2019 Report on Sustainability - Alfaparf Group

Page created by Alan Robbins
 
CONTINUE READING
2019 Report on Sustainability - Alfaparf Group
Report on Sustainability
        2019
2019 Report on Sustainability - Alfaparf Group
Ideas, research, knowledge
processing of materials.
The technique combined with human
sensitivity.
We work so that every
professional recognize everything
this in our products and put them
at the service of its capabilities
to produce beauty.
2019 Report on Sustainability - Alfaparf Group
Indice

                                                            5
                                     Letter to the stakeholders               Product sustainability   37
                                                            6
                                                   Highlights           Environmental sustainability   47
                              Methodological introduction   9          Social sustainability: people   55
                                                           10
                                                 Materiality         Social sustainability: customers  67
                        ALFAPARF and the sustainable       12     Social sustainability: the community 71
                                  development goals

                                                           13                    GRI Content Index     75
                                Identity and governance

                                 Economic sustainability   27                   Reconciliation table   79
ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                         3
2019 Report on Sustainability - Alfaparf Group
42   ALFAPARF GROUP • Report on Sustainability 2019
        ALFAPARF GROUP • Bilancio di sostenibilità 2018
2019 Report on Sustainability - Alfaparf Group
Letter to the stakeholders
With the publication of its second Report       inspire the company’s strategic and opera-      countries to guarantee health and safety in
on Sustainability, ALFAPARF GROUP con-          tional decisions with the principles of eco-    these situations, which clearly emerged in
tinues along the path started in 2019 to        nomic-financial efficiency and social-envi-     the Western world, summons companies
communicate transparently to the stakehold-     ronmental protection.                           to tasks which, to date, had been almost
ers the policies which contribute to creating   In a number of areas, the second edition        extraneous to management, precisely be-
lasting value: development and promotion        of the Report allows a comparison with the      cause historically they were delegated
of human capital, protection of the environ-    results of the previous year. It also updates   to state institutions. In a similar scenario,
ment, construction of positive relations with   the commitments of the Group exercising         showing the sustainability of one’s organi-
the local community and the economic con-       that function of reference for the stakehold-   zation and one’s operating method will be
text of reference.                              ers which is proper to all reporting.           more difficult.
The reporting, made possible by the defi-       Publication takes place while, all over the     ALFAPARF GROUP, like other companies,
nition of formal processes introduced in        world, the health, social and economic ef-      has responded to the health emergency
the organization and by the management’s        fects of the Covid-19 pandemic are being        by modifying in progress organization and
strategy, aimed at reinforcing the path of      dealt with. Although the Report refers to       procedures to guarantee the health and
sustainable development, allows spreading       2019, the event that has marked the first       safety of its collaborators in all the coun-
a culture in the company that is consistent     part of 2020 imposes reflection, not so         tries where it operates. On the other hand,
with the values and sensitivities common        much on the impact of the next Report but,      we know we have entered a new historical
today in society.                               rather, on the evolution of the management      phase which, on the front of sustainability,
The pivot of this structure is a work group     of sustainability.                              will require the multiplication, at all levels,
that monitors the actions in the various        The awareness, widespread amongst the           of commitment and attention. It is not the
areas, recording their evolution, and that      players of the economy, that the probabil-      first time, in its forty years of history, that AL-
assists management in their decisions, thus     ity of events similar to that of 2020 is not    FAPARF GROUP has been called to perform
guaranteeing the application of the prin-       that remote and that the exposure to risk is    an extraordinary task. We are convinced
ciples of sustainability. The organizational    very concrete, will increase the importance     that the quality of our people and of the or-
commitment is significant and concretely        of sustainability, particularly in companies    ganization that we have built up will allow
shows the determination of the directors to     with global operations. The difficulty of       us to successfully cope with it once again.

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                                      5
2019 Report on Sustainability - Alfaparf Group
Highlights
                                 247,8                 MLN €
                                                       ECONOMIC VALUE
                                                       GENERATED

    11   BRANDS
                                 225,6                 MLN €
                                                       ECONOMIC VALUE
                                                       DISTRIBUTED

    4    BUSINESS UNIT
         HAIR CARE, SKIN CARE,
         RETAIL, PRIVATE LABEL
                                                                    73       MLN €
                                                                             SPENT ON LOCAL AND
                                                                             DOMESTIC SUPPLIERS

                                 5MANUFACTURING
                                  SITES

                                 24 BRANCHES
                                                                    1.685            EMPLOYEES
                                                                                     5 MANUFACTURING SITES AND
                                                                                     2 COMMERCIAL BRANCHES

