The year 2020 was clearly defined by the global COVID-19-pandemic and related disruptive challenges. All of Fazer’s markets were impacted by the pandemic but, thanks to several agile measures and the professionalism of Fazer employees, Fazer showed clear resilience to the prevailing crisis.

Throughout the year, Fazer continued its transformation into a modern, sustainable fast-moving consumer goods (FMCG) company, supported by the divestment of Fazer Food Services. The implementation of a new operating model was started, including changes in the commercial organisation, in marketing and in procurement, as well as reorganising Group functions. Actions to increase efficiency in manufacturing included transferring the production of xylitol pastilles and chewing gum from the factory in Karkkila to Lappeenranta and the production of Fazer Yosa oat products from Kaarina to Koria. During the year, several measures were taken to drive operational excellence, synergies and value.

After the review period, Fazer announced the introduction of a new operating model in Fazer Bakery Sweden. The new model includes a re-seller and co-distribution agreement with the Swedish bakery sales company Polfärskt and reduces the number of bakeries from four to three.

In 2020, net sales from continuing operations remained at the previous year’s level and the operating profit improved.

Operating environment and market development

Fazer’s main focus in its operations is in the bakery, confectionery, non-dairy and plant-based food and milling markets through its three Business Areas: Fazer Bakery, Fazer Confectionery and Fazer Lifestyle Foods. Fazer Retail, previously a separate business, was integrated with the Fazer Confectionery Business Area in 2020. In addition, the crisp business was transferred from Fazer Bakery to Fazer Confectionery. Geographically, the Group’s main markets are the Nordics, Russia and the Baltics with export sales to approximately 40 countries globally.  

Consumer behaviour changed in several ways in 2020 due to the exceptional situation. The economic uncertainty affected the level of price sensitivity as the popularity of value alternatives increased. Locally produced food and raw materials continued to appeal to consumers looking for transparency and safety. Domestic travel further supported this development. Home cooking increased as people increased remote working, and restaurants were either closed or avoided. Social distancing also brought a substantial increase in online shopping and food deliveries. 

Certain trends which existed pre-COVID saw a clear acceleration but also polarised some consumption drivers. Well-being as a trend has been growing for years, and it further accelerated as people increasingly acknowledged the role of food as part of a healthy lifestyle. During the pandemic, hygiene quickly became a preference driver which very soon took its toll on, for example, unpacked products such as pick ‘n’ mix sweets. 

In Finland, the bakery market was affected by the pandemic in the spring but turned back to growth towards the end of the year. The bake-off market recovered fast, while the fresh pre-packed market performed strongly throughout the year as demand for packed bread increased substantially. Demand for frozen products declined as restaurants and hotels faced restrictions and closures. In Sweden, the market grew throughout the year. In Russia, the market started to gradually recover towards the end of the year but, due to increased price sensitivity, lower-price bakery segments continued to grow throughout the year. The development was similar also in the Baltics. Fazer is mainly known as a premium brand in the Baltic countries and Russia. 

The confectionery market grew in Finland and Sweden. In Finland, Fazer’s market share remained close to last year’s level, and in Sweden, Fazer gained market share. The travel retail market, an important market for Fazer, was heavily impacted throughout the year by the travel restrictions imposed from the start of the pandemic. Remote work, restrictions and recommendations regarding gatherings alongside general cautiousness affected customer traffic, especially in city centres and malls, and, as a consequence, also cafés and bakery shops were impacted.    

In Fazer Lifestyle Foods, the non-dairy market continued to grow, and the breakfast category strengthened. Demand for oat and rye flour remained strong in the milling business. The smoothie category declined particularly in the on-the-go channels as consumers reduced their everyday travelling and commuting due to COVID-19. 

