GRI 102-10GRI 102-14GRI 102-54
In 2018, we continued to work with our corporate performance framework of Sustainable Development, installing processes and capabilities that, combined with the application of new technologies, will enable us to keep making progress towards our goal of increasing value over time.
Grupo Nutresa contributes to the development of humanity by acting consciously and transcendently, with the ultimate goal of being an Organization centered around people.
The opportunity to be part of the life of millions of consumers through the products and experiences we offer challenges and drives us to propose solutions that acknowledge and meet the needs and aspirations of our stakeholders.
Our Group is managed by a talented team based on a dynamic and sustainable business model, which relies on a portfolio of brands that generate value for the communities of our strategic region.
This year, we continued to strengthen our corporate pillars with a portfolio of leading and innovative brands, and we actively invested in the development of the distribution channels to make them more efficient and competitive. All of this was possible thanks to the work of an agile and motivated team that is deeply committed to the progress of our Organization. Additionally, we executed a disciplined transformation and productivity agenda that will allow us to be more competent when reaching our markets and in the interpretation and adaptation to a changing environment.
Our commitment to corporate sustainability allowed us to be included, for the eighth consecutive year, in the Dow Jones Sustainability Index –DJSI–, ranking second in the global food sector. We also continued to be part of the Dow Jones Sustainability Emerging Markets Indices and the MILA Pacific Alliance Index, and we received SAM’s Silver Award for the fifth consecutive year in its most recent Sustainability Yearbook.
To take on these challenges, we work on the generation of internal knowledge and capabilities that enable us to understand them and ensure their contribution to making us a better company. Likewise, we create and strengthen different alliances to manage them because the scale of these challenges demands the combination of multiple efforts in order to address them effectively.
We have built a culture focused on innovation and continuous improvement, particularly in terms of sustainability. We recognize the progress, but we are also aware of the required improvements. Therefore, we work consistently on identifying our gaps through a systemic benchmarking process, an adequate reading of our setting, the monitoring of both trends and risks, and active communication with our stakeholders in order to build plans and actions aligned with the future we envision.
Comprehensive and transparent accountability is an integral part of our value promise, which is why 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 (comprehensive option). This means that this report has been prepared according to globally accepted reporting guidelines, and it has also been developed based on our materiality matrix, considering the most relevant matters for the Organization and our Stakeholders.
We invite you to review in full the document and the supplementary information available on our website www.gruponutresa.com
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Health and nutrition
Through our health and nutrition strategy, we have already adjusted 3.072 products to the Nutresa nutritional profile, reaching 97,8% of our 2020 goal.
Our financial results are supported on the continuous improvement of our brands’ value proposition. We believe that strong brands with differentiated products and experiences translate into value for customers, shoppers and consumers, contribute to the leadership and preference of our portfolio and, consequently, to the profitable, increasing and sustainable growth of our Organization.
Over the term, Grupo Nutresa sustained a positive sales dynamic both locally and internationally, with COP 9,0 trillion in consolidated sales, which represents a 3,7% year-on-year growth. The sales in Colombia totaled COP 5,7 trillion, exhibiting a growth of 4,4% with regard to 2017, and representing 63,6% of Grupo Nutresa’s consolidated sales. The international sales, in Colombian pesos, were 2,5% higher than those recorded in 2017 and amounted to COP 3,3 trillion, which represents 36,4% of the total sales. In dollars, these revenues totaled USD 1.109 million, 2,3% higher than the previous year.
The gross profit for the period, which amounted to COP 4,0 trillion, grew by 5,4% when compared to 2017, reflecting the effect of the increase in sales, along with a productivity strategy and a more efficient procurement of commodities managed through a flexible and competitive global sourcing model.
The operating profit amounted to COP 849.296 million, with a 9,7% year-on-year increase. This growth was achieved through a cautious expenses management and by means of programs and efforts focused on improving the Organization’s profitability. In turn, Grupo Nutresa reports a consolidated ebitda of COP 1,13 trillion, with a sales margin of 12,5% and a 7,9% growth compared to 2017.
The net post-operative expenses, which amounted to COP 145.081 million, were 42,3% lower than in 2017. This reduction is mainly explained by the significant decrease in the financial expenses as a result from a good cash flow–which allowed us to cut down Grupo Nutresa’s debt– and by lower interest rates in the main markets where the Organization operates.
