GRI 102-10 GRI 102-14 GRI GRI 102-54
Today, our vision of the future is focused on generating progress and development for everyone. Human beings inspire us and drive us to promote sustainable development by internalizing the necessary capabilities to prevent environmental deterioration and to generate prosperity for the communities where Grupo Nutresa operates.
Carlos Ignacio Gallego Palacio
Grupo Nutresa CEO
Throughout its history, Grupo Nutresa has dreamed big and has achieved its purpose based on the trust of all the people surrounding the Organization.
Currently, amid the celebration of our first one hundredth anniversary, we are able to say that we are the result of what we have shared with millions of people, that is, the sum of our triumphs, learning experiences, the challenges we have overcome and a great deal of work well done.
Since the beginnings of the Company in 1920, a framework of action was established based on integrity, respect for people and collaborative development, values that still govern our actions and enclose our corporate management model, where sustainable management is the basis of a business that intends to transcend.
The progress of the communities and the protection of our planet are major priorities for Grupo Nutresa and they are directly related to the ability to manage the businesses while addressing the expectations and needs of our stakeholders. To achieve this, we strive in developing the proactive behavior and the analysis and interpretation of trends, emerging global challenges, new technologies and swifts in the preferences of customers, shoppers and consumers.
Throughout its history, Grupo Nutresa has dreamed big and has achieved its purpose based on the trust of all the people surrounding the Organization.
These capabilities are necessary to prosper in an increasingly aware, changing and competitive world. We are convinced that the sources of innovation and productivity that drive both value and competitive advantage emerge from the solutions to the economic, social and environmental challenges of our society.
As a result of this conviction, for the first time in our history, we have been acknowledged as the most sustainable food company in the world, according to the Dow Jones Sustainability World Index 2019. We also maintain our position as the most outstanding company in the Dow Jones Sustainability Emerging Markets Index and in the MILA Pacific Alliance Index, which are acknowledgments to our search for social progress, economic development and the conservation of the natural capital for future generations.
The results presented in this Integrated Report have been prepared in accordance with the framework of the International Integrated Reporting Council (IIRC) and with the GRI standard (exhaustive option), abiding by international guidelines and based on our materiality matrix.
Grupo Nutresa sales
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Sales of innovative products
of total sales
Consolidated market share
Social investment in the strategic region
SALES IN COLOMBIA
SALES IN COLOMBIA
For further information, we invite you to review the printed document and the supplementary information in full detail, which are available on our website https://www.gruponutresa.com/en/.
Grupo Nutresa relies on a portfolio of widely recognized and appreciated brands that contribute nutrition, well-being and enjoyment, which are also led by a deeply talented and committed team.
Our People: Grupo Nutresa permanently works on consolidating an organizational culture centered on the recognition and respect for the being, inclusion, inspiring leadership, and the promotion of a balanced life.
Throughout 2019, the Organization continued developing constructive, challenging and inclusive work environments with leaders that contribute to the comprehensive development of people and inspire their coworkers to achieve the organizational purpose and the objectives of their work teams. That is how we have reached levels of excellence in terms of
organizational climate and commitment, in addition to the consolidation of practices that promote a balanced life and people spending time with their families. As of 2019, ten Grupo Nutresa companies hold the Familiarly Responsible Company certification, and five hold the Healthy Organizations certification granted by the Colombian Heart Foundation.
We kept promoting training programs that strengthen the sense of collectivity and the inspiration to attain goals, which are key aspects within our organizational leadership model. Additionally, we made progress in the development of capabilities such as the receptiveness to transformation, the adaptability to change and the swiftness in our actions, and we worked on the consolidation of healthy and safe work environments.
Grupo Nutresa continued improving, processes and using new technologies that allow us to consolidate our market entry capabilities in order to be present with the timeliness, affordability and ubiquity required by our customers, shoppers and consumers.
We concluded the year by being the top company in terms of talent attraction and loyalty in the Colombian food sector according to the “Merco Talento” results, an acknowledgment that motivates us and reinforces our commitment to creating greater and better development opportunities for our employees.
