Annual Report 2022
Nature and location of business
The Group sells fresh fruit, berries, vegetables, potatoes, processed vegetable products, flowers and other products with a limited shelf life. BAMA aims to be a key opinion leader in the area of responsible green growth. The Group is headquartered in Oslo, and has divisions and subsidiaries throughout Norway. The Group also has business operations in Sweden, Finland, the Netherlands and Poland.
Market insight, development, research and innovation
BAMA is the Norwegian market leader within fruit and vegetables. We also have a strong European presence. Consumers across Europe are keen to adopt a healthy lifestyle. Nevertheless, people in Norway eat on average 3.0 of the recommended 5-a-day. In Sweden, that figure is 2.7, in Finland 3.2 and in the Netherlands 3.0. Norwegians do not get enough exercise and many have difficulty sleeping.
BAMA wishes to help consumers increase their intake of plant-based nutrition to secure a healthier and more eco-friendly lifestyle. We do so through a high rate of innovation, continuous improvements to ensure cost-effective operations, close ongoing collaboration with producers and suppliers in Norway and abroad, and inspiration and awareness-raising concepts such as the ‘Eat Move Sleep’ and ‘5-a-day’ campaigns, as well as partnerships with grassroots sporting associations and professional chefs in Norway.
BAMA has strong connections with planned Norwegian fruit and vegetable production and wishes to inspire Norwegian consumers to choose more Norwegian and locally produced food. BAMA works with innovative and skilled producers, as well as an increasing number of national and international research environments. Through a series of research and innovation projects, we will help bring new, tasty, attractive varieties and products to the market.
BAMA will continue to be a leader in developing and purchasing fresh, high-quality products in increasingly eco-smart packaging. In 2022, we set up BAMA’s sensory panel, comprising 12 people who have received education and training in performing sensory tests in order to ensure quality and define consumer preferences. We have also established a system for consumer-testing products. It consists of around 250 BAMA employees and their families.
BAMA is reliant on fostering good processes aimed at continuous improvements and greater efficiency. In our work on the Supply Chain core process, the focus is on objectives linked to lower costs, even fresher produce for customers and a reduction in our environmental footprint. These objectives are essential for maintaining and increasing our competitive strength. Our improvement work is underpinned by working methods based on data-driven decisions that attach importance to transparency and documentation. The Group bases its efforts in this area on a business plan for the period 2023 to 2025. It defines a management structure designed to ensure broad involvement and the effective implementation of measures across the supply chain.
Environmental and ethical reporting
BAMA takes responsibility along the entire supply chain, and is a driver for more sustainable development. We set sustainability standards for all our suppliers, both in Norway and abroad, and have a clear sustainability strategy for responsible green growth. With the Norwegian Transparency Act coming into force in 2022, we carried out risk assessments of countries and due diligence on the Group’s suppliers. We also started monitoring sustainability indicators for continuous improvements relating to environmental and social factors in the supply chain. BAMA is a member of Ethical Trading Initiative Norway (IEH) and produces an annual report on the company’s sustainable business practices based on IEH’s standards, in compliance with OECD guidelines and the provisions of the Transparency Act. The report is available at https://www.bama.no/om-bama/barekraft/apenhetsloven/
Climate change is increasing the risk of quality products becoming less available, both globally and locally. BAMA is therefore working with suppliers to diversify risk in order to meet, as far as possible, demand for the products we deliver in Norway and our other markets. We prioritise long-term agreements and good relationships with our producers across the globe and have found we have been prioritised whenever supply challenges arise in the market.
The Group impacts the external environment through transport, processing and packaging. We aim to use as little plastic as possible, but as much as necessary. Our most important environmental goal is to reduce food waste. So far, it has been reduced by 42 per cent, and we are on track to achieve our target of halving food waste by 2025.
BAMA Gruppen AS is a certified Eco-Lighthouse. Recertification takes place every three years and, at the reporting date, 75 per cent of our Norwegian units were so certified. We constantly strive to improve the efficiency of our transport and to reduce emissions of greenhouse gases, in part through better logistics and capacity utilisation, and switching transport to ships and trains whenever possible. Greenhouse gas emissions from transport were cut by 13.4 per cent in 2022.
Working environment and sickness absence
BAMA aims to be the most attractive employer within its own and comparable business sectors. We strive to achieve this by working systematically to provide a good working environment. Our annual staff survey confirms a high degree of job satisfaction among employees. BAMA has continued the ‘Eat Move Sleep’ programme, which also focuses on employee health and job satisfaction.
In 2022, the rate of sickness absence in the Norwegian part of the business totalled 7.2 per cent, compared with 6.2 per cent in 2021. In 2022, BAMA Gruppen AS’s total sickness absence rate closed at 5.3 per cent, compared with 4.9 per cent the previous year.
Four work-related injuries resulting in absences lasting longer employer’s statutory obligation for sick-pay (16 calendar days in Norway) occurred in 2022.
Equality and non-discrimination
The Group employed an average of 3,119 full-time equivalents in 2022, of whom 998 worked in foreign businesses. At the end of the year, BAMA Gruppen AS employed 479 permanent staff, of whom 134 are women. The Board comprises eight members, all of whom are men. Three members of the eight-strong executive management group are women.