Finally, the Company reports a consolidated net profit of COP 505.308 million, a 20,3% growth based on the net profit recorded in 2017. This year’s combined net profit represents 5,6% of the consolidated sales.
In the Statement of Financial Position, we report assets that amount to COP 13,5 trillion, with a reduction of 5,5% in relation to 2017. This reduction is explained mainly by the lower market value of our investments over the term, which decreased along the same line of the lower dynamic of the local stock exchange.
In terms of liabilities, we report a 3,2% contraction, amounting to COP 5,2 trillion, mainly due to an 8% decline in Grupo Nutresa’s total debt over the year.
Total equity reached COP 8,3 trillion, which represents a decrease of 6,9% compared to the previous year.
In 2018, we advanced in an integral way towards our goals, delivering satisfactory results with a more agile, innovative and competitive Organization, and we consolidated an organizational productivity agenda that allows us to report a tangible improvement in the return on invested capital for our shareholders.
In compliance with the Colombian regulations, Grupo Nutresa S.A. reports its individual results: COP 515.387 million in operating revenues, from which COP 457.738 million correspond to the profit obtained through the equity method of our investments in food companies, and COP 57.649 million correspond to dividends from the investment portfolio. The net profit totaled COP 510.161 million.
Grupo Nutresa has been preparing itself to experience innovation through a culture that enables the design of dynamic business models that create profitable growth opportunities. Over the term, we worked on making adjustments to our Imagix innovation model in search for a higher degree of articulation in our processes, developing more capabilities among the employees, structuring more ambitious and innovative portfolios, and strengthening our culture at all levels of the Organization.
Our innovation is dynamic, it involves all the business areas and incorporates a digital strategy supported on eight concrete competences that enable us to manage incremental and radical innovation projects across processes, channels and businesses.
Furthermore, with the aim of proactively evolving with our environment and the multiple agents of the ecosystem, we have created Nutresa Ventures, a venture-driven fund aimed to search for external capabilities that provide agility, knowledge and differentiation in the long term.
Among the relevant projects, we highlight the expansion of the nuts and chocolate confectionery categories to Central America, the Caribbean and South America, as well as the expansion of our brand Bénet into vitamin capsules that focus on supplementing and improving the nutrition of our consumers. It is also important to report the acquisition of a majority interest in the company Productos Naturela, which produces and commercializes healthy and functional food products. This investment reinforces Grupo Nutresa’s presence in the healthy snacks market, a fast-growing category that is aligned with our purpose of expanding towards healthy and nutritional products.
The increase of chronic diseases in the population continues to raise concerns among communities and government institutions throughout the world. In this regard, the food sector has the opportunity to contribute with a response to said concerns by leading initiatives, and offering alternatives designed to improve people’s health.
This firm belief has led us to use research and effective innovation as tools for formulating solutions based on products and experiences that foster the adoption of healthy lifestyles and improve the quality of life of our consumers. Sello Rojo Vive, Pietrán without added nitrites, Veggie Burger and Veggie Bites, as well as Bénet vitamins and other food supplements, are some examples of new products that offer specialized and convenient nutritional alternatives with proven benefits for people’s health.
In addition, we continued to improve our portfolio and to make changes to specific nutrient contents with the aim of finding nutritional profiles that are more beneficial to our health.
With the management actions carried out in 2018, we consolidated a total of 3.072 products adjusted to the Nutresa nutritional profile, achieving 97,8% of the goal set for 2020. Moreover, progress was also made in the commitment of presenting detailed nutritional information on the front panel of our products, currently covering 86,4% of the product portfolio. We also continued self-regulating ourselves in terms of advertising targeted to children under 12, with an adjustment to 98,3% of our content based on social responsibility principles.
All these actions contribute to raising awareness in this regard, with the purpose of encouraging changes in people’s health and nutrition habits, and reaffirming our commitment to continue developing alternatives and leading actions and initiatives that promote people’s
Climate change, the loss of biodiversity and the accumulation of plastic in the oceans, are not problems unrelated to the food sector. As an organization, we are aware of the importance of carrying out our productive processes in harmony and balance with the environment, while generating value for our stakeholders.
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Grupo Nutresa focuses its management activities on nine SDGs, contributing to their achievement by means of the Organization’s strategic priorities in terms of sustainability and by working jointly with its stakeholders.