Discontinued operations

The sale of the Fazer Food Services business to Compass Group was completed on 31 January 2020. Fazer Food Services is reported as discontinued operations in Fazer Group’s Financial Statements for 2019 as well as for the one-month period ending 31 January 2020. In 2020, Fazer Food Services’ net sales totalled 50.8 M€ (597.3). The result of discontinued operations includes a 414.3 M€ gain of the sales of Fazer Food Services operations. The result of discontinued operations is presented in the income statement net of tax under “Result for the period, discontinued operations”.  As a result of sales of Food Services operations, there were no assets or related liabilities classified as assets held for sale at year end 2020. For the comparative period assets related to discontinued operations are reported in the balance sheet as “Assets held for sale” and liabilities as “Liabilities related to assets held for sale”. The cash flow statement includes discontinued operations in 2019 and 2020.

Financial performance of continuing operations

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Net sales and profitability

Fazer’s net sales remained at the previous year’s level and totalled 1,101.2 M€ (1,097.0). The foreign exchange rate changes reduced the Group’s net sales by 18.6 M€. The businesses acquired in 2020 i.e. Vuohelan Herkku increased net sales by 5.3 M€ compared to previous year.

Fazer Bakery’s net sales for 2020 remained at the previous year’s level and totalled 548.6 M€ (555.6 in 2019 excluding the net sales of the crisp business transferred to Fazer Confectionery). Fazer acquired Vuohelan Herkku’s bakery and mill businesses in January 2020, making Fazer one of the biggest players in gluten-free bakery products in Finland. In Finland, demand for Fazer’s packed bread increased strongly when the COVID-19 pandemic started. Sales of frozen products were negatively impacted as restaurants and hotels faced restrictions and closures. Demand slowly recovered towards the end of the year. The shop-in-shops sales declined steeply in the beginning of the crisis but recovered fast and reached record levels towards the end of the year. At the end of 2020, Fazer had a total of 105 shop-in-shops in Finland. In Sweden, sales increased in all channels as a result of strong product launches in strategic segments and good development in export. Fazer Bakery strengthened its market position in Russia, with growth in bake-off bread and increased sales through new digital sales channels. In the Baltics, financial insecurity caused by the COVID-19 pandemic shifted consumer interest from premium towards mainstream products. A similar trend was also observed in Russia. In the Baltics, price competition increased as new players entered the market. Two new shop-in-shop bakeries were opened in Estonia, where Fazer currently has 5 shop-in-shops in total. Turnaround programmes to increase operational efficiency in Fazer Bakery’s operations in Sweden and Russia were efficient and resulted in improved performance.

Fazer Confectionery’s net sales declined by 2.3% from the previous year and totalled 400.1 M€ (409.4 in 2019 including net sales of the Fazer Retail and crisp business transferred to Fazer Confectionery). The decline was attributable to Fazer Retail, where the Fazer Café and Gateau businesses were heavily impacted by COVID-19 related restrictions, as well as to the complete standstill in Travel Retail. Confectionery sales in Finland, Sweden, Denmark, Russia and the Baltics were relatively stable. Sales especially in Finland, were supported by the consumer tendency to rely on well-known brands in uncertain times. COVID-19 changed consumer behaviour, which led to the polarisation of demand. Chocolate tablets continued to sell well and there was strong growth in candy bag sales, whereas demand in biscuit, pick & mix and products in the impulse category, such as pastilles and chewing gum, decreased. Seasons are very important for Fazer. In 2020, Easter and Halloween sales suffered from the restrictions, whereas Christmas sales exceeded expectations, especially in Finland and Sweden. The standstill of the Travel Retail sales resulted in some lost net sales and temporary layoffs at the Vantaa and Lappeenranta factories. Strong novelties and marketing campaigns generated growth in chocolate bars, candy bags, and chocolate tablets and the seasonal portfolio continued its strong performance.   

Fazer Lifestyle Foods’ net sales grew by 11.8% to 176.7 M€ (158.1). Growth was attributable to sales from Kaslink, acquired in August 2019. Demand for breakfast products was at a good level, whereas on-the-go categories such as smoothies and juices faced challenges. Net sales were negatively impacted by the decline in on-the-go snacking and the standstill in the hotel and restaurant sector as well as in the travel related channels. To meet the growing demand for oats and to provide top-quality ingredients for Fazer’s businesses, in particular, for the non-dairy, plant-based meals and breakfast categories, Fazer started the doubling of the oat milling capacity in Lahti, Finland and Lidköping, Sweden. The investment project progressed according to plan, and additional capacity will be available during 2021.   