Brands with a superior purpose:: Throughout 2019, Grupo Nutresa continued strengthening its brands to make them increasingly relevant and innovative. The Organization also accelerated the expansion of its portfolio in fast-growing categories such as coffee and healthy snacks, and adjusted the portfolio to make it more efficient, dynamic and competitive. We now have 24 mega-brands that hold the first and second places in the market where they operate. All these achievements have been attained based on a strategy centered on the deep understanding of customers, consumers and shoppers.
Market entry capabilities: Grupo Nutresa continued improving processes and using new technologies that allow us to consolidate our market entry capabilities in order to be present with the timeliness, affordability and ubiquity required by our customers, shoppers and consumers. Over the year, we reinforced the traditional channels and supermarkets by means of alliances and projects that drive shared growth. Likewise, we accelerated the positioning of our brands in new points of sale and enhanced the scope of fast-growing channels such as Novaventa, the restaurant network and the institutional channel.
As of the date of this communication, Grupo Nutresa has a distribution network that directly serves more than 1,4 million customers in the strategic region, reaches more than four million consumers in Colombia through Novaventa’s network of individual entrepreneurs, and has 842 restaurants across the region.
The financial results for 2019 reflect the application of a new accounting standard for leases in the financial statements called “IFRS16 Leases,” which eliminates the distinction between operating and financial leases, proposing a unique presentation model. The statement of financial position includes an account in the assets that represents the right of use for the lease term and an account with its corresponding liabilities. The profit and loss statement records the depreciation of the assets derived from the right of use of the period and financial expenses associated with the liabilities derived from the right of use.
In 2019, Grupo Nutresa exhibited an outstanding commercial dynamic, achieving consolidated sales for COP 9,96 trillion, which represents a 10,5% growth over the sales recorded the previous year. In Colombia, the revenue totaled COP 6,20 trillion, representing 62,3% of Grupo Nutresa’s consolidated sales and growing 8,1% with regard to 2018. More than 80% of this growth is driven by greater volumes recorded for all of the Organization’s business units.
International sales in Colombian pesos amounted to 3,76 trillion, that is 14,5% more than those of 2018, representing 37,7% of the total sales. Stated in dollars, these sales totaled 1.142 million, that is 3,0% higher than the previous year.
The gross profit for the period amounts to COP 4,4 trillion with a 0,8% decrease in the gross margin compared to the same period in 2019, which was caused by the increased costs of several commodities over the year.
In 2019, Grupo Nutresa exhibited an outstanding commercial dynamic, achieving consolidated sales for COP 9.96 trillion, which represents a 10.5% growth over the sales recorded the previous year.
The operating profit, which totaled COP 959.621 million, presented a 13,0% year-on-year increase. By excluding the effects of the application of the IFRS16 standard, this result stands at COP 927.045 million, showing a 9,2% increase.
Due to the greater revenue and an adequate cost and expense management, Grupo Nutresa reports a consolidated EBITDA of COP 1,35 trillion, with a sales margin of 13,5%. By excluding the effects of the IFRS16 standard, the EBITDA stands at COP 1,2 trillion, with a 6,2% growth and a margin on sales of 12,0%.
In the post-operative items, the Organization recorded a 22,2% increase in the financial expenses due to the inclusion of the right-of-use liabilities established by the IFRS16 standard. The expenses associated with Grupo Nutresa’s debt interests declined as a result of lower financing rates.
The operating profit stands at COP 506.388 million, growing 0,2%
in relation to the same period in 2018, and represents 5,1% of the consolidated sales. By excluding the IFRS16 effect, it amounts to COP 533.810 million, with a 5,6% growth and a net sales margin of 5,4%.
In the Statement of Financial Position, Grupo Nutresa reports assets for COP 15,6 trillion, with an increase of 15,7% when compared to 2018. This increase is mainly explained by the fact of right-of-use assets being recorded based on the IFRS16 standard, a greater generation of cash over the period, the capital gain from the acquisitions of Cameron’s Coffee and Atlantic Food Service, and the appreciation of our investments in Grupo Sura and Grupo Argos.
The total liabilities present a 34,1% increase, amounting to COP 7,0 trillion, mainly due to the fact of the right-of-use liabilities derived from the transition to the IFRS16 standard, and due to the debt associated with the aforementioned acquisitions.