Therefore, we should highlight the work performed in 2018 regarding circular economy, the reduction of our water footprint and the environmental management across the supply chain. Along the same line, throughout the year we consolidated an interdisciplinary team that is in charge of the research and development of more sustainable packaging material alternatives, as well as the identification of and participation in multi-sector alliances focused on recovering and utilizing these materials.
Likewise, progress was made in the implementation of our Food Loss and Waste Reduction Policy, understanding our impact and enhancing internal capabilities focused on reducing food losses and waste, and making the best use out of them.
Over the year, we continued to identify the sustainability risks and trends regarding our main commodities, and we consolidated our water treatment systems, which are intended to reduce our overall water footprint.
The adoption of good environmental management practices was strengthened in the operations throughout our strategic region, achieving significant progress in our corporate goals for 2020 in terms of reduction in resource consumption and carbon emissions: water by 29,2%; energy by 20,4%; and CO2, emissions by 43,7%.
Humanity faces great challenges in terms of the planet’s sustainability and the construction of a thriving society. The countries where we operate require an inclusive high-quality education that facilitates the access to opportunities for everyone, with sufficient availability of qualified teachers and school training habits based on a sustainable philosophy, which promotes adequate nutrition and healthy lifestyles.
In the matter of the promotion of food security, the challenge in our strategic region is to encourage food production through methods that protect the ecosystem, adapt to climate change and help reducing food waste in the production and distribution chain.
We promoted entrepreneurship, productivity and sustainability in low-income populations from our value chain by means of the development of inclusive businesses and the organizational and productive strengthening of 455.597 clients and supplier associations.
Across the entire strategic region, we contributed to the reduction of undernutrition, the promotion of healthy lifestyles in the communities and the development of capabilities in the food banks. Along the same line, key practices related to healthy diets, hygiene and physical activity were reinforced in school communities in Colombia, Chile and Mexico. In terms of food security challenges, we promoted the self-supply of healthy food in urban and rural communities through our “Germinar” program.
A social investment of COP 70.972 million was made in 2018, benefiting 2.745.347 people and contributing to the construction of more sustainable territories with the support from 12.879 volunteers, who have joined this big network and put their capabilities and resources to use for achieving these results.
Moreover, the progress of our society also requires the development of our people’s talent, therefore this continues to be one of our priority goals as an Organization. In this regard in 2018, we materialized practices focused on strengthening the skills of our leaders, the talent planning and development of our employees, the monitoring of their commitment, and the organizational working climate. Grupo Nutresa also worked on reinforcing its performance management, improving employee productivity, and enhancing its organizational capabilities.
Additionally, Tresmontes Lucchetti was acknowledged by Chile’s “Sociedad de Fomento Fabril” (Manufacturing Promotion Society or Sofofa) with the 2018 Business Evolution Index Award, a recognition of its contribution to the construction of a climate of mutual trust with all agents of society.
In order to keep facing the implicit challenges of attracting and retaining the best talent, we will keep contributing to the development of our employees through training programs focused on personal development, effective innovation, sustainability, leadership, the enhancement of digital capabilities and analytics, among others. We are convinced that these initiatives contribute to the integral development of our people and to their commitment to the Organization’s higher purpose of building a better world where sustainable development is for everyone.
By the end of 2018, the Nutresa Business Group was formed by 71 companies, clustered as follows for administrative purposes: eight food Businesses and their production platforms in Colombia and abroad; an international distribution network; three local distribution companies; and four companies that render administrative, logistical and transport services, which provide the corresponding support to the Group’s companies.
In compliance with the provisions of the Colombian laws, particularly Article 29 of Act 222 of 1995, Grupo Nutresa S.A., as the parent company of the Business Group, received from its subordinates for the sales of goods and services the sum of COP 2.073 million, and the amount of COP 283.660 million as dividends. In 2018, Grupo Nutresa S. A. did not endorse financial obligations of its subordinates, which did not carry out operations for third parties by influence or in the interest of the parent company.
Moreover, in 2018, Grupo Nutresa S. A. did not make or stopped making decisions to address the interest or by influence of any of its subordinate companies, and none of them made or stopped making decisions to address the interest or by influence of Grupo Nutresa S. A.
Grupo Nutresa and its subordinates strictly complied with all intellectual property and copyright regulations, their trademarks are duly registered, and they all own the respective licenses of the software installed at all facilities and keep the corresponding evidence that allows to verify such compliance.