Operating profit for the continuing operations improved and was 51.9 M€ (49.1). Operating profit included 6.2 M€ (4.0) one-time restructuring costs and write-offs (net), mainly related to manufacturing efficiency improvement measures in Fazer Confectionery and Fazer Lifestyle Foods, turnaround programmes in Fazer Bakery’s operations in Sweden and Russia, the revaluation of Russian land plots and recognition of Vuohelan Herkku negative goodwill. The 2020 result was also burdened by 2.7 M€ (5.9) additional one-time costs and write-offs mainly related to the acquisition of Vuohelan Herkku, divestment of Fazer Food Services and implementation of Fazer accounting principles in acquired companies. The profit for the financial period amounted to 32.6 M€ (38.9) for the continuing operations.

Financial position and cash flow

The Group’s financial position was further strengthened as a result of the divestment of the Fazer Food Services business. Reported interest-bearing net debt totalled -213.3 M€ (127.0) and gearing was -22.8% (22.5%). The Group’s equity ratio was 70.7% (52.6%).

The Group’s reported cash flow from operating activities was 152.4 M€ (144.8) and gross investments amounted to 104.1 M€ (107.1), excluding investments in financial assets. Majority of the large investments were done in Fazer Lifestyle Foods in the new xylitol factory, oat mill expansions in Finland and Sweden and non-dairy production equipment in Koria. Other important investments included new production equipment and upgrades to the existing machinery in Fazer Bakery and Fazer Confectionery.


At year-end, Fazer had 8,496 employees (8,805) in the continuing operations and none (6,958) in discontinued operations. Fazer Bakery employed 5,880 (5,903), Fazer Confectionery 1,904 (2,113), Fazer Lifestyle Foods 428 (471) and shared functions of the Group 284 (318) at the end of the year.


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Strategy and strategy implementation 2020

Fazer, celebrating its 130th anniversary in 2021, is financially strong and has a clear strategy for the future. Future growth is sought both organically and through M&A opportunities. Fazer has high growth ambitions going forward, which could also open up for a potential broadening of the shareholder base through a public listing at some point in the future.

In the coming years Fazer will continue to focus on its four strategic development areas:

  • leveraging the leading FMCG (Fast Moving Consumer Goods) brand to strengthen its position in Finland,
  • accelerating growth through innovations, on-trend categories and foodtech,
  • developing leading positions in Northern Europe, and
  • driving operational excellence and developing ways of working to enable industry leading profitability.

Sustainability is an integral part of the Group strategy, and in its sustainability work Fazer focuses on lowering emissions, decreasing the amount of food waste, sustainable sourcing, and introducing more plant-based food in our offering.

In accordance with its updated vision Towards Perfect Days, Fazer continued to execute its strategy in 2020. The divestment of Fazer Food Services to Compass Group was completed on 31 January 2020 supporting Fazer’s transformation towards a FMCG company.

In January, Fazer acquired Vuohelan Herkku’s bakery and mill businesses. Vuohelan Herkku is one of the forerunners of gluten-free baking in Finland and has a new gluten-free bakery in Lahti. Through this acquisition, Fazer became one of the biggest players in gluten-free bakery products in Finland.  

Fazer’s ambition is to become one of the leading plant-based players in Northern Europe by continuously identifying new categories and growing current categories. By investing in innovations and foodtech, Fazer strengthens its focus on the sustainable food solutions of the future. Fazer’s unique xylitol factory, utilising oat hull, the side stream of the oat milling process, to produce xylitol with state-of-the-art technology will be inaugurated in 2021. Fazer’s strategic focus on innovations, has been recognised by the Finnish Food and Drink Industries’ Federation who awarded the factory the Star Act 2020 in November 2020

During the year, Fazer increased its shareholding in Solar Foods and became the largest single shareholder, with an approximately 15% ownership stake. Solar Foods is a Finnish foodtech start-up, which has developed a novel protein ingredient, Solein®, from CO2. The company aims to further develop its protein ingredient for broader use in consumer products. Fazer will continue to support Solar Foods in the form of research, innovation and commercial development, in addition to active ownership.