                                 100   COUNTRIES
                                       REACHEDI
                                       THROUGH DIFFERENT
                                       DISTRIBUTION CHANNELS
                                                                      837
                                                                   OF WHOM               WOMEN

   6                                                                              ALFAPARF GROUP • Report on Sustainability 2019
2019 Report on Sustainability - Alfaparf Group
0,22
                                                 KW CONSUMED
                                                                          APG IS ONE OF THE FIRST 100
                                                                          ITALIAN COSMETIC COMPANIES AT
                                                                          WORLD LEVEL AND THE ONLY ONE
                                                                          OF THE FIVE ITALIAN COMPANIES,
                                                 PER KILO OF              TO OPERATE IN THE PROFESSIONAL
                                                 PRODUCT                  CHANNEL

 82.690
                                                 -15% COMPARED TO 2018
                                                 (ITALIAN BRANCH)

                                                                          500ml
 TOTAL HOURS OF

                                                 3,8
 TRAINING PROVIDED                                                                        PIECES PRODUCED
 AVERAGE OF 49 HOURS PER CAPITA                                                           BY THE COOPERATIVA
                                                                                          SOCIALE DALMINE ON

                                                                            65
                                                                                          BEHALF OF ALFAPARF
                                                 TON OF WATER                            PEOPLE
                                                 CONSUMER PER                            EMPLOYED
                                                 TON OF BULK

                                                                            40
                                                 PRODUCT                                 PEOPLE IN
                                                 -5.5% COMPARED TO 2018
                                                 (ITALIAN BRANCH)                        TRAINING

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                               7
2019 Report on Sustainability - Alfaparf Group
8   ALFAPARF GROUP • Report on Sustainability 2019
2019 Report on Sustainability - Alfaparf Group
Methodological introduction
The scenario in which the corporate vision      BOUNDARY OF REPORTING                              the manufacturing sites in Italy, Brazil, Mex-
and strategy are situated today cannot dis-                                                        ico and Argentina; for the data of an en-
regard sustainability as an element of com-     The ALFAPARF GROUP Report on Sustaina-             vironmental nature, the boundary limitation
petitive advantage which allows orienting       bility describes the initiatives and the results   concerns solely the Venezuelan manufactur-
the market and the stakeholders towards         in the economic, social and environmental          ing site. The exclusion of the Venezuelan
increasingly conscious choices. This led to     sectors with reference to 2019 in compar-          manufacturing plant and of the commercial
the decision to publish, last year, the first   ison, where possible, with the results of          branches is linked to the fact that their inci-
Report on Sustainability.                       the previous year; it has been drawn up            dence is deemed without significance with
With the decision to reinforce the structured   following the guidelines of the GRI Sustain-       respect to the total. In the case there were
path taken, ALFAPARF GROUP is publish-          ability Reporting Standards (GRI Standards)        further boundary limitations, other than
ing its second Report on Sustainability,        - “Core” option – issued in 2016 by the            those shown, they are duly shown in the
showing its commitment to integrate topics      Global Reporting Initiative.                       text.
such as innovation and creativity, but also     In order to gradually align the reporting          Lastly, the data and the information present-
social inclusion and respect for the environ-   boundary of the Report on Sustainability           ed derive from direct surveys; where it was
ment into its business model, with a view       with the consolidated financial statement,         not possible to find the data or estimates
to increasingly complete and transparent        ALFAPARF GROUP has decided to in-                  were made, these are duly shown in the
communication towards all the stakehold-        clude in the 2019 report, as well as the           document.
ers, but also a strategic vision which puts     five manufacturing sites in Italy, Argentina,
sustainability at its center.                   Brazil, Mexico and Venezuela, the two
This document aims to convey the ways           commercial branches in Spain and Por-
with which the human capital, the relation-     tugal1. Therefore, in the document, when
ship with customers, the impact on the local    “ALFAPARF GROUP” appears, reference is
communities and the solutions proposed for      made to the reporting boundary that has
environmental protection and for the sus-       just been identified, net of any limitations.
tainable development of the local area are      The data relative to the suppliers, to the
managed and developed.                          raw materials and to packaging, refer to

                                                                                                   The data relative to 2018 are relative to the 5
                                                                                                   1

