Strong Growth in All Divisions of Fazer, Fazer Confectionery Returns to the Group Business

03/12/08 The business of Fazer Group expands with the traditional confectionery production as Fazer Confectionery once again becomes part of the Group after the demerge of Cloetta Fazer. The Group's result has improved significantly during year 2008 due to growth and improved efficiency and renewals. The valued quality brands of Fazer Confectionery further strengthen Fazer's positions in the home market.

The turnover of Fazer Group in 2008 has grown by 13.4 per cent compared to the same period (1 Jan – 31 Oct) the previous year. Also, the Group's result has significantly improved despite the challenging market situation. The strong result development is a result of significant growth, renewals and strengthened operations. The strongest growth areas in the Group's result during this year have been food services in Finland and bakery operations in Finland and Russia.

Fazer intends to continue growing strongly in the years to come. Growth targets are to be met, apart from organic growth and acquisitions, by means of improved efficiency and investing in new business opportunities and concepts. One example of this is the important acquisition made in October when Fazer bought the Swedish bakery company Lantmännen Färskbröd. Through this investment, Fazer becomes second-largest in the Swedish bakery market.

‘In the future, we will concentrate more efforts on utilising our consumer brands across divisions and product groups. We want to be near our customers and consumers, and to be able to quickly respond to their wishes. We stand out from the competition with our first-class quality, strong brands and unique products and services. The confectionery business with its attractive brands strengthens Fazer's brand portfolio further’, says Group President Karsten Slotte.

Fazer Confectionery invests in the Swedish market

Fazer Confectionery is the market leader in Finland with a market share of 42 per cent, in Sweden its market share is 7 per cent. The pro forma net turnover of Fazer Confectionery in 2007 was c 257 M€. One of the main goals of Fazer Confectionery is to significantly increase its market share in Sweden. Fazer Confectionery is a strong player in the Baltic region. Important market areas of the company are the Baltic states, Russia, Norway and Denmark. Another important trade channel is the Travel Trade, i.e. sales in passenger ferries and air traffic.

‘We have succeeded in strengthening our major brands and developing novelties to the liking of consumers. Our newest field is chewing gum. Fazer Confectionery is the only manufacturer whose chewing gums are all sweetened with xylitol alone. Our chewing gums are produced in Finland's only chewing gum factory in Karkkila. In the beginning of next year, we will introduce the well-known Fazer brands into chewing gums, too. Our goal is to grow in our biggest markets and to strengthen our lead in the Finnish market by concentrating our efforts on brands and product development. 'The most important sales period of the year, Christmas, has started very well', says future managing director of Fazer Confectionery Jesper Åberg.

The global economic recession and challenges in the operating environment - such as fluctuation in raw material prices, pay raises and cost pressures – will test Fazer Group in the coming year. Economic insecurity affects also the consumers' behaviour and choices. ‘However, Fazer operates in a field which has to do with people's everyday life – taste sensations – which we create in all market situations’, says Karsten Slotte.

Consumers are more and more interested in the origin of food and raw materials and in how products and services have been produced. Among consumers, responsible operations and production are becoming an important selection criteria of products and services.

‘Responsible and local operations are one of Fazer's strategic focuses. For example, all Fazer's bakeries in Finland, Sweden and the Baltic states have common goals and measurements for sustainable development. We especially focus on rationalising the use of energy and diminishing the amount of waste’, says Slotte.