To meet the growing demand for oats and to provide top-quality ingredients for our businesses, Fazer will double the oat milling capacity in Lahti, Finland and Lidköping, Sweden in 2021. Oats will continue to be at the core of the Fazer Lifestyle Foods’ business and an important ingredient, especially in the bakery business. The use of oats in various categories will develop. A great example of a true innovation that responds to the needs of the consumers is the Fazer Oat Rice, which was launched in all Nordic countries in 2020. The novelty innovation was awarded the Swedish Food Award Livsmedelspriset 2020. Strong focus will remain on the non-dairy, plant-based meal and breakfast categories. Systematic R&D work contributes to a wide portfolio of innovations to further build on. Selected acquisitions play a key role in the realisation of the growth plan.

In 2020, several measures were taken to drive operational excellence, synergies and value. The implementation of a new operating model was started, including changes in the commercial organisation, in marketing and in procurement, as well as reorganising the Group functions. In addition, actions to increase efficiency in manufacturing included production transfers within Fazer Confectionery and Fazer Lifestyle Foods in Finland.

The turnaround and transformation initiative in Fazer Bakery Sweden, announced on 9 February 2021, is a good example of developing new ways of working to support profitable growth. The new operating model, targeted to come into effect by summer 2021, includes a re-seller and co-distribution agreement with bakery sales company Polfärskt and reduces the number of bakeries from four to three. The new operating model will increase Fazer’s agility and service levels for customers and, at the same time, build a more sustainable and environmentally friendly way of operating the bakery business.

Research and development

Fazer continued its strong food technology R&D work with multiple projects. The Fazer Oathow project focuses on oats and future oat technologies. The Fazer Xtech project has a strong focus on foodtech including, in particular, plant proteins, side streams and sugar reduction. Fazer and Solar Foods continued their strategic R&D co-operation in the Solein2Food project that aims to commercialise Solar Foods’ novel sustainable protein ingredient in the form of new food products.

Fazer also continued work in the field of nutrition. Fazer’s Brainhow project moved from the research phase to the implementation phase. Fazer is conducting research in SLU Uppsala, Sweden, related to grain fibres and the gut-brain axis with a clinical intervention study. Fazer and the Nordic Rye Forum co-organised a rye symposium in the 12th Nordic Nutrition Conference.

Research and development costs amounted to 8.4 M€ (9.3) for the continuing operations.


Sustainability is an integral part of Fazer’s strategy and leads its work through four Core goals: 50% less emissions, 50% less food waste, 100% sustainably sourced, and more plant based. More information about Fazer’s sustainability work, including quality, environment, occupational health & safety and food safety, as well as the progress in 2020 can be found in Fazer’s sustainability report and non-financial information , included in the Annual Review to be published in week 15. The information will be published on the Fazer Group’s website in the Reports & Governance section.

Risk management

Fazer regularly evaluates and analyses the Group's strategic, operational and financial risks within the framework of its risk management policy and takes action to mitigate these risks. In 2020, managing and mitigating the COVID-19 pandemic-related near-term business and financial risks were a key priority. Fazer took prompt action to safeguard the health and safety of its employees as well as the company’s financial stability and business continuation. Thanks to all the preventive measures that were introduced at an early stage of the pandemic, Fazer was able to continue all production operations throughout the year. Fazer continues to monitor the situation very closely. For more information on financial risk management, see Note 11.3 to the Financial Statements.

Changes in Group legal structure

Fazer continued to simplify its legal structure to reduce administrative work and to increase organisational agility. The changes in the Group legal structure are disclosed in Note 24 to the Financial Statements.

Shares and share capital

In June 2020, the parent company organised a directed share issue in which 382,276 new preference shares with a subscription price of 303.17 euro was issued. The shares, equivalent to 115.9 M€, were paid in kind with the outstanding shares of Fazer Food AB, after which the company was merged with Oy Karl Fazer Ab. The nominal value of 20 euro per share, equivalent to 7.6 M€, was recorded in share capital and the rest, equivalent to 108.2 M€, in the reserve for invested unrestricted capital.