                                                                                                   manufacturing sites

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                                     9
2019 Report on Sustainability - Alfaparf Group
Materiality
For the definition of the areas and of the        Lastly, these topics have been evaluated          The result of the analysis shows that, in addi-
topics to be shown in its Report on Sustain-      individually by the heads of the main cor-        tion to the financial performance, the topics
ability, ALFAPARF GROUP has analyzed the          porate functions through a questionnaire in       deemed most important both from the point
material nature aimed at identifying and          which they were asked to give a score from        of view of ALFAPARF GROUP and from the
giving priority to the topics considered im-      1 (negligible aspect) to 5 (very important        point of view of its stakeholders are linked
portant and significant for its business and      aspect).                                          to the area of the product – from the quality
for its stakeholders. These topics are defined    This year, in order to improve the process        and safety of the products as well as inno-
“material” in that they reflect the economic,     of definition of the material topics, a pre-      vation and research and development – but
social and environmental impacts of the or-       liminary activity of stakeholder engagement       without forgetting the social sphere, with
ganization and can influence the decisions        was carried out. In particular, all the employ-   particular reference to human rights and to
of the internal and external stakeholders.        ees and the Top Management of the Italian         the development and safety of employees.
In order to identify the most important and       manufacturing site and of the two commer-
significant topics for ALFAPARF GROUP, a          cial branches (Spain and Portugal) were
survey was carried out according to a struc-      asked to fill in an online survey, created ad
tured process, based on the following steps:      hoc, to understand the importance of the in-
• Interviews with the corporate people of         dividual topics, from the point of view of the
reference who hold key functions in the ar-       internal stakeholder.
eas identified as priority in relation to the     Once all the evaluations from the individual
topics of sustainability;                         surveys had been collected, they were ana-
• Analysis of the characteristics of the sector   lyzed and consolidated. The result obtained
they belong to and analysis of benchmarks         is a matrix of materiality which allows mak-
in order to identify the main topics on which     ing a synthetic representation of the topics
competitors also focus;                           analyzed. Only the topics which passed the
• Analysis of the existing internal documen-      so-called threshold of materiality were pre-
tation (including the Code of Ethics and          sented, i.e. those which obtained, on both
Model 231).                                       axes, an average score of more than 3.5.

10                                                                                                                                                ALFAPARF GROUP • Report on Sustainability 2019
MATRIX OF MATERIALITY
  Governance                                                            5,00

  Social responsibility
  Environmental responsibility
  Economic responsibility
                                                                                                                                                                      Health, safety
  Product responsibility
                                                                                                                                                                      and customer satisfaction
  Community

                                                                                                      Solidity and profitability of the Group
                                      IMPORTANCE FOR THE STAKEHOLDERS
                                                                        4,50
                                                                                                                          Transparency and integrity
                                                                               Waste production and management                                                        Product quality, packaging and R &D
                                                                                                                          in the business
                                                                                                                                                                    Human rights

                                                                                                         Marketing, communication
                                                                                                             and brand reputation                                     Prevention of corruption

                                                                                  Energy and water consumption            Markets served                              Health, safety, development
                                                                                                                                       Equal opportunities            of human capital
                                                                        4,00                 Responsible procurement                   and inclusion

                                                                                Protection of biodiversity     Engagement and development
                                                                                 and animal welfare            of local communities

                                                                        3,50                                       4,00                                      4,50                                   5,00
                                                                                                                    IMPORTANCE FOR ALFAPARF

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                                                                                    11
ALFAPARF and the sustainable
development goals (SDGs)
On 25th September 2015, at the 70th               tribution to the fight to eliminate poverty.      The results of the analysis have led to the
General Assembly of the United Nations,           As a first step towards the integration of the    selection of the following SDGs, as sustain-
the world leaders adopted a new global            Agenda 2030 into the strategy of sustain-         able development goals of priority interest
framework for sustainable development.            ability, ALFAPARF GROUP has carried out           for ALFAPARF GROUP, i.e. the attainment of
This framework is represented by the now          an exercise aimed at identifying the SDGs         which the organization can most contribute
well-known Agenda 2030, made up of                of priority interest for the organization, tak-   to through its business activities:
17 goals (Sustainable Development Goals           ing into account the topics resulting mate-
- SDGs) and 169 sub-goals, valid for the          rial from the analysis of materiality carried
period 2015-2030.                                 out and the characteristics of the sector in
The adoption of the Agenda 2030 repre-            which it operates.
sented a historical event, clearly deeming
that the model of development is unsustain-
able, not only on an environmental level
but also on the economic and social level.
All countries are also asked to contribute to
and define a strategy, which allows reach-
ing the goals by the deadline.
Lastly, the Agenda 2030 explicitly recalls
the responsibility of all the players in socie-
ty, from the governments (central and local)
to corporations, and from civil society to in-
dividual citizens. In particular, the manufac-
turing sectors and companies are asked to
implement sustainable development goals,
aiming to reduce the negative impact of
their respective businesses on the ecosys-
tem, the use of resources and fostering both
the creation of new employment and the
redistribution of wealth produced as a con-