The equity closed at COP 8,7 trillion, which represents an increase of 4,2% compared to the equity recorded in 2018.
In terms of cash flow, the Organization reports positive results with a free cash flow of COP 600.403 million, a free cash flow on sales indicator that stood at 6,0% and a 1,2-fold free cash flow on net profit.
Eating habits and well-being
Our commitment to nourishment drives us to be part of people’s day-to-day lives and to ensure the best price-value ratio.
Throughout 2019, we continued making progress in the path to fulfilling the objectives we have set for ourselves as an Organization in our MEGA 2020 (Great and Ambitious Goal for 2020). We are getting the benefits of the continuous investment in our brands over the years, with outstanding growth rates in 10 of the 14 zones of our strategic region, which represent 92% of the total sales.
The acceleration of our expansion into highly dynamic categories and channels enables us to harness growth rates higher than the market average, and our permanent search for operational excellence allows us to operate with increased agility, efficiency and competitiveness. Over the year, significant progress was made in multiple initiatives from our productivity agenda. The following are some examples:
- Our commitment to the comprehensive management of the expenditure was expedited, thus allowing us to reduce Grupo Nutresa’s selling expenses on revenue comparatively by 70 basic points.1.
- The utilization and efficiency of our production plants were increased through the cross-fertilization of products, thus boosting the growth of existing assets.
- Significant progress was made in our brand rationalization model throughout the strategic region with the aim of having a more potent and specialized brand portfolio.
- Our CapEx discipline culture was enhanced, achieving a CapEx/revenue indicator of 2,8%, where more than 30% of such investments
are focused on differentiated market entry capabilities that offer clear competitive advantages for the Organization.
All these actions were performed based on a responsible resource management framework, prioritizing investments that bring about competitive advantages for Grupo Nutresa and translate into better returns for our shareholders.
1 Con NIIF 16 la reducción es de 100 puntos básicos.
In compliance with the Colombian regulations, we report the individual results of Grupo Nutresa S.A.: we recorded a net operating income of COP 515.139 million, from which COP 453.646 million correspond to the profit from the equity method of our investments in food companies and COP 61.493 million correspond to dividends from the investment portfolio. Furthermore, the net profit totaled COP 513.898 million.
The strengthening of our innovation model “Imagix” was noteworthy throughout 2019. This model focuses on the management of four priority aspects: processes and resources, organizational culture, portfolio evolution and ecosystem management.
Over the year, Grupo Nutresa increased the rhythm of the innovations to exert a more agile response to the consumers’ needs, focusing its efforts on new products and categories, as well as on the strengthening of processes and business models that allow the Organization to succeed in the market. Additionally, we continued incorporating new capabilities to foster a culture with a greater adaptability and involvement, as we are convinced that human transformation is essential for having the flexibility and speed demanded by the new conditions.
- Innovation Initiatives: In the context of product innovation, it is worth highlighting the launch of the product portfolio under the new KIBO brand, which targets global consumers and is aligned with the trends of aware lifestyles and sustainable diets based on vegetable-origin ingredients. The Bénet brand continues venturing into new categories such as vitamins for kids, powder protein and nutritional bars, thus expanding its nutritious product proposal centered on people’s wellness.
Grupo Nutresa’s innovation-driven sales in 2019 represented 22,4% of its total sales, which is a result that exceeds, for the fourth consecutive year, the goal set at 15% for 2020.
In terms of market entry capabilities, we maintained our growth related to business models focused on the direct contact with consumers, and on the customization of the portfolio. In 2019, 16% of our sales were made through differentiated channels that reach consumers directly and represented 23% of Grupo Nutresa’s consolidated growth over the period.
- Relevant Projects:Throughout 2019, the Organization strengthened its share in the coffee category by acquiring Cameron’s Coffee, a company based in the United States, which is the country with the highest level of coffee consumption in the world. Additionally, the Company consolidated its leadership in the food service channel in Colombia with the acquisition of a majority interest in the company Atlantic Food Service.
Through Nutresa Ventures, a fund created for investing in entrepreneurship projects, we made two investments in companies focused on innovation and new technologies. The first investment was made in a company that specializes in developing biotechnology-based products with a high protein content; and the second investment was focused on the research and understanding of the human microbiome as a tool of knowledge for the development of customized products.
