SPADEL SA Annual report 2023
Profile | Message | Spadel in 2023 | Markets & brands | Sustainability | Management report | Governance | Financial report |
Contents
3 Profile
6 Message from the Chairman and the CEO
11
13
15
16
24
28
29 New segments and even more sustainable propositions
33 Progress CSR report of our company for 2023
43
46
53
65
103
107
117
Human Resources
Management report
Corporate Governance statement
Financial report
Statutory auditor's report
GRI table and taxonomy
Contacts
Spadel - Annual report 2023 - 2
Profile | Message | Spadel in 2023 | Markets & brands | Sustainability | Management report | Governance | Financial report |
This is Spadel
Positioning of the spadel group
Spadel is a European family group that produces and markets brands of natural mineral water, spring water and refreshing drinks based on natural mineral water: SPA and Bru in the BeNeLux, Devin in Bulgaria, Wattwiller and Carola in France. Spadel
is a sustainable multi-local company characterised by the regional anchorage of its brands, its leadership on a human scale in its field of natural drinks, its respect for the area in which its springs are found and the naturalness of its waters, and its efforts to keep its ecological footprint
as small as possible. A vision that makes more and more sense today, in a world concerned about its ecological impact.
Spadel sees innovation as a key axis and
a springboard for growth. This presupposes the development of new drinks that are natural, healthy and low in calories, providing a direct response to what consumers want. Every year, the group prides itself on proposing new products for one or other
of its brands, renowned for their quality. However, it also innovates with regard to its firm commitments to reduce the waste and C02 emissions generated by its activities (packaging, transport, etc.).
These strategic choices in the field of innovation, combined with a regional approach at European level backed up by a visible presence in five countries (Belgium, the Netherlands, Luxembourg, France and Bulgaria) enable the group to stand out from its competitors.
A sizeable challenge,
multiple firm commitments
In an international group made up of brands securely anchored in their regions, it is important that everyone is moving
in the same direction, regardless of the country, the site and the department. Hence the importance of knowing what Spadel represents, having a clear understanding of its vision of the world and the way in which its entities work with one another. But it is also essential to understand the challenges it faces, which develop in line with the concerns that preoccupy the world.
NATURAL SINGE 1583
Spadel - Annual report 2023 - 3
Profile | Message | Spadel in 2023 | Markets & brands | Sustainability | Management report | Governance | Financial report |
One purpose
At the end of 2022, the Spadel group specified and reinforced its purpose aiming for sustainable development:
'We connect People and Nature for a healthier life, today and tomorrow'.
Our mission is clear: Spadel wants to offer 100% natural and local products, which - thanks to their mineral resources - hydrate and refresh our customers, and help to make our world more sustainable.
To offer natural and local products that contribute towards improving the health of consumers and making the world more sustainable, while ensuring constant and profitable growth for the group and
a position as undisputed regional leader in the water-based products market.
Four values driving our avtivity
In 2023, Spadel shared its redefined values which are driving its activities.
Create positive impact
We listen to and engage with our stakeholders
We take care of our colleagues and help them grow and thrive
We act for a better environment and society
We propose qualitative natural products to contribute to a healthier life
Be agile and decisive
We decide (to achieve our objectives)
We move fast with foresight
We are flexible and reconsider in due time
We sometimes fail but always learn
Go beyond expectations
We set high and inspiring standards
We go the extra mile
We continuously improve
We recommend new solutions and innovative ideas
Move as one team
We trust and respect each other
We connect and make progress together
We speak with one voice
We have fun and celebrate our successes
Spadel - Annual report 2023 - 4
Profile | Message | Spadel in 2023 | Markets & brands | Sustainability | Management report | Governance | Financial report |
Three strategic pillars
To guide the company and its people in their choices, Spadel has built a strategic plan on three pillars:
Expertise
Our activity covers a wide variety
of professions, from the most versatile
to the most technical. Extraction, logistics, and marketing our bottled products all call on a wide range of talents.
Our working methods also aim for operational excellence.
Innovation
Innovation is for us a key axis and a springboard towards growth.