12                                                                                                                                             ALFAPARF GROUP • Report on Sustainability 2019
Identity and governance
VISION                                         MISSION                                            VALUES

 “To create and offer solutions to exalt in-   “To guarantee and maximize the quality             The values guiding ALFAPARF GROUP in
dividual beauty, so each person’s journey      of the products and services offered to our        pursuing its goals are represented by four
becomes a pleasant experience.”                customers, combining Italian taste and cre-        key words:

                                                                                                      1
                                               ativity with the latest international trends,
                                               in the awareness that the market requires
                                                                                                                PEOPLE/RELATIONS
                                               increasing professionalism, attention and
                                                                                                                We are a large family that promotes close relations
                                               personalized services.”                                          with our customers and collaborators through listening,
                                               Orientation to innovation is one of the qual-                    support and a sense of belonging.
                                               ities of the ALFAPARF GROUP identity: the

                                                                                                      2
                                               habit of working alongside professionals
                                               all over the world has allowed developing
                                                                                                                EXCELLENCE
                                               the ability to pick up in time the trends of the
                                                                                                                We put together the latest technologies with the typically
                                               demand and channel them into activities of
                                                                                                                Italian approach of wanting to do things always aiming
                                               research and development, building up                            for excellence.
                                               and increasing a unique expertise, today
                                               recognized by the whole sector.

                                                                                                      3
                                               The products and services emblematically
                                               embody the results of research and innova-                       COURAGE
                                               tion and of the collaborations established                       We are not afraid of risks and using our independence
                                                                                                                to act and find our own way.
                                               over the years with the sector’s profession-
                                               als. In addition, the great technological ex-

                                                                                                      4
                                               pertise and the in-depth knowledge of the
                                               customers and their needs are a fundamen-
                                                                                                                PASSION
                                               tal element for the success and achieve-                         We are committed to meeting the continuously evolving
                                               ment of the Group’s mission.                                     needs of hairdressers, beauticians and their customers.
                                                                                                                We love beauty.

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                                                             13
14   ALFAPARF GROUP • Report on Sustainability 2019
History
THE ORIGINS                                      THE EVOLUTION                                    GLOBALIZATION

ALFAPARF GROUP was founded in 1980,              In 2000 the Italian manufacturing activity       In recent years, the Group has been very
on an idea of Roberto Franchina who, as-         was moved to Osio Sotto (Bergamo) and,           determined in following the path of glo-
sisted by about ten collaborators, started       two years later, ALFAPARF GROUP came             balization, extending its business beyond
to conceive products for the hairdressing        into being: with a turnover of about euro        the usual markets of reference. Export has
channel.                                         60 million, more than 90% of which was           increased towards Eastern Europe (Russia,
In 1989 the Semi di Lino line was launched,      generated abroad.                                the Baltic countries and the Balkans, the
which was to be the first great commercial       Its international vocation was strengthened      former Soviet Republics), India, the Middle
success. The permanent coloring of Evolu-        in 2003 with the start of the activity in Chi-   East and Africa.
tion of the Color came the following year.       na. In 2008 work started on expanding            ALFAPARF GROUP, which has always con-
The adventure in export started in the           the sites in Italy, Mexico and Brazil. The       centrated on the professional channel, has
1990s, first with exports to Spain and Latin     Private Label project also started: this aims    made its debut in the retail channel in Bra-
America, then the establishment of the com-      to develop production on behalf of third         zil with the ALTA MODA E’… brand (Hair
mercial branches in Brazil, Mexico, Argen-       parties thanks to the Group’s expertise, in      Care), distributed in stores specialized in
tina and Venezuela. Production also started      particular in products for coloring.             products for hair, health stores and perfum-
with the first factories in Brazil and Mexico.   2009 was a historical year: the GTS              eries. The manufacturing capacity has in-
                                                 Group, founded at the end of the 1970s,          creased thanks to new plants in Argentina
                                                 which produced and distributed profes-           and Venezuela.
                                                 sional cosmetics and equipment for beauty         The organizational structure of the Group
                                                 salons, was taken over. In the global in-        has been remodeled through the creation
                                                 dustry of professional cosmetics, ALFAPARF       of two regional bodies: Americas and Eur-
                                                 GROUP is, by dimensions, the first compa-        asia/Africa/Oceania. The objective: to
                                                 ny with 100% Italian capital.                    accelerate global growth.

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                                 15
Organizational Structure
ALFAPARF GROUP is an Italian multinational corporation in the cosmetics industry, made
up of multiple companies that share the same objectives of quality, excellence and perfor-
mance, guided by common values and by solid expertise.