At the end of 2020, the parent company Oy Karl Fazer Ab had 4,341,039 preference shares and 2,365,200 ordinary shares. Preference shares carry a preferential right of at least 6% of the share’s nominal amount, ahead of ordinary shares, for the annual dividend from the company’s distributable profit. At the Annual Shareholders’ Meeting, each ordinary share is entitled to ten votes and each preference share carries one vote.

Board of Directors and auditors

At the Shareholders’ Meeting on 1 April 2020, the following Board members were re-elected: Berndt Brunow (Chairman), Anders Dreijer (Vice Chairman), Klaus Cawén, Ketil Eriksen, Jan Fazer, Johan Linder, Cecilia Marlow and Juhani Mäkinen. Casper von Koskull was elected as a new member of the Board of Directors at the extraordinary shareholders’ meeting on 19 October 2020.

Authorised Public Accountants PricewaterhouseCoopers were chosen as auditors, with Authorised Public Accountant Martin Grandell as auditor-in-charge.

Events after the reporting period

On 9 February 2021, Fazer Bakery Sweden announced that it had entered a re-seller agreement with the bakery sales company Polfärskt in order to enhance the service level Fazer Bakery Sweden can offer its customers. The agreement will come into effect by the summer 2021. As a result, Fazer Bakery’s own field sales and distribution organisation in Sweden will be discontinued. Moreover, Fazer plans to close its bakery in Lund in the autumn of 2021. A more concentrated bakery network suits Fazer’s product range better and creates better conditions for baking more efficiently and sustainably. The plan is to move production from Lund to Fazer’s bakeries in Umeå, Eskilstuna and Lidköping. Negotiations with the unions are ongoing. The changes affect all 495 employees including sales extras within field sales and distribution as well as 69 employees in the Lund bakery. Fazer supports all employees affected by the change.

After the year-end, the COVID-19 pandemic has continued to directly and indirectly influence Fazer’s businesses which has led to new collaboration negotiations.

Risks and short-term business uncertainties

In 2021, the uncertainty caused by the COVID-19 pandemic remains high as new waves and virus mutations alter the situation quickly and impact the markets in different ways and at different times. The prolonged situation adds to uncertainty in economies globally and increases price sensitivity in fast moving consumer goods. Governmental restrictions and recommendations may impact all Fazer key markets and businesses. As in 2020, the key impacts to Fazer’s businesses are anticipated in the sales of frozen bakery products driven by the HoReCa channel’s gloominess, Travel Retail remaining in a standstill and the retail business being affected by decreased customer traffic in city centres and malls. Besides, and partially related to the uncertainties the COVID-19 pandemic may cause, the timely completion of the new manufacturing facility and equipment investments as well as the efficient ramp-up of operations in the new xylitol factory and two new oat mills affect Fazer’s operational risks in 2021.

Outlook for 2021

In 2021, Fazer’s net sales and the comparable operating profit from continuing operations are expected to improve compared to the previous year, assuming the development of the COVID-19 pandemic and the general economic climate will not deteriorate. The outlook is subject to operational risks and uncertainties, as well as lower than normal visibility due to the COVID-19 pandemic.
In 2021, Fazer will continue its transformation towards an integrated FMCG company, enabled by its exit from the food service business in early 2020. Accelerating growth through innovations, on-trend categories and foodtech as well as developing leading positions in Northern Europe remain key strategic focus areas during the year. Moreover, Fazer will continue building an even stronger position as the number one FMCG brand in Finland. Driving operational excellence and excelling in ways of working will improve our profitability. In addition to organic growth, Fazer will continue its active M&A work to boost growth and internationalisation.

Proposal for distribution of profit

The parent company’s distributable funds amount to 1,081,446,262.60 euros of which 406,791,490.38 euros represent profit for the financial year.

The Board of Directors proposes to the Shareholders’ Meeting that distributable funds should be appropriated as follows:

- to pay a dividend of 14.40 euros per share      96,569,841.60 €
- to leave in profit brought forward                 984,876,421.00 €
                                                                 1,081,446,262.60 €

The proposed dividend does not pose any risk to the company's financial standing.

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