This presupposes the development of new natural, healthy and low-calorie drinks in direct response to what consumers demand. Innovation is also found in
our firm commitments to reduce waste and CO2 emissions from our activities (packaging, transport, etc).
Sustainable development
A perfectly circular packaging strategy which contributes to environmental protection and human health - that's the vision set out in Spadel's new sustainable packaging strategy for 2025. We are fully aware of the impact of bottled water packaging on the environment, and
we want to lead the way to a positive future.
In the context of its CSR strategy Source of Change, based on 4 pillars, Spadel has set up a unique platform detailing all its ambitions and actions so as to contribute to protect natural resources and become a company having a positive impact.
A purpose in action
As a positive impact company, Spadel endeavers to further increase the protection of the biodiversity and the water resources, to use but natural ingredients, and to reach packaging circularity by 2025.
Spadel - Annual report 2023 - 5
AB CORPcertified company: a positive impact company
Our desire for a more sustainable world is illustrated by our practical and measurable actions towards environmental protection: reduction of our carbon footprint, emphasis on packaging recycling, protection of biodiversity, establishment of catchment protection perimeters, the first carbon neutral mineral group in Europe for the entire life cycle of its products, and security guarantees for employees and local stakeholders.
As a B Corp certified company, we're transparently sharing our choices and our actions. For example, we want to accelerate our transition to a circular economy, and to promote the recycling cycle of plastic packaging. And we stimulate sustainable innovation and talented entrepreneurs that improve the customer experience and provide added value in our sector.
BIODIVERSITY
POSITIVE
SECURITY AND | CONSTANTLY |
WELL-BEING | STRIVING FOR |
CARBON | |
FOR OUR PEOPLE | |
NEUTRALITY | |
Positive
impact
company
FOLLOWING THE | ||
HIGHEST STANDARDS | CERTIFICATION | |
OF RESPONSIBLE | ||
WATER | B CORP | |
STEWARDSHIP | ||
RECYCLING | ||
OF PLASTIC | ||
PACKAGING |
Profile | Message | Spadel in 2023 | Markets & brands | Sustainability | Management report | Governance | Financial report |
- win-winrelation in 2023
What do you think is the most notable achievement of 2023?
Roel Van Neerbos: Spadel's performance is to have gained market share wherever it is active, both in volume and value, while restoring its profitability. Typically, a business focuses on one or the other of these two goals. However, and this is what is remarkable in my eyes, Spadel has succeeded on both fronts.
Marc du Bois: The year ended on a very good note, to which all the company's departments and all of its employees contributed, in each of the countries where Spadel is active. We sold… 982 million liters. A historical volume. We're getting closer to a billion! This made it possible to achieve strong double-digit growth.
2023, indeed, comes after three complicated years: the Covid-years 2020 and 2021 and, when we thought we were out of the rut, the inflationary year 2022, which saw our budgetary process shattered and our financial results fall below our expectations.
The increase in inflation from the spring of 2022, reaching a peak in the fall, had disrupted that year: for the first time in its history, Spadel had to place a second price increase, the first being insufficient to cover the explosion in the price of raw materials. Inflation also disrupted our programming for 2023. However, this year 2023, which we expected to be complicated, was positive.
Unexpected, you say. For what ?
MdB: Because the 2023 season was a bit chaotic in terms of weather. What we gained in June, an exceptional month, and lost in gloomy July and August, was recovered in
September, phenomenal, or even exceeded in October. Which leads me to say that in our profession, the season now begins in May and ends at the end of September, if not mid-October, whereas, historically, it focused on June, July, and August.
But what was even more unexpected was that the catch-up took place on several levels. We have achieved great commercial success, gaining market share everywhere. Without losing the credibility of our customers, because our price increases were of a moderate level. There was therefore no tension, no boycott, and very little out-of-stock levels. On the contrary, we have been able to serve our customers, sometimes beyond what was initially planned. It was a gamble that we took and succeeded.
Does this observation of growth apply to the four markets where Spadel operates?