                                                         100%                          Junior S.r.l.                     60,96%
                      Roberto Franchina                                                  (Italia)

                                                        19,04%

                                                                                                       Alfa Parf Group S.P.A.
                                                                                                               (Italia)

                                                         4,76%

                                                         100%                           AB S.r.l.                        15,24%
                        Attilio Brambilla                                                (Italia)

16                                                                                                                                ALFAPARF GROUP • Report on Sustainability 2019
Delly                     Alfhair Ltd
   Dobos S.A. de C.V.             Kosmetic Ltda
       (Messico)                                                (Australia)
                                    (Brasile)
     Prod./Comm.                                                 Comm.
                                     Prod.
   99,999%                                                    100%
                                 99,94%

        Hel Cosm               Alfa Parf Middle East
                                                           Porta Nuova S.R.L.                                                             Beauty & Business S.P.A.
         S.P.L.C.                     DMCC
                                                             (S.Domingo)                                                                          (Italia)
        (Grecia)                   (Dubai -EAU)
                                                                 Comm.                                                                         Prod./Comm
         Comm.                        Comm.

       100%                        100%                       99,9%                                                                            100%

                                                                 Prodicos                                         Industrias Veprocosm
      Sabama Ltda                Alfa Parf UK Ltd                                     Cosmetic Services S.r.l.
                                                                  S.A.U.                                                   C.A.
       (Colombia)                    (Londra)                                                (Italia)
                                                               (Argentina)                                            (Venezuela)
         Comm.                        Comm.                                                   Serv.
                                                              Prod./Comm.                                                  Prod.
    99,85%                         100%                       100%                         100%                     99,55%

                                   Costa Rica                                                                    Prodob de Mexico S.A.                                                                          Cosmetica Chi.Cosm
         B.I.P. Inc.                                       Industrial Chemical            Percosm S.A.C.                                                             Maresana Lda                                                        Percosm S.A.C.
                              Cosméticos Cosdist SRL                                                                    de C.V.                                                                                         Ltd
         (U.S.A.)                                         Cosmetics Holding Ltd               (Perù)                                                                 (Portogallo)                                                            (Perù)
                                   (Costarica)                                                                         (Messico)                                                                                      (Cile)
          Comm.                                                 (Malta)                       Comm.                                                                    Comm.                                                                 Comm.
                                     Comm.                                                                           Prod./Comm.                                                                                     Comm.
       100%                        100%                       100%                    99,9996%                      99,80%                                     0,0007%                                              0,01               0,0004%

    Alfa Parf American              Alfa Parf             Delly Distribuidora de           Guatemala                                                                                    Prodob de Mexico S.A.                         Clio Cosmetics S.A. de
                                                        Cosméticos e Prestacao de                                    Alfa Parf Russia                        DIS.MAR Cosmetics C.A.                             Porta Nuova S.R.L.
 Division Distribution S.A.   Shangai Trading Co. Ltd                                 Cosmeticos S.A. de C.V.                                                                                  de C.V.                                          C.V.
                                                              Servicos Ltda                                              (Russia)                                 (Venezuela)                                     (S. Domingo)
        (Uruguay)                     (Cina)                                              (Guatemala)                                                                                         (Messico)                                    (El Salvador)
                                                                (Brasile)                                                 Comm.                                     Comm.                                             Comm.
          Comm.                      Comm.                                                   Comm.                                                                                          Prod./Comm.                                       Comm.
                                                                 Comm.
    99,99%                         100%                                                     80%                       100%                                           0,01%                 0,20%                    0,1%                      1%
                                                            98,93%

                                    Maresana             Alfa Parf SP distribuidora   Clio Cosmeticos S.A. de                                                  Delly Distribuidora de           Delly                                Guatemala Cosmeticos
  Alfa Parf Panama S.A.                                 de cosmeticos e prestacao                                DIS.MAR Cosmetics C.A.                       Cosméticos e Prestacao                               Sabama Ltda
                                       Lda                                                       C.V.                                                                                       Kosmetic Ltda                                 S.A. de C.V.
        (Panama)                                             de servicos LTDA                                         (Venezuela)                                de Servicos Ltda                                   (Colombia)
                                   (Portogallo)                                             (El Salvador)                                                                                     (Brasile)                                  (Guatemala)
          Comm.                                                   (Brasil)                                              Comm.                                        (Brasile)                                        Comm.
                                     Comm.                                                     Comm.                                                                                           Prod.                                        Comm.
                                                                  Comm.                                                                                               Comm.
       100%                   99,9993%                                                      99%                     99,99%                                                                 0,06%                  0,15%                     20%
                                                                90%                                                                                                  1,07%

