The Lambertz Group generated growth of 3.0 percent in fiscal 2010/2011 (July 1, 2010 to June 30, 2011), realising revenues of 552.4 million euros. According to data provided by GfK and Nielsen, the overall baked goods market of relevance declined over the same period, repeating the pattern of the previous year.
Unlike in the prior-year period, the entire 2010 Christmas season was characterised by ideal weather for the autumn range of baked products made by the Lambertz Group. As a result, sales increased by 4.2 percent, more than offsetting the small decrease in revenues encountered in the 2009 season.
The increase with respect to our year-round articles was 2.3 percent. Sales growth in Germany was moderate; a major proportion of the revenue rise thus occurred outside Germany, primarily in the USA.
In the view of the Lambertz management, there is also a discernible shift in global growth towards the former developing economies and emerging markets.
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Our classic autumn wares saw sales rise by 4.2 percent. The total market share of the Lambertz Group is 25 percent, excluding private labels. According to GfK, 7 percent more consumers purchased the Lambertz brand than in 2009. The increase versus 2009 in the case of Kinkartz was an even more impressive 12 percent. No-name and private label brands once again lost consumer volume – as was the case in the previous year.
Lambertz is convinced that not only the brand-name share but also total sales in the seasonal baked goods sector could be further expanded – particularly during the autumn and Christmas period – if our retail partners were to order more traditional brands such as Lambertz, Kinkartz, Weiss and Haeberlein-Metzger in place of private labels.
"No-name and private labels are effective as year-round articles but not as products that are only made available during the 8 to 10 weeks of the Christmas season in the retail grocery shelves or at the point of sale." (Ralf Fritzsche – Director of Sales)
"If private labels erode the soul or culture of a brand, this costs our retail partners in terms of both sales and profitability." (Ralf Fritzsche – Sales Director)
Weiss has remained the market leader in the "Lebkuchen" (coated gingerbread) segment. The major products in the form of hearts, stars and pretzels, "Oblaten" and "Elisen" (the wafer-based and almond-based versions) and also "Früchtebrot" and "Magenbrot" (fruit loaf and uncoated gingerbread) have an almost 100 percent distribution in the market. Sales here increased by 3.3 percent, from 85.5 million euros to 88.3 million euros.
Haeberlein-Metzger saw revenues rise by 4 percent to 20.8 million euros. This, the oldest brand in the Lebkuchen range sold by the Lambertz Group, is still held in particularly high esteem, generating extra consumer appeal with its special ingredients and decorative packaging. The greatest increase in revenues generated in the Lebkuchen segment was attributable to the Elisen range in 2010. This one-time south German speciality is now appreciated by consumers throughout the country, achieving particular distribution successes in western and northern Germany, not least thanks to the long-established public awareness of the Haeberlein-Metzger brand.
Kinkartz increased revenues by 3.7 percent to 35.8 million euros, the company generating above-average increases with its "Dominosteine" range ("Domino blocks" – a type of layered petit-four).
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Despite the baked goods, cakes and tartlets market still declining, the Lambertz Group was able to increase sales in its year-round products by 2.3 percent. The rise in revenues occurred almost exclusively outside Europe. Through the expansion of distribution channels in the USA, we were able to increase sales volume by almost 30 percent. We succeeded in getting listed with a number of renowned American retail chains. In China, Lambertz expanded by a third, and in the growing Australian market, revenue increased by 24 percent.
Outside Germany, the USA has now become Lambertz's strongest market, followed by France. And there too, Lambertz was able to expand sales double-digit.
Worthy of particular note is the fact that Lambertz is now generating half its revenue with year-round products outside Germany.
The export share of sale at Lambertz today amounts to around 15 percent.
Overall, the sweet baked goods market showed no growth during the financial period under review. Indeed, according to Nielsen, the market declined by 2.5 percent.
Lambertz generated an increase in revenues primarily through the successful launch of premium baked product assortments and Florentines, with contributions also coming from bio-cookies and other organic baked goods.
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Lambertz Polonia increased sales by 4.1 percent, passing the 40 million euro mark with a total of 40.2 million euros.
The improvement was primarily achieved in Russia, Ukraine and Azerbaijan. In Poland, the Lambertz Group enjoys a share of its particular market segment of some 65 percent. The figure in the Czech Republic and Slovakia is 30 percent, and in Hungary it is 58 percent.
Raw materials
While last year it was primarily chocolate coatings, butter and flour which were responsible for the increase in manufacturing costs at the Lambertz Group, this financial year it was mainly sugar, butter, coconut, fats, fruit fillings, peanuts and flour, plus packaging prices, which together resulted in a huge increase on the input cost side.
Indeed, the cost increases in relation to many products have been extraordinary. In doing without things like artificial flavourings, hydrogenated fats and preservatives, and in using alternative ingredients, we have also needed to adapt our recipes so as to ensure that there is no deterioration either in the high quality of the products or in the taste and enjoyment that they provide. Such measures also tend to increase the cost of manufacture, of course, albeit to a lesser extent. As a result, the selling prices for products from the Lambertz Group will need to rise in 2012.
The company does not expect the situation on the raw material markets to change over the medium term, so higher end-consumer prices are anticipated. The demand for some raw materials is increasing due to the process of globalisation sweeping our planet, and this will continue to influence selling prices in the future.
For Lambertz, taste and high quality remain indispensable imperatives for all our products.
