submit their loan application online. For the employees, the regulations and directives serve as the basis for their daily work. bob not only assumes its social responsibility, it is also aware of its great responsibility to its customers. To prevent and protect borrowers from taking on too much debt, bob has implemented a three-tiered system of checking credit ratings that is regularly audited for its effectiveness by internal and external partners. During the first phase, bob checks whether the applicant meets the minimum legal requirements as well as bob’s conditions. In the second phase, the budget prepared by the applicants themselves is checked to ensure that the loan amount meets the acceptability guidelines for consumer loans. During the final phase, the information on record with the Central Credit Information Bureau (ZEK), the Information Bureau for Consumer Loans (IKO) and other external information platforms is collected.
CONSERVE RESOURCES, REDUCE WASTE
The careful use of resources is a key aspect of measures to ensure environmental sustainability. For example, since 2014 all Valora retail outlets in Switzerland have accepted PET bottle returns and handed them over for proper recycling. At Retail Germany, bottles with a deposit are collected and recycled at the retail outlets as part of the DPG deposit system. The same applies to paper in the outlets. Pretzel specialists Ditsch and Brezelkönig collect packaging (sorted by material) in their production facilities, and then efficiently return it to the recycling loop.
“In order to keep waste at Brezelkönig as low as pos-sible, the product range on offer in retail outlets is baked fresh on demand.”Thomas Eisele,
CEO Food Service
In Retail Germany’s retail outlets, the introduction of new points of sale systems has reduced the consumption of paper for receipts substantially. Receipts here are no longer printed automatically, but are instead only printed at the customer’s request or for special purchases where the customer needs the information on the receipt.
At Caffè Spettacolo, customers have been able to have their drinks poured not only in disposable cups but also in reusable containers as well for the past three years. The coffee bar chain hopes this will reduce the number of paper cups that wind up in the rubbish. To motivate more customers to use reusable cups, Caffè Spettacolo gives guests who bring their own cup a free upgrade to its “grande” size.
BackWerk allows its customers to bring their own cups into its retail outlets. Germany’s largest food service bakery also participates in Hamburg’s KEHR.WIEDER recycling campaign. Customers who bring their own cup to participating shops receive a discount on their hot drink as part of the campaign. The goal is to make a meaningful contribution to reducing the number of disposable cups used.
According to Thomas Eisele, CEO Food Service, the product range on offer in retail outlets is baked fresh on demand in order to keep waste at Brezelkönig as low as possible as well. Items that are not sold are returned to Emmenbrücke by the logistics team, where it is reprocessed as biogas. BackWerk also aims to put unsold food that has no quality issues to good use. The food service bakery offers such products at a heavily discounted price via the “Too Good to Go” app or it donates them to soup kitchens and other charitable institutions.
SAVE AND REUSE ENERGY
All Valora Retail shops in Switzerland have used renewable electricity since 2016. Ditsch retail outlets as well as the company’s production facilities in Mainz and Oranienbaum also use renewable power. In this case, the electricity is obtained from power plants that have transparent, verifiable certification that their electricity comes from 100 % renewable sources. In addition, Valora has developed an action plan that includes specific energy-saving measures. For example, some of the machines in the retail outlets are on timers that cut off their power supply at night.
In order to continuously improve its environmental performance, Ditsch aims to use resources efficiently at its production locations. To do so, it installed heat recovery systems at its production facilities in 2009 which make it possible to use recovered waste to heat both the building and water. Expansions that have already been completed and others that are still pending have added or will add other heat sources to the recovery system.
In addition, all sources of light Group-wide have been reviewed and will be replaced with LED lighting when renovations are carried out. Exterior advertising in Germany, for instance, now uses only LED lighting, which reduces both energy consumption and maintenance costs. Energy-efficient coolers and coffee machines and class A+ baking ovens are being installed during renovations. They generate less heat loss and consume less electricity.