    Alfa Parf Panama                Pol.Cosm                                                                                                                  Alfa Parf Group Espana           Dobos                                    Alfaparf American
                                                            Dea Project S.r.l.                                   Cosmetica Chi.Cosm Ltd
       Pacifico S.A.                Sp. Z.O.O.                                              E.Cos S.A.                                                                .S.L.U.               S.A. de C.V.            E.Cos S.A.       Division Distribution S.A.
                                                                (Italial)                                                (Cile)
        (Panama)                    (Polonia)                                            (ECcoumadmo.r)                                                              (Spagna)                (Messico)           (ECcoumadmo.r)             (Uruguay)
                                                                 Prod.                                                  Comm.
         Comm.                       Comm.                                                                                                                            Comm.                Prod./Comm.                                        Comm.
                                                                80%                         90%                     99,99%                                                                                           1%
       100%                        100%                                                                                                                              100%                 0,001%                                          0,01%

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                                                                                                                             17
The Italian parent company has adopted        BOARD               BOARD O                        AUDITING
a traditional model of Corporate Govern-      OF DIRECTORS        F AUDITORS                     FIRM
ance, with a clear-cut separation between
the management and the control functions.     ROBERTO FRANCHINA   ANDREA CASAROTTI               ERNST&YOUNG S.p.A.
In particular, the company is managed by      Chairman            Chairman
a Board of Directors, while the function of
vigilance is assigned to the Board of Audi-   ATTILIO BRAMBILLA   ALESSANDRO RICCI
tors. Both the managing bodies are elected    Deputy Chairman     Auditor
by the Shareholders’ Meeting.
                                                                  GIUSEPPE CALDESI VALERI
                                                                  Auditor

                                                                  FABIO GALLIO
                                                                  Alternate Auditor

                                                                  SIMONE FURIAN
                                                                  Alternate Auditor

18                                                                                          ALFAPARF GROUP • Report on Sustainability 2019
Business and brands
                                                                               Hair Care
ALFAPARF GROUP operates in hair and                                            Production and marketing
body care and bases its growth on solid                                        of products for hair coloring
skills, multiple research activities and on the                                and care
collaboration with hair-stylists of internation-
al level who, over the years, have taken the
brands all over the world.
Production takes place in the five manufac-
turing plants in Italy, Mexico, Brazil, Argen-
tina and Venezuela and the offer proposed
allows meeting professional demands of
various kinds and referred to different mar-                                                                   Retail
ket sectors, distributing its products in over     Skin Care                                                   Manufacture of products
100 different countries through its subsidiar-     Production and marketing                                    under the ALFAPARF brand,
ies. The ALFAPARF GROUP business can be            of products for body care                                   distributed through a close-
divided into four main Business Units: Hair        and of equipment for aes-                                   knit network of distributors
Care, Skin Care, Private Label e Retail.           thetic applications.                                        (professional channel and
                                                                                                               Mass Market) .
The efforts made over the years in the quest
for innovative and high quality products
have allowed many brands to assert them-
selves both on the Italian market and on
                                                                               Private Label
foreign markets: today the Group has 11
                                                                               Production of products
brands, four in the Hair Care Business Unit
                                                                               on behalf of third party
and seven in the Skin Care Business Unit.
                                                                               customers who sell their
                                                                               own products all over the
                                                                               world, taking advantage of
                                                                               the Group’s expertise.

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                      19
HAIR CARE

     Your Partner in Beauty.                            Created in Brazil to meet the needs of the
     Beauty has to be a source of pleasure: this        local population, today Yellow is a profes-
     is how it can also help face up to other chal-     sional brand distributed all over the world
     lenges in life.                                    that has made a name for itself thanks to
     ALFAPARF MILANO expresses a unique, hu-            formulas which optimally combine ad-
     man and independent point of view, created         vanced technologies and ingredients of
     thanks to its local presence. For 40 years,        natural origin. It is a line of products that
     ALFAPARF MILANO has been supporting                are easy to use and with an excellent qual-
     hairdressers with efficient services and prod-     ity-price ratio.
     ucts to help them in their business and offer
     people the chance to express themselves as
     they wish.
     The ALFAPARF MILANO product range is
     rich in diversified solutions for every require-
     ment: color, shape, treatment, styling and a
     men’s line. All the products are made with
     care, according to the principles of the AL-       This is a brand characterized by profession-
     FAPARF GROUP philosophy: Italian dyna-             al distribution (through hairdressing salons)
     mism, innovation and openness to diversity.        and retail distribution (through selected
                                                        chains of beauty stores) with an excellent
                                                        quality-price ratio.

