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Systembolaget's 2018 Responsibility Report · PDF file SYSTEMBOLAGET’S 2018 RESPONSIBILITY REPORT societal engagement in second­hand alcohol­related harm. Health and wellbeing

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  • 2018 Responsibility Report S Y S T E M B O L A G E T ’ S

  • The Board of Directors and the President of System­ bolaget AB, corporate ID number 556059-9473, hereby present the annual accounts, including the Corporate Governance Report and the Sustainability Report, for the 2018 financial year.

    Systembolaget AB has, in accordance with section 6, §11 of the Swedish Companies Act, elected to prepare the statutory sustainability report separately from the annual accounts. The Sustainability Report is presented on pages 3, 5–15, 17–72 and 113–142 of this document.

    The legally required annual accounts, comprising the Directors’ Report and the financial reports, are accord­ ingly presented on pages 2, 4, 16 and 73–112.

    The Sustainability Report, which is presented on pages 3, 5–15, 17–72 and 113–142, has undergone a combined review by the auditors.

    2

  • Financial reporting 73

    Economic performance 74 Risk and sensitivity analysis 78 Corporate Governance Report 82 Ten­year overview 99 Financial reports and Notes to the Accounts**

    100

    Proposed appropriation of profits, and signatures

    112

    Sustainability notes 113

    Audit and review 116

    Glossary and definitions*** 138

    List of references 142

    Financial calendar and contacts 143

    Contents The year in brief 4

    Chairman’s Statement and President’s Statement

    5

    This is Systembolaget 8

    Our history 9 The world around us 10 How we create sustainable value 13 Systembolaget’s business model 15 Our materiality analysis 17 The UN’s global goals 19 Systembolaget’s strategic plan 21

    Our three strategic shifts 26

    We shall continue to impress our customers

    27

    Increase awareness of alcohol risks and of why Systembolaget exists

    52

    Creating optimum conditions for achieving our goals

    61 ** See Systembolaget’s Ansvarsredovisning 2018 for

    full Notes to the Accounts. *** Words included in the Glossery are marked  * Explanations on the same page are marked ** or ***.

    Alcohol is not like other products.

    Our purpose is to improve public health by limiting the harmful effects of alcohol.

    Our mandate includes providing information on the risks associated with alcohol,

    offering a high-quality service, and selling responsibly.

    3

    S Y S T E M B O L A G E T ’ S 2 018 R E S P O N S I B I L I T Y R E P O R T

  • The year in brief • The 2017 measurement of alcohol consumption**

    in Sweden showed that consumption was on a par with levels in 2016, that is to say 9.0 litres per head of population. Total consumption has fallen over the last ten years by 8 per cent.1

    • Systembolaget published its Alcohol Report2 for the second year in succession. The aim of the report is to provide a one­stop shop for alcohol­related statis­ tics, research, interviews, and information on trends and harmful effects in Sweden. This year’s theme is mental illness and passive drinking.

    • The Nordic alcohol monopolies work in partnership and have approved joint sustainability strategies for the environment and social responsibility for the pe­ riod from 2018 to 2022. We have agreed a joint Code of Conduct and to collaborate and share experiences on issues relating to risk analyses, our follow­up work, educational measures, and personal learning. These strategies will enhance our ability to influence terms and conditions in our respective supply chains.

    • The Drinks Industry Climate Initiative, which is a joint initiative by Systembolaget, the Swedish Spirits & Wine Suppliers’ Association (SVL), and the Brewers of Sweden Association, agreed to procure a shared tool enabling us to measure, follow up on, and set goals for participating operators’ climate impact. Our goal is, by 2045, to realise our vision of “A drinks industry with zero climate impact, where every drop counts”.

    • Systembolaget signed up for the Global Deal* which is an initiative aimed at increasing social dialogue between the labour market parties and national go­ vernments.

    • Trial runs of our “Changed my mind” trolley, which is located at the checkout to make changing your mind easy, have been completed and the trolley will now be a permanent feature in all*** of our stores.

    • There is substantial customer demand for local and craft products. 840 items from 347 producers were launched in 2018, which means 66 new producers were added to our range in 2018.