The company has an overarching principle of promoting equality of opportunity irrespective of gender, ethnicity, sexual orientation, age, functional ability, religion or political affiliation.
BAMA Gruppen AS has a duty under the Norwegian Equality and Anti-Discrimination Act to issue a statement giving an account of the actual state of affairs with regard to gender equality in the undertaking and what the company is doing to fulfil its activity duty pursuant to the Act. The statement for the BAMA Group is included in the annual report.
Financial performance and position
After several years of positive development, 2022 was a more challenging year for the Group. Key issues impacting the Group’s financial result in 2022 included the unsuccessful implementation of an ERP system at one of the subsidiaries, followed by the outbreak of war in Ukraine, which adversely affected the economic outlook in Europe and led to higher prices for key input factors such as electricity and raw materials. In addition, the establishment of our new plant for freshly cut salad at Tranby in Lier proved slightly more challenging than anticipated. The changed market conditions gave rise to several initiatives to increase efficiency and speed in the supply chain. This included the establishment of the ‘Smart Supply’ project. In addition, individual restructuring projects were initiated in a number of units.
Consolidated sales revenue totalled NOK 21.5 billion in 2022. This represents a year-on-year increase of NOK 0.7 billion (3.3 per cent).
Consolidated net profit for the year totalled NOK 189.6 million, compared with NOK 409.4 million in 2021.
The parent company’s net profit for the year closed at NOK 251.4 million, compared with NOK 302.8 million in 2021.
The Group’s financial position is satisfactory. As at 31 December 2022, the Group had cash and cash equivalents of NOK 700.0 million. At the close of the year, total assets amounted to NOK 7.8 billion, up NOK 0.1 billion on 2021. As at 31 December 2022, the Group’s equity totalled NOK 2,071.7 million, which corresponds to an equity ratio of 26.5 per cent.
The parent company’s financial position is satisfactory. As at 31 December 2022, the parent company had cash and cash equivalents of NOK 420.0 million. At the end of the year, total assets amounted to NOK 3.3 billion, down NOK 0.4 billion on 2021. The parent company’s equity as at 31 December 2022 amounted to NOK 1,000.5 million, which corresponds to an equity ratio of 30.4 per cent.
The Group’s net cash flow from operating activities closed the year at NOK 229.8 million, compared with NOK 691.0 million in 2021. The reduction in the Group’s cash flow is largely due to a lower operating profit, together with an increase in the amount of tied-up capital and changes in other accruals and prepayments. Substantial investments were made in buildings during the year, which is reflected in a net negative cash flow from investing activities.
The parent company generated a net cash flow from operating activities of NOK -227.2 million, compared with NOK -185.5 million the previous year. Dividends and group contributions from subsidiaries are included in investing activities.
In the Board’s opinion the presented income statement and balance sheet and associated notes provide a true and fair view of the company’s and the Group’s operations and position at the close of the year.
Financial risk
BAMA Gruppen’s finance policy encompasses all group companies. This policy provides guidance on managing and limiting financial risk, and defines and establishes frameworks and guidelines for the finance function’s operation. The Group’s objectives include securing sufficient financial leeway to meet strategic and operating targets, and supporting operations by arranging efficient financing and liquidity both locally and centrally. The Group must endeavour to achieve a low risk profile within the framework of its finance policy.
The Group’s authorisation matrix seeks to reduce the likelihood of errors being made, while enabling its financial exposure to be closely monitored.
The Group is exposed to financial risk in the form of interest rate, foreign exchange and liquidity risk. BAMA Gruppen AS’s finance function is primarily organised as a central unit that handles the ongoing follow-up and management of the liquidity situation and financial risk. Interest rate risk primarily attaches to the NIBOR, EURIBOR and STIBOR money market interest rates, which essentially form the basis for the Group’s bank deposits and borrowings. The Group’s business operations are not deemed to be exposed to any interest rate risk. The Group is exposed to fluctuations in exchange rates, primarily in EUR, and hedges EUR exchange rates on an ongoing basis through forward purchases.
A vast number of transactions are processed at BAMA each day. Consequently, the finance policy addresses ongoing liquidity requirements through a targeted minimum level that also includes unused committed lines of credit. The Group’s activities continuously contribute liquidity, and the Group utilises a group account scheme to efficiently distribute that liquidity.
The risk of bad debts within the Group’s overall trade receivables portfolio is deemed to be low. The company continually assesses the credit of and monitors customers with unpaid overdue invoices. An in-house credit department follows up overdue payments, collaborating with an external debt collection company where necessary. In recent years, bad debts have been low in relation to the Group’s sales. The Board deems the Group’s liquidity to be satisfactory.
The Group has taken out directors and officers (D&O) insurance, which also covers senior employees. The policy covers the personal liability that the insured may incur as a result of negligence in the performance of their duties in respect of the company.
Going concern
The annual financial statements for 2022 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice. The Board confirms that the company fulfils all the prerequisites necessary to continue as a going concern.
Net profit and allocation of profit for the year
BAMA Gruppen AS made a net profit for the year of NOK 251.4 million. The Board proposes the allocation of NOK 114 million to dividend, while the remaining NOK 137.4 million is transferred to other equity. After these transactions, the company had total equity of NOK 1,000.5 million, corresponding to an equity ratio of 30.4 per cent, as at 31 December 2022.