MdB: In Bulgaria, the market continued to grow in 2023. On the other hand, the BeNeLux and France showed signs of decline, or even declined slightly (from -3 to -4%, to -10 to -11 % in the Netherlands), driven among other things by the pressure on consumers' purchasing power. Whether it is real or hyped.
The consumer has opted for three choices: abandon the bottled water category; move towards distributor or first-price brands; or choose the region's reference brand. This is one of the main lessons of 2023: with private labels, we are the two winners of 2023.
The way Spadel was able to turn around 2023 is amazing.
Its resilience is remarkable and worthy the respect. Respect for both the company and its employees.
MARC DU BOIS
CEO - Spadel Group
982 million
LITERS SOLD IN 2023.
A HISTORICAL RECORD.
MARC DU BOIS | Spadel - Annual report 2023 - 6 |
CEO - SPADEL GROUP | |
Profile
Message | Spadel in 2023 | Markets & brands | Sustainability | Management report | Governance | Financial report |
ROEL VAN NEERBOS
CHAIRMAN SPADEL GROUP
Distributors, certainly those present in Belgium, are worried about the growth in cross-border purchases. Knowing that mineral water is precisely one of the products most sought after by Belgian consumers in France, the subject should concern Spadel. Is that the case ?
MdB: Cross-border traffic obviously concerns us, even though it concerns Belgium more, where half of the population lives less
than 50 kilometers from a border, than our other markets. We've been talking about it for 15 years. And we are neither listened to nor heard. Without these cross-border purchases, Spadel's balance sheet would clearly be better, with its corollaries in terms of jobs, taxes, etc.
Has the pressure on purchasing
power amplified these cross-
border purchases? And could we think that, in the wake of a drop in inflation, they would decrease?
MdB: I would say that this flight towards adjacent markets has increased with the pressure on purchasing power. But this is not the only reason. I think that now, for part of the population, cross-border purchasing has become part of consumption habits, is part of a behavior. Which is more insidious.
And let's not kid ourselves, behind these cross-border purchases, it is above all a tax rage that is hidden: value added tax, tax on deposits, tax on wild waste... Which makes the same bottle of water is more expensive here than there. This without prejudging what the elections of June and October 2024 will bring which will fuel - or not - the vicious circle.
And that's really a shame. Because it is not only a Belgian consumer who does not buy in Belgium, it is a Belgian taxpayer who buys abroad.
In the analysis of your results, you do not seem to mention any cost reduction…
MdB: It's understood. We naturally worked a lot on costs and on streamlining the company. We scrutinized each market, each brand and decided on a certain number of references. We looked at the efficiency of the Spadel organization in the broad sense: the factories, the teams... We revisited the commercial budgets - promotions, communication - in order to see if it was not possible to do better with less. And we reduced the size of the head office offices by half by implementing another configuration. With success since employees return to the office. Contacts are more informal, ideas flow between members of different departments... This promotes innovation, which is far from trivial in the growth
of the brands and the group.
What are the innovations to be credited to 2023?
MdB: In 2022, we successfully launched
the 5-liters SPA Reine Eco Pack: practical, ecological, easy to transport and store. In 2023, we moved up a gear with a 10-liters Eco Pack from SPA Reine, but also a 5-liters Eco Pack from Wattwiller. What is interesting to remember, apart from the fact that they represented a volume of 16 million additional liters, is that 30% of the volumes come from consumers who, for whatever reason, had abandoned the category of bottled water.
A beneficial observation for the category, for Spadel, but also for its distributor clients who generate turnover that they had lost.
There is not one, but two words, depending on whether we consider the year from an internal or eternal point of view. The first is 'relaunch' because, after Covid in 2021 and 2022, after galoping inflation and rising costs in 2022, Spadel regained its
financial health in 2023.
The second word is
'winning'. Compared
to its competitors, Spadel made its mark in the different markets in 2023.
ROEL VAN NEERBOS
CHAIRMAN SPADEL GROUP
Spadel - Annual report 2023 - 7
Profile | Message | Spadel in 2023 | Markets & brands | Sustainability | Management report | Governance | Financial report |
Apart from our own innovations, we work also on other ones, driven by our partnerships via our investment fund The Source, which supports start-ups and as such explores new market segments which have not been part of our mission.
