Cloetta possesses some of the strongest consumer brands on the confectionery market. Virtually every consumer in the Nordic countries, the Netherlands or Italy recognises or has tried several of our products, many of which have a history dating back to the first half of the 20th century, or even before that. Kexchoklad, Malaco, Läkerol, Ahlgrens bilar, Jenkki, Sperlari and Sportlife, to name but a few, are all as appreciated as they are well-known brands on their markets. The new Cloetta has this strong and broad-based brand portfolio as its foundation.
As a consequence of the recently completed merger between Cloetta and LEAF, we can offer a complete product portfolio and stronger commercial organisation, primarily in the Nordic countries. With the merger, we also became a more attractive partner for customers and suppliers. Our product range includes sugar confectionery, chocolate, pastilles and chewing gum. This means that we are a leader on the Nordic confectionery market with leading positions in Italy and the Netherlands.
Going forward, we intend to develop Cloetta to become even stronger, more effective and more profitable.
First, we will focus on volume growth and margin expansion. We have to continue to focus on our strong local brands. After the merger with LEAF, Cloetta has a much stronger position in the Nordic markets, which creates opportunities for growth. For example, we now have an opportunity to sell Cloetta’s chocolate products via the strong distribution organisations that LEAF have on the other markets. To ensure the profitability, we also have to focus on pricing to compensate for increased raw materials costs. Acquisitions are not on our agenda in the short term, but in the longer term, we will naturally evaluate acquisition opportunities.
Second, Cloetta will focus on costefficiency. The merger between Cloetta and LEAF creates synergies in our commercial and administrative organisations, primarily in Sweden. After the merger, Cloetta has virtually all the relevant production technologies in-house, which creates opportunities for in-sourcing subcontracted manufacturing. This also enables more flexibility in product development and the potential for continued improvements in efficiency of our procurement, logistics and production chain. Significant rationalisation potential in production is, not least, evident in our recently presented analysis, which indicates that we can achieve yearly savings of approximately SEK 100 million on EBITDA-level with gradual effect in 2013 and with full effect sometime during the second half of 2014 by closing the factories in Gävle, Aura and Alingsås, as well as streamlining the warehouse network.
Third, we will focus on employee development. We aim to attract, develop and retain competent people in order to be successful in the intense competitive talent market. Cloetta will become an even more attractive employer for talented people in marketing and sales. We will learn from each other and jointly shape a corporate culture in order to become a winning organisation.
With our strategic foundation, we will in the long term be able to grow sales organically in at least at the same rate as the overall market, achieving an recurring EBITA margin of at least 14 per cent. With our solid profitability and strong cash flow generation, we will reach our goal of approximately 2.5 x net debt/EBITDA. Once the leverage target is attained, there is an ambition to distribute 40–60 per cent of net profit as a dividend to our shareholders.
Cloetta is a stable, strong and profitable company. We have wellknown and loved brands, and operate on a relatively stable market. Therefore, I feel confident when expressing my belief that an investment in Cloetta is also an investment in the future.
President and CEO