In 2018, the Organization did not receive any notices of lawsuits and there were no judicial rulings that could affect its financial condition. No fines or significant penalties were imposed on Grupo Nutresa’s companies or their executive managers.
Note 17 of Grupo Nutresa’s separate financial statements, which are published on our website, contains all the details of the operations with shareholders and the persons addressed in Article 47 of Act 222 of 1995 and other concordant regulations. All such operations were carried out under market conditions.
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As part of the I act with integrity (Actúo Íntegramente) strategy, we trained more than 16.000 employees, promoting an ethical, transparent and integral acting.
The Company declares that it did not hinder the free circulation of invoices issued by the Business Group’s vendors or suppliers. Additionally, the Company certifies that the financial statements and other relevant reports do not contain any flaws, inaccuracies or errors that would impede finding out the true equity situation of the Company, pursuant to the provisions of Article 46 from Act 964 of 2005.
Grupo Nutresa’s internal control system includes the necessary resources to guarantee the accuracy and reliability of the information required to plan, direct, control and measure the performance of its businesses, and to ensure an adequate disclosure of information to its shareholders, the market and the general public.
Comprehensive risk management processes, accountability systems, control plans and programs, budget and cost tools, chart of accounts, standardized policies and procedures, integrated information systems and templates for documenting and recording operations, and dashboards that allow the Administration to continuously monitor the processes are some of the internal control resources Grupo Nutresa uses.
The Internal Audit Department, through an independent and comprehensive assurance management work based on the international framework for the professional practice established by The Institute of Internal Auditors –IIA Global–, verifies the fulfillment of the Company’s goals and objectives in all processes and watches over the adequate protection, use and conservation of the assets. The Tax Auditor is responsible for verifying and certifying relevant aspects such as the Company’s compliance with legal, statutory and administrative standards, the reasonableness of its financial statements and the information disclosed therein.
The results of the Administration’s continuous monitoring activities and of the assessments carried out by the Internal Audit Department and by the Tax Auditor were disclosed in a timely manner to the corresponding authorities, including the Finance, Audit and Risks Committee. This disclosure allowed to confirm that the financial information disclosure and control systems of the Company and its Businesses are adequate.
These systems ensure the adequate and timely delivery of such information, which must be verifiable through accounting methods, as it refers to operations that due to their nature must be acknowledged and disclosed in the financial statements, or in accordance with the expectations, projections, cash flows or budgets in the case of business initiatives or projects. All of this must be done within the restrictions imposed by the law or by the confidentiality agreements related to the disclosure of this type of operations.
Based on the aforementioned activities, there were no significant deficiencies in the design and operation of the internal control measures that could have kept the Company from adequately recording, processing, summarizing and presenting the financial information of the corresponding term or cases of fraud with an effect on the quality of such information. There were no changes in the financial information assessment methodology either.
For Grupo Nutresa, 2018 was a year of consolidation and evolution. The Organization continued to build a better portfolio of products and experiences for clients, shoppers and consumers. We also implemented productivity improvements that enabled us to become a more competent organization and reaffirm our corporate values of integrity and transparency across all levels of the Company. At the same time, we evolved the way we operate, developing new channel alternatives with the aim of improving our dynamism and efficiency in the market, and we integrated new avenues of growth into our portfolio.
These new capabilities, in addition to those that we improve on a daily basis in the Organization, enable us to take on this new year with hope.
For this reason, 2019 will be a year for maintaining the execution of our strategy in a consistent and responsible way, managing bigger and better opportunities for growth, development, and value generation for the Organization and our stakeholders.
The results we report as a holding are possible thanks to a talented team that is deeply devoted and committed to fulfilling Grupo Nutresa’s goals. We would like to express our profound gratitude to our employees for their involvement in the construction of a better Organization, that is more human, conscious, and competitive.
We would also like to thank our suppliers for their solid and committed support; our clients, shoppers and consumers for their preference and trust in our work; and our shareholders for supporting our vision of building a future where sustainable development is for everyone.
Mauricio Reina Echeverri
Chairman of the Board of Directors
David Emilio Bojanini García
Gonzalo Alberto Pérez Rojas
María Clara Aristizábal Restrepo
Jaime Alberto Palacio Botero
Antonio Mario Celia Martínez-Aparicio
Cipriano López González
Carlos Ignacio Gallego Palacio
CEO of Grupo Nutresa