     Launched in Brazil and today distributed in
     Central and South America, it is ALFAPARF
     GROUP’s first brand for Retail. On the
     strength of its professional technology, it
     offers products for hair care and coloring.

20                                                  ALFAPARF GROUP • Report on Sustainability 2019
SKIN CARE

The sun protection that offers a safe, even       The beauty secrets of TEN SCIENCE are the         The beauty solution for over forty years: tech-   With almost forty years of experience in
and long-lasting tan. SOLARIUM is the sun         result of the fusion between technology and       nological innovation, scientific research and     the professional beauty channel, ALFAPARF
care specialist in beauty salons: a wide          nature, raised to the level of science. A com-    experience come together to guarantee max-        GROUP develops and sells latest generation
range of protective products for all require-     plete and high-performing range of products,      imum efficiency through a made-to-measure         technologies and equipment for all the needs
ments, after-sun and tan intensifiers. The        made with the most precious natural ingredi-      method and program. DIBI MILANO is the            of a modern beauty salon. Design, develop-
brand stands out for high quality, the breadth    ents, combined through advanced technolog-        point of reference in professional beauty in      ment, production and assembly: completely
of the range and the originality of the style.    ical procedures. It is a brand that has made      terms of quality and innovation.                  Italian-made to ensure the best guarantees of
                                                  green minimalism its distinguishing feature,                                                        certification and quality for partners. In 2019
                                                  also thanks to the selection of ingredients and                                                     the innovative and productive capacity of AL-
                                                  its packaging with a low environmental im-                                                          FAPARF GROUP in medical equipment and
                                                  pact. The TEN Institutes are the brand’s pro-                                                       equipment for beauty salons was enriched by
                                                  fessional venues.                                 For over thirty years, face and body prod-        skills and reinforced with the acquisition of a
                                                                                                    ucts of high quality in beauty salons. A scien-   very dynamic and innovative local company
                                                                                                    tific approach, technology and results thanks     specialized in laser technologies.
                                                                                                    to a team of expert beauticians. BECOS
                                                                                                    stands out in the panorama of cosmetics as
                                                  DECODERM exceeds the limits of color              a brand that looks to fashion trends, con-
                                                  thanks to a line of make-up which knows           stantly projected towards innovation. The
                                                  the skin and designs the beauty of every          BECOS line was relaunched in 2018, in
                                                  woman, protecting her. The result of the          particular with a new image of the testimoni-     The professional and cosmetic, holistic and
                                                  perfect combination between Skin Care             al Francesca Sofia Novello and a proposal         sensory answer: in OLOS nature takes first
                                                  and make-up, it embodies the desire for           more in line with the brand’s professional        place, the mother of the most precious and
                                                  beauty, color and protection, thanks to the       specialization. The BECOS Clubs are plac-         effective active ingredients for the beauty of
                                                  combination between formulations with a           es where professionalism and personalized         the face and body as well as the source of
                                                  treatment action, textures, new generation        solutions can be found to start out on a path     inspiration of the product lines. It is a brand
                                                  applicators and a harmonious range of             towards beauty.                                   which looks to the future, where beauty is har-
                                                  shades.                                                                                             mony, balance and lifestyle.

ALFAPARF GROUP • Bilancio di sostenibilità 2019
                                                                                                                                                                                          21
Responsible governance
MODEL 231