With these investments, we intend to incorporate and internalize cutting-edge knowledge for the development of new markets, products and categories with new capabilities in aspects related to health and nutrition, market entry capacity, productivity and sustainability.
- Digital Strategy: The transformation of the human being and the adequate adoption and application of new technologies are key elements in the implementation of a constantly evolving digital strategy.
Grupo Nutresa, being aware of its responsibility, further develops its nutritional portfolio strategies and its contribution to the adoption of healthy lifestyles.
Our digital strategy was designed to strengthen the development of new organizational capabilities, implementing and internalizing new technologies through a process of experimentation, application and adaptation.
All these actions are based on the fostering of an adaptive thought culture with methodologies, tools and new structures with the aim of facilitating an agile adaptation.
All the global economy sectors undergo major transformations and their products and, consequently, their business models evolve to meet the new needs of their customers, shoppers and consumers. For the food sector, the dynamics of change revolve around health, well-being and sustainability, which are aspects where the new knowledge poses considerable transformation challenges.
Grupo Nutresa, being aware of its responsibility as a transformational leader, further develops its nutritional portfolio strategies and its contribution to the adoption of healthy lifestyles.
Back in 2012, the Organization set itself to double its portfolio of products that meet the Nutresa nutritional profile by 2020. This goal was already fulfilled by 2013, so the Company decided to multiply said portfolio by 2,5. We are glad to report that the goal has been exceeded again one year in advance, as Grupo Nutresa currently has 3.216 product references that meet the Nutresa nutritional profile. Additionally, our commitment to the constant improvement of our products enables us to offer a meat product portfolio with lesser levels of nitrites and a product line free of added nitrites.
In the context of product innovations, we continue expanding our vegetable-based portfolio, nutritional supplements and products that contribute to people’s well-being and health, such as: Quinua Doria, Veggie Bites, Veggie Burgers, Kibo, Tosh Artesanal, and the nutritional food products and nutritional supplements of the Bénet product line.
The sustainability of the ecosystems is a priority for Grupo Nutresa and all its stakeholders. The effects of climate change, the pressure related to water resources, as well as the generation of waste throughout the value chain are essential issues that must be addressed to ensure the sustainability of our production processes and to foster the reduction of their impact on our planet.
Therefore, in 2019, the Organization continued steering its investment strategies and the transformation of its processes and business models toward the fulfillment of the commitments to the reduction in the consumption of water resources (-31,4%), energy resources (-22,7%), green- house gas emissions (-46,2%) and waste generation in all of our operations (-23,3%), all these reductions compared to the consumption in 2010.
In addition to these efforts for reducing the environmental impact, we have continued working on the identification of the risks in the sourcing of our main commodities in order to accelerate the most sustainable practices across the entire processed food chain. The Company enhanced its knowledge on palm oil sustainability according to the RSPO practices (Round table on sustainible palm oil), made progress in the diagnosis of sustainable livestock farming in Colombia, and prepared jointly with the WWF a handbook on the best practices with important contributions to the entire meat chain in Colombia.
In the path to a circular economy, we participated in important discussions of public policies related to the producer extended responsibility, and we accomplished the consolidation of a pilot plan for recovering, recycling and reusing packaging materials. This plan will be executed through an alliance with the National Business Association of Colombia (abbreviated ANDI in Spanish) with the aim of creating a collective method for closing the cycle of packaging materials with multiple agents from the value chain. Additionally, the Organization also participated in similar efforts led by the Pacific Alliance Business Council (abbreviated CEAP in Spanish).
Moreover, with the active involvement our employees and their families, we made progress in strengthening a culture of recovery and separation of flexible packaging materials. For this purpose, we implemented the circular economy initiative that we called “Ver de Vuelta” (Take them back), which was designed and operated jointly with specifically suitable allies in order to close the cycle of the post-consumption packaging waste by collecting and transforming flexible materials into school furniture elements.
Contributing to a prosper society by means of the development of capabilities focused on everyone’s progress and sustainability is one of Grupo Nutresa’s most important priorities.