MARC DU BOIS
CEO - SPADEL GROUP
30 %
OF THE ECO PACK VOLUMES COMES FROM CONSUMERS WHO HAD ABANDONED THE BOTTLED WATER CATEGORY.
Tomorrow, I see these Eco Packs opening up new outlets: in gas stations' convenience stores, in camping, sailing or sports equipment stores, in garden centers. Places where we don't expect to see ourselves, to which this packaging of the future will open the doors.
RvN: I think it is in innovation, in particular, that we will stand out in the coming months. The launch of several new products will be crucial, which are all strategic projects.
What are they ?
RvN: The first will allow us to bring hydration into companies and to independent workers, into workplaces and waiting rooms. Its name: SPA Fountain. Or a dispenser housing 4 10-liters Eco Packs, one in use, 3 in reserve. Enough to compete with existing players with another quality of water since it is natural mineral water. The initiative is large-scale and in line with our values, and is of great importance in terms of sustainability.
The other project is a revolution for Spadel as it stands out from our usual waters and lemonades. It is in fact focused on the launch of an energy drink, but natural, with plant extracts, without added sugar, which fits perfectly with the company's purpose. A way to completely differentiate ourselves from current players in this market category. Called Zyla - the syllabic anagram of lazy (lazy in English) - it will be available in 3 versions depending on the expected energy boost: light, medium and strong and has been launched in March 2024 in Belgium.
MdB: But we are also working on other innovations, driven in particular by our partnerships carried out via our investment fund The Source, which aims to invest in start-ups and as such explores new market segments which have not been part of our mission.
Whose achievements could come out in 2024?
In any case, that's the goal. In the three years that the fund has existed, it has invested in four start-ups.
Andy, in 2021, specialized in home delivery of drinks and emptying services, which unfortunately went bankrupt last year. But that's the game, and a risk to take for a fund like The Source.
Qallo, in 2023, which produces energizing powders to be diluted in water. The opportunity for us to understand the world of drinks to be diluted, on the one hand, and energizing on the other. With the fact that these are individual doses, which can easily be added to the water offered in bulk.
Also in 2023, we made an investment in Dripl which offers consumers the opportunity to make their own drink by adding flavorings. What interests us in this participation, which seems to be a little extreme since connected to tap water, is to understand the vending market (automatic distribution), since Dripl often replaces automatic dispensers, but also that of do -it-yourself. With this, the start-up also has great expertise in the machine that distills aromas.
Finally, there is The Mocktail Club, an Antwerp company in which The Source also entered last year, very advanced since its products are already listed at Colruyt and soon at Delhaize. Non-alcoholic, natural drinks that replace an aperitif. A market with a bright future.
But even if these start-ups do not last, which I very much doubt, they will, in any case, have stimulated Spadel with their entrepreneurial spirit, their liveliness, their desire to move forward. A way to recharge your batteries.
Spadel has focused extensively in recent years on health and sustainability. But we hear less about global warming.
MdB: If we hear it less, it's because we're not listening to it well (smile). It is not Spadel who is going to deny the problem of climate change, quite the opposite.
Whatever we think, we are not happy about the frequency of heatwave years. Because that would reduce the company's model, its great professional mastery, to the weather alone - which has always irritated me.
But above all, because this type of peak is matched by other extremes - droughts, excessive rain, floods, lack of snow - which impact the soil and the water tables. Shallow aquifers suffer as much from drought and soil warming as from the turbulence of heavy or torrential rains. Which is fortunately not the case with ours: it takes 5 to 50 years, depending on the sources, for rainwater to reach the water tables of SPA, and 60 years for those of Bru. We are nevertheless being extra careful in monitoring water recharge: we respect the catchment routes, we draw without exhausting. We have, based on our growth model and over a five to ten year horizon, no problem with water availability. However, we want to prepare for the future. We have, therefore, in Belgium as well as
in France and Bulgaria, relaunched drilling campaigns. We are convinced that water will become a rare and expensive resource, and we want to be sure not to run out of it. This means that there is not only reason to find it, but also to save it. Currently, some of our plants operate at a ratio of 1.2 to 1.3 liters of water pumped per 1 liter bottled, while other sites hover around 1.5 liters per liter bottled. But we are working towards a ratio of 1.2 to 1.3 liters.
Spadel - Annual report 2023 - 8
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Two new directors joined the board last year, Louis-Guy du Bois and Mieke Van de Cappelle. With what impetus for Spadel?
RvN: A few years ago, we began to welcome the new generation of the du Bois family
to the Board of Directors with the arrival of Barbara, Marc's daughter. Trained at L'Oréal for almost eight years, her experience in a multinational consumer goods company was invaluable to us. Last year, she decided to join the ranks of the company and is currently leading the Zyla project, for which she is doing a fantastic job. His vacant seat at the council table was occupied in May 2023 by his brother, Louis-Guy du Bois. His profile is more entrepreneurial and perfectly complements the panel of personalities on the Board.
As for Mieke Van de Cappelle, she replaces Jean Vandemoortele who decided to pursue other activities after 15 years with us. Mieke is Director of Human Resources at DSM-Firmenich, a large company listed on the stock exchange in Switzerland and the Netherlands. We aspired to have a more HR and sustainability perspective within the Board of Directors, to better attract talent but also to be able to face the complex challenge of artificial intelligence.
Thanks to these two newcomers, the Board of Directors is balanced and strengthened. This is the strongest board I have served on for Spadel and I am very happy with it.
How do you see Spadel by the end of 2024?
RvN: I am an optimistic person by nature and I am confident about the positive results that we will draw from the current year which promises to be very interesting. The foundations of the company were strengthened in 2023 and are now solid.
2024 will be a year of accelerated growth for Spadel. And this, especially since the year started on a much better footing than what we had imagined last year. Spadel is fortunate to bring together motivated and invested employees, with crazy energy, who have worked to exceed our expectations in 2023. I am very proud of what they have accomplished. They are truly the ones who made the difference.
That said, I must add that 2024 is not without its share of challenges for the company. War still rages in Ukraine and the Middle East; while important elections are coming, in the United States and elsewhere in the world. In Belgium, in particular.
The outcome of these elections is likely to destabilize the political and macroeconomic environment in which Spadel operates. It is impossible to predict what awaits us, nor to control it. We will have to suffer the consequences, as with other crises we have gone through in the past.
Bottling without exhausting.
MARC DU BOIS
CEO - SPADEL GROUP
1.2 to 1.3 liters
OF WATER PUMPED FOR 1 LITER BOTTLED.
Spadel - Annual report 2023 - 9
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MdB: I immediately see three challenges for 2024.
The first challenge is to anticipate. The Belgian market ended 2023 in slight decline (-3%) and I think it will remain so because the pressure - dare I add psychological - on purchasing power is still being felt. I don't see a big change in consumer attitudes despite the automatic indexation of salaries. In France, it should be the same as the behavior of the two markets is similar. In the Netherlands, the market will regain color - it was -10% in 2023 - thanks to the decision of the Dutch government to almost triple excise duties on lemonades but to completely eliminate those on water, which will make
it less expensive. Will there be an effect on demand? Without a doubt. How big? I don't know how to say it. As for our latest market, Bulgaria, I have no worries: it has grown impressively and will continue to grow.
Our second challenge is to successfully launch the two projects: SPA Fountain and the Zyla energy drink. The public response must be there. For one, because SPA is the Group's flagship brand. For the other, because it is the first time that we have committed to a name and recipes created from scratch, without any connection with the water from one of our extraction sites.
The third and final challenge, perhaps the most unusual given that our last acquisition, that of Devin in Bulgaria, dates from 2017: establishing a foothold in a new market. At the very least, let's see if we can do it.
Our biggest and most unusual challenge for 2024: gain a foothold in a new market.
At the very least, let's see
if we are capable to enter new segments.
MARC DU BOIS
CEO - SPADEL GROUP
Spadel - Annual report 2023 - 10
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Spadel NV published this content on 21 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 May 2024 02:28:16 UTC.