The Organization and Management Model           From the methodological point of view, in         “Process ownership”, according to which
applies both to internal relations and to re-   2019, the Body of Vigilance also carried          each corporate process must report to a spe-
lations with those outside the company, with    out the activity of verification on the Special   cific person of reference, while the powers
the aim of avoiding the offences punishable     Part of the Model, especially through inter-      and responsibilities must be clearly defined
by Law 231 being committed.                     views with the subjects responsible for the       and acknowledged.
The decision of the ALFAPARF GROUP Board        important activities, with a dual purpose:        The training activity has been carried out
of Directors to have, on a voluntary basis,     - To make and obtain an overview of the           mainly following the adoption of the Model
an Organization and Management Mod-             concrete application of the operating princi-     231 and has differed in the content and in
el is part of the broader policy of raising     ples of the Model;                                the methods depending on the qualification
awareness on the transparent and correct        - To verify the presence and/or the appli-        of the addressees and the level of risk of
management of the company, in respect of        cation of formalized application procedures       the area in which they operate. In particu-
the current legislation and the fundamental     for the management of the processes, in           lar, two types of 231 training given can be
principles of business ethics in pursuing the   general, and for the application of the oper-     distinguished:
corporate purpose.                              ating principles of the Model, in particular.     • For the personnel operating in production;
To draw it up, the parent company mapped        Since the Model 231 has been adopted,             • For the personnel operating in the adminis-
the processes, highlighting the sensitive       100% of the contracts and agreements of           trative offices, with a particular focus on the
activities, the functions and roles directly    investment made by the Italian subsidiary         first corporate levels who have contributed
involved, and associating with the already      include a note which requires the signature       to raising awareness on the topics with re-
existing checks further new instruments –       of the company’s Code of Ethics and Model         gard to the whole structure.
such as new operating procedures – in           231. The pre-existing suppliers have been         The training, given
compliance with the requirements and the        informed that the Organizational Model            only to the personnel of the Italian branch,
new ISO standards for risk analysis and         231 has been adopted and they have been           is carried out periodically while the Code of
risk prevention.This Model, inclusive of the    asked to become familiar with it.                 Ethics has been translated and distributed to
Code of Ethics, forms an integral part of all   In relation to the topic of anti-corruption, a    all the employees, including of the foreign
the rules, procedures and systems of control    system of control is in place which assumes       branches.
developed by ALFAPARF GROUP, contrib-           the avoidance of cases of corruption or of
uting to defining an overall, structured and    any other significant offence. This system is
complete organizational framework aimed         based on some fundamental principles of
at preventing illegal behavior.                 control such as, for example, the so-called

22                                                                                                                                              ALFAPARF GROUP • Report on Sustainability 2019
INTERNAL AUDITING AND INTERNAL
CONTROL SYSTEM
The Internal Auditing in ALFAPARF GROUP           New checks were introduced in 2019, in
started in July 2016, through a start-up          particular:
of the function. In particular, the activity is   • Receivables Management with the aim of
carried out by the Italian subsidiary for all     harmonizing the processes and the opera-
the foreign manufacturing and commercial          tive times and improving the overdue trade
branches and concerns the main corporate          debts, the DSO and the activity of control of
processes, including:                             the credit controllers of the subsidiary. On
• Procurement                                     the basis of the checks made in 15 branch-
• Human resources                                 es, it was deemed necessary to develop a
• Administration, finance and control             Group Receivables Procedure, with the ob-
• Logistics                                       jective of harmonizing the process and the
• Quality control                                 controls on receivables.
• Health, safety and environment                  • Returns Management following the activity
• Commercial                                      carried out and seeing the differences found
Once the activities of verification have taken    in the controls on the customer returns, es-
place, the internal audit function produces,      pecially in the case of product returns of a
every six months, a report summarizing the        significant value, returns for breakage and/
results and the assessments assigned – both       or non-conformities of product or expired
at the level of the individual process and at     products, it has been deemed necessary to
the level of Italy/Group – relative to the ver-   implement a Management of Returns Proce-
ifications made.                                  dure to improve the management and imple-
In addition, in order to assess the Internal      ment new controls.
System of Control during the activity of con-     • Trade Commissions new controls have
trol and mapping, verifications are made on       been implemented in order to verify wheth-
the 231 points of control in the processes        er the commissions paid to the agents are
also managed by the foreign subsidiaries.         linked to effectively reaching the pre-set com-
                                                  mercial targets (sales and receivables).

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                    23
CERTIFICATIONS

The mission of ALFAPARF GROUP is to raise        The certifications obtained and renewed by      With the start of the Private Label Business      Amongst the 2019 goals, the Italian branch
the quality of the service offered by the pro-   the Italian branch, for the management of       Unit, the Italian subsidiary has been the ob-     has considered, in its Policy on quality, the
fessional operators (hairdressers and beauty     the various sectors of activity of the organ-   ject, over the years, of audits with respect to   application of the following aspects:
salons) through the application of an Inte-      ization, are:                                   some social, ethical and safety certification     • Identification of the risks and opportuni-
grated Management System, in order to                                                            programs on the request of some large cus-        ties and subsequent actions for the manage-
create synergies, integrate processes and                                                        tomers, through verification and evaluation       ment;
distinguish their specializations.                                                               in the field by international auditors with       • Approach of the Management System in
                                                 • UNI EN ISO 9001:2015                          respect to the following Standards: SME-          relation to the context of the organization;
                                                 Quality Management System (QMS)                 TA (Sedex Members Ethical Trade Audit),           • Internal and external factors, needs and
                                                                                                 SEDEX (Supplier Ethical Data Exchange) and        expectations of the parties concerned;
                                