Financial Year 2007/2008

Lambertz Group continues on course for “traditional“ growth
The Lambertz success story continues in its anniversary year. Positive numbers for the financial year 2007/2008 by continuing its tradition and maintaining product quality.

In the year of its 320th anniversary, the Lambertz Group fittingly came up with consistently positive numbers for the financial year 2007/2008 (July 1, 2007 – June 30, 2008).

For the first time in company history, the half billion EURO mark was exceeded. The total turnover has increased by 7.4% to EUR 506.8 million.
Please find the exact share of sales in the chart below.

Share of Sales 06/07 - 07/08

Season

In 2007, the seasonal turnover was increased by 6.1%, seasonal products accounting for 34% of the entire product line of the Lambertz Group.

Favorable weather conditions – fairly cold temperatures – (“Printen“ weather for Lambertz) and high sell-throughs in the areas of domino dice, pyramid cakes, and spice nuts contributed to the good results. Despite a high numerical and weighted distribution on the market, the sale of domino dice, for example, increased by 18%. For the first time in years, supply bottlenecks occurred despite seven-day workweeks and a three-shift system.

The trend towards premium products, or rather products with ingredients of high quality, also created a high turnover for the traditional “Henry Lambertz“ product line, encouraging further cultivation and expansion of this product segment.

According to sales managing director Ralf Fritzsche, additional turnover and a better rate of return can only be achieved by finding the ideal moment to start the season. Once again, 2007 has shown that market participants were able to realize sales increases of up to 15%, when placing their products at the POS at the right time. Purchasing agents, who were at the POS on the first days of September, soon had to order more in considerable quantities. This is yet another important reason for sales increases in comparison to the previous year.

Haeberlein-Metzger was also able to grow above average. The turnover rose to EUR 18.7 million, solidifying the fact that seasonal fall and Christmas products of excellent and outstanding quality create an increase in demand. The cultivation of this historical premium brand, the use of finest-quality ingredients, as well as the exceptional and traditional packages and boxes generate a more and more positive response.

Haeberlein-Metzger is “THE“ premium brand in the area of seasonal products. In contrast to other categories of goods, Lambertz’ market insights show only a limited consumer demand for lifestyle or organic seasonal products. A long history and traditional products continue to define the season.

According to Fritzsche, people take to gingerbread at an early childhood age. At the beginning of the season, consumers, therefore, expect to find traditional products, such as gingerbread, domino dice, “Printen“, and spice nuts at their grocery stores. During the season/gingerbread season, buyers consume up to 12 times more gingerbread than any other pastry product. Also, the number of rebuys of seasonal products is very high, because consumers know that they can enjoy these products only during a limited time of the year. Thus, these items keep reappearing on their shopping lists during gingerbread season.

Year-Round Products

In regard to the year-round products, which account for 66% of the entire product line, the turnover increased by 8.1%, considering, however, that the price adjustment of the financial year’s second half is already included in the turnover. Having had stable prices during the previous season, end consumer prices in 2008 were adjusted due to the extremely tense situation with regard to commodity prices. Over the course of one year, costs in part increased up to 70%, affecting almost all the ingredients needed for production. This has been unprecedented in Lambertz history.

Domestically, the newly introduced “Nussparade” products and outstanding sell-throughs of pastry mixes and mono pastries were responsible for the increase in sales.

As in previous years, Lambertz’ secret to success during the past financial year was once again Lambertz’ ability to flexibly and innovatively respond to consumer preferences.

Lambertz Continues on Road to International Success

The international turnover of the Lambertz Group grew in parallel to the domestic turnover. Fortunately, permanent listings throughout the entire year could be realized with several large U.S. retailers. In cooperation with our American partners, we were able to distribute and develop products aimed at American consumer preferences. A very weak Dollar prevented an even stronger growth in the United States. In Australia, the world market leader’s seasonal products are already distributed. Now, consumers in China can also enjoy the delicious gingerbread products. Lambertz can, therefore, truly claim that gingerbread and “Printen“ are available all over the world. First distributions of year-round products could also be realized in Asia.
The Eastern Europe turnover of Lambertz Polonia also saw an above-average increase by 28.6% to EUR 42.7 million, including established markets like Poland, the Czech Republic, Rumania, Hungary, etc., as well as Kazakhstan, Ukraine, and Latvia, which had previously been virgin soil for Lambertz. Several appealing year-round products have been added to the Polish, i.e. Eastern European product portfolio. In Poland and large parts of Eastern Europe, Lambertz is the market leader.