    • Awards: ­ Winner of the Medieakademin confidence barometer, which measures public confidence in media compa­ nies, institutions, and companies. 71 per cent of res­ pondents expressed great or fairly great confidence in Systembolaget.3

    ­ Second place in ServiceScore’s best service award, which Systembolaget won every year between 2013 and 2017.4

    ­ Declared strongest brand in the Evimetrix Swedish Brand Awards, in the Food Products category.5

    ­ Sweden’s biggest PR competition, Spinn, awarded two golds to IQ­ initiativet’s “Fotboll utan fylla” [Sober Football] campaign – one for the Social Information Campaign of the Year, and one for Integrated Cam­ paign of the Year.

    • Barbro Holmberg was elected as a new full Member of the Board at the AGM held on 26 April.

    • The Board adopted a new sustainable enterprise stra­ tegic goal for Systembolaget. The goal, which relates to inclusiveness and diversity, will be introduced in 2019 and the goal is for Systembolaget’s workforce to reflect society’s composition of people with different ethnic origins.

    • We are very proud to announce that this year’s Custo­ mer Satisfaction Index reached a new record level of 84.6 (84.3).

    • Proof of Age checks were carried out in 95.6 per cent (95.6) of cases.

    • The Opinion Index figure for the year was 76.5 (76.9). • The return on equity was 11.4 per cent (17.2), which

    exceeds the Owner’s return requirement. • The equity/assets ratio for the year was 25.7 per cent

    (27.8). • The sales volumes totalled 505 m (483) litres. • Net sales increased to SEK 30,907 m (29,355). • The operating profit decreased to SEK 227 m (270)

    due to major investments for the future in such areas as the digital customer interaction and alcohol­rela­ ted risks.

    • The net profit for the year decreased to SEK 180 m (282) due to investments and a decrease in net finan­ cial items.

    ** The measurement of alcohol consumption was carried out in 2018 and refers to 2017. Reported one year in arrears. *** With the exception of two over­the­counter stores in food halls.

    The year in brief S Y S T E M B O L A G E T ’ S 2 018 R E S P O N S I B I L I T Y R E P O R T

    4

    C O N T E N T S

  • A conversation with our President and Chairman of the Board As part of this year’s Responsibility Report, we have interviewed Kenneth Bengtsson, the Chairman of the Board, and Magdalena Gerger, Systembolaget’s President, in order to highlight the most important issues for Systembolaget in 2018, as they see them.

    What sort of outside world trends affect System­ bolaget? Kenneth: Attitudes to alcohol, climate change, new technology and digitisation – these are just some of the big picture trends that I see as affecting System­ bolaget.

    Both consumption patterns and society’s attitudes to alcohol are changing worldwide and here in Sweden. The WHO report 6 presented in October shows that Europe has the highest levels of per capita alcohol consumption in the world. There are several reasons for this: one is that there are many countries outside Europe that do not drink alcohol. Another is that, unlike in many other parts of the world, both men and wom­ en consume alcohol in Europe. We also have better economic conditions than many other parts of the world and a culture where alcohol is present in a wide variety of contexts. The figures for several countries

    Chairman’s Statement and President’s Statement S Y S T E M B O L A G E T ’ S 2 018 R E S P O N S I B I L I T Y R E P O R T

    are alarmingly high, although more and more countries are moving towards a more restrictive alcohol policy. We’ve made substantial progress in many ways in Swe­ den, and total consumption has fallen by 8 per cent over

    the past ten years.1 Sweden now has one of the lowest alcohol consumption rates of all EU member states.

    Magdalena: That having been said, Sweden still faces a number of challenges. The negative consequences

    5

    C O N T E N T S

  • of alcohol primarily affect people other than those who drink, and this is particularly the case for children. Which is why it’s worrying to see that the most recent Alcohol Index measurement shows a trend towards a more permissive attitude to alcohol. One of the things it reveals is that fewer and fewer people think that it is totally wrong to get drunk when children are around. Systembolaget has the opportunity to make a difference for everyone in Sweden. Our mandate is to sell responsibly and, at the same time, to offer a high­quality service. We are also tasked with providing information about the harmful effects of alcohol and the risks associated with its consumption.

    Every day, our staff shoulder social responsibility by applying our selling rules. These rules mean that they check the ID of people who they suspect may be under

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