In the context of human capital, we develop increasingly aware and upright leaders who have higher purposes for their potential while contributing to the consolidation of long-lasting businesses.
In 2019, the Organization invested COP 8.016 million in training programs, focusing on the development of digital, analytical, sustainability-related and innovation-driven capabilities. We incorporated adaptability as an enabling skill that will allow us to have flexible and motivated talent that is also open-minded to the permanent evolution of our setting.
In addition, the Company enhanced gender equality practices, which have enabled us to evolve toward becoming a diverse and inclusive.
In the dimension of food security, Grupo Nutresa has contributed to the food self-supply of urban and rural communities, and to the reduction in the loss and waste of food in our value chain. With regard to our customers and suppliers, we have supported their development and management in terms of local and global competitiveness in such a way our support contributes to their progress and to producing a positive impact on their quality of life and environment.
Grupo Nutresa invested COP 8,02 billion in training programs, focusing on the development of sustainability- related, innovation-driven and digital capabilities.
On these fronts, we have provided support with our own programs to more than 501 leaders, 887 contract auditors, around 1.059 suppliers and approximately 1.099 customers. The nourishment systems of low-income communities exchanged, consumed and sold more than 15.476 food servings, and the 19 food banks in Colombia prevented the destruction of 1.052 tons of food products and gained strength thanks to the support of Grupo Nutresa’s volunteer network. Through the implementation of inclusive business strategies, more than 2.110 small customers and suppliers developed social and business capabilities, improved their revenue and enhanced their community dynamics.
In addition, through Fundación Nutresa, the Organization contributes to a high-quality education that promotes healthy lifestyles and helps in addressing the global challenges.
- We facilitated the development of pedagogical, leadership and management capabilities among 1.134 academic directors and teachers from 378 public schools.
- Grupo Nutresa carried out activities focused on promoting healthy lifestyles, having a positive impact on 1.726 students in Colombia and 2.295 students in Mexico and Chile.
All of these internal and external social management actions were possible thanks to an investment of COP 197.043 million and the dedication of 11.475 volunteers. We are deeply committed to contributing to the construction of a social framework based on trustworthiness and respect and focused on fostering a productive dialog and social development.
The year 2020 marks the conclusion of the MEGA we set for ourselves as an organization in 2013, consisting of challenging objectives with the aim of being a company that consistently generates value for its stakeholders.
We will approach 2020 with a solid basis of installed capacities, and with hope, motivation and determination to fulfill the dreams we have devised for ourselves.
We will remain focused on offering the best products and experiences to our consumers with nutritious and convenient alternatives aligned with their needs.
We will advance toward the digitalization of processes and business models that enable us to be more competitive every day, and we will enhance our Organization’s culture with an increasingly humane, inclusive, transcending and inspiring leadership.
Our commitment with the goals still is our navigation chart, motivated by the purpose of producing a positive impact on society while managing the growth of our business and generating value for our stakeholders.
Our biggest aspiration as an organization is to promote sustainable development throughout the value chain, which is something that can only be achieved with support from a deeply aware and motivated team.
We would like to sincerely and profoundly thank our employees, who materialize their values and commitment in each one of their actions, thus building the collective talent force for which we are broadly recognized today.
Likewise, we would like to thank our suppliers, customers, shoppers and consumers, with whom we build relations based on collaboration and the generation of shared value on a daily basis; our appreciation to our shareholders, who place their trust in us and actively contribute to our vision of a development steered toward a better society.
Finally, we would like to acknowledge and thank those who preceded us as managers and guiders of Grupo Nutresa’s corporate strategy and who, with the support of their teams, have contributed to the construction of our first one hundred years.
Today, our vision is focused on generating progress and development for everyone, and for such purpose we work on the innovations that will make nourishment and nutrition the path to build a better future for the new generations.
Mauricio Reina Echeverri,
Chairman of the Board of Directors
David Emilio Bojanini García
Gonzalo Alberto Pérez Rojas
Jorge Mario Velásquez Jaramillo
María Clara Aristizábal Restrepo
Antonio Mario Celia Martínez-Aparicio
Jaime Alberto Palacio Botero
Cipriano López González
Carlos Ignacio Gallego Palacio,
CEO of Grupo Nutresa