Overview

Investments

In the financial year 2007/2008, investments were higher than in previous years. Setting aside modernization measures concerning factories and the development of new products, a total of around EUR 18 million was spent on the main focus areas of logistics and automation.

Due to a new logistics concept, Lambertz now has the ability to react to all of the demands of the retail market on short notice; i.e. well-directed storage and the perfection of certain regional product lines ensure the readiness for delivery. At the same time, the Lambertz Group’s storage locations adhere entirely to all regulatory requirements regarding batch tracing as well as electronic shipping notification.
In the meantime, the center of distribution at Würselen, which went into operation last year, has been purchased and expanded. The new logistics center combines the flow of commodities of the Aachen and Würselen storage facilities. It is equipped for the quick movement of goods concerning year-round products as well as the storage of seasonal products. Due to this new logistics center, Lambertz was able to improve logistics indicators by a double-digit percentage, thus, significantly reducing costs.
In May of 2008, Lambertz put into operation a storage facility in Nuremberg, featuring the most advanced sliding storage rack technology and a storage capacity of 12.000 pallets in the immediate proximity of the factory. The advantage of the automated sliding storage system is saving of space, while at the same time providing the ability to access all pallets individually. Quick access is ensured by inventory management software, which is directly connected to the sliding storage system. In regard to annual business, this storage facility temporarily stores pastries for the Southern German market as well as seasonal products manufactured at the Nuremberg factory.

Overview

Automation

At the factory in Aachen, the traditional “Kräuterprinten“ are produced and packaged in a fully automated process. Nonetheless, a lot of attention was paid to maintaining the Printen’s traditional appearance in the bag.

From molding to baking, refining to packaging products, the factory in Neu-Ulm is now fully automated, replacing manual labor in the production process. In the case of the “Herzen-Sterne-Brezeln“ (Hearts-Stars-Pretzels) product, a new packaging concept, which includes automated palletizing, was installed.

Additional Data and Facts

The Lambertz Group owns seven factories, one of which is located in Poland. Collectively, these factories have a total of 25 baking lines, two domino lines, three lines dedicated to pralines and chocolate products, six lines for pastry mixes, and one wafer baking system. During season, these factories are operating at full capacity on a six to seven-day workweek and a three-shift system. The current number of 3.450 employees remains at the same level as the year before.

Overview

In 2008, Lambertz was once again very successful in its sports sponsorship. The German National Dressage Team, which won a gold medal at the Beijing Olympics, also took the “Lambertz Nation’s Cup“ at the CHIO in Aachen. With six players among the top 100 in the world (among them Wimbledon semi-finalist Rainer Schüttler), the “Lambertz Kurhaus Aachen“ tennis team became the unbeaten German Champions of 2008.

Outlook

For the 2008 season, Lambertz expects an increase in volume as well as turnover. The consumers’ tendency to buy familiar products in times of economic crisis, such as gingerbread, is a mere phenomenon that has been observed at Lambertz. In addition, new products such as the “Weiss Gefüllte Lebkuchensterne“(white chocolate filled gingerbread stars) and the?“Lambertz Herbst-Gebäckmischung“(fall pastry mix) were extremely well received by retailers.
By increasing chocolate and nuts content, Lambertz’ brand name products have once again enhanced its value. In the year of its 320th anniversary, these measures stabilize and contribute to additional sales of the Lambertz brand. The Lambertz team has also thoroughly prepared for the ISM 2009 (International Confectionary Trade Fair). Entirely new products across all product lines will be presented to the international public. Partly due to this, the Lambertz Group invested in new production sites. Today Lambertz will say this much: We will add very appealing year-round products to our premium segment.
In presenting the small cake edition “Cubino“, premium pastry mixes, a new innovative product in the area of chocolates, as well as pastries that stimulate the senses, we will once again prove to visitors at the fair that Lambertz combines zeitgeist, innovation, and quality. On this occasion Lambertz Germany, Lambertz Polonia, and Lambertz USA will present themselves as all of one family.

Overview

For 3 years, Dr. Bühlbecker and his Lambertz Group have demonstrated their commitment to the Clinton Global Initiative (CGI). At the annual summit of Bill Clinton’s initiative in New York (September 23-26), Dr. Bühlbecker will again be among the selected guests from Germany. Lambertz, in addition, supports the Tereza Maxova Foundation, the Elton John Aids Foundation, and the American Foundation for Aids Research (amfAR).

Overview