No consumer can be expected to remain loyal to a product that fails to meet their expectations in all respects. Satisfaction is a fundamental prerequisite for every kind of stable customer and consumer relationship.
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Other facts and figures
Sales in our home country of Poland have remained constant. The Lambertz Group has seven production facilities, of which one is in Poland. These plants account for 25 baking lines in total, two Dominosteine lines, two lines for boxed chocolates and chocolate products, six mixing lines and a waffle facility.During the Christmas period, these facilities operate three shifts a day on six or seven days of the week. At 3,450, the current number of employees has remained unchanged versus the previous year.
Capital expenditures
In fiscal 2010/2011, the Lambertz Group invested 11.0 million euros in plant and production. The emphasis lay in expansion projects for new products, automation and replacement investments.The Aachen headquarters was certified for the manufacture of bio and organic products, one line was converted for the production of organic yeast cookies, and tanks were purchased for the separate storage of organic coatings. The production of filled Lebkuchen gingerbreads was expanded in Würselen, and capacity for the manufacture of assortment boxes was expanded in several plants.
The final packaging of Dominosteine was automated in Aachen with the installation of FANUC robots which are also used in the automotive industry using similar functional principles. In the Nuremberg facility, the final packaging process for round brown Lebkuchen was reconfigured and automated in a number of sections.
Investments were made in infrastructure and buildings in all our facilities. A new oven was purchased for the Aachen plant, and this will be installed once the current Christmas season comes to an end, accompanied by an increase in the capacity of an existing line.
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Sustainability
The Lambertz Group is committed to the responsible usage of natural resources. Within this context, various energy efficiency projects have been initiated in our facilities. One of the consequences is that, in the Aachen plant alone, we have been able to reduce the emissions level, cutting CO2 output by 630 metric tons per year.
In fiscal 2010/2011, the necessary preparations were made for us to switch over completely to the use of sustainable palm oil as of the beginning of 2012. Lambertz has acquired membership of the RSPO (Roundtable on Sustainable Palm Oil), and all the facilities of the Group have been certified for the use of this environmentally acceptable resource. All the procurement contracts for plant-based fats are aligned to sustainability criteria.
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For many years now, the Lambertz group of companies has been very active in the field of sport sponsoring. Represented by Dr. Hermann Bühlbecker, Lambertz has, for example, been a long-standing sponsor of the Aachen CHIO – the World Equestrian Festival and the largest horse trials event of its kind, attracting some 350,000 spectators.
Dr. Bühlbecker is also a member of the advisory board of Aachen-Laurensberger Rennverein e. V., the association that organises the festival. As part of its involvement with the CHIO, Lambertz sponsors the Lambertz Nations' Dressage Prize and co-organises the high-profile Media Night that opens the festival and is attended by around 1,000 guests.
Some weeks ago, Lambertz also organised and supported an international competition for pole-vaulters and long-jumpers held at the Brandenburg Gate in Berlin.
As a former professional tennis player, Dr. Hermann Bühlbecker has a close affiliation with the sport and sponsors a team in Germany's premier tennis league. No less than eight tennis players in the list of the top 100 worldwide play for Kurhaus Lambertz Aachen. Such is its calibre, the team won the German Tennis Championship in 2008, 2009 and this year (2011) as well. Moreover, the US Open doubles winners Philipp Petzschner and the German number one Florian Mayer sport the Lambertz logo in all their matches. And Lambertz's many years of sponsorship of the local professional football club Alemannia Aachen needs no further explanation.
Social Responsibility
Even and particularly in times of crisis, Lambertz has retained and extended its focused commitment toward social progress. The company regards this as an investment in the future that pays dividends over the medium and long term.
"Not only are entrepreneurs obliged to optimise their own profits, they also share a huge social responsibility that stems from the complex problems confronting us around the world," explains Dr. Hermann Bühlbecker.
For the last six years, Dr. Bühlbecker has been involved in the Clinton Global Initiative (CGI) as part of his international networking effort in this domain, and joins various heads of state, business leaders and prominent personalities from public life at the annual CGI summit held in New York. The focus is on the promotion of education and training, with particular emphasis on the Third World.
Other carefully selected aid projects that deliver outstanding results in their field are supported by the Lambertz Group. In the area of health and medical research, these include the amfAR (American Foundation for AIDS Research) and the Elton John Aids Foundation. A number of national charities likewise benefit from the involvement of the Lambertz Group.
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With the world's largest food and nutrition trade show – the ANUGA in Cologne, Germany – about to open its gates on October 5, 2013, Lambertz is sure that it will once again delight its trade customers with its range of outstanding products. Although the importance of the ISM is slightly higher for Lambertz due to the uniqueness of this fair, we are nevertheless already looking forward to meeting our national and international retail partners at the ANUGA.
We will be showcasing innovations that otherwise only appear at the ISM. Particularly in view of the further expansion of our export business, this trade show takes on special importance for us.
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Lambertz intends to keep its focus firmly fixed on clean label issues. The Quality Assurance department in the company is making every effort to meet the relevant requirements without any kind of qualitative impairment.
Lambertz will be putting even more emphasis on innovative marketing as it looks to the future.
At the beginning of October, the Lambertz 2012 calendar was produced in Seville and, on January 30, 2012, there will once again be a special Lambertz Monday Night in Cologne in the "Alter Wartesaal" conference hall. This constitutes Germany's biggest celebration of sweet comestibles.
Overall, Lambertz expects to again perform well in fiscal 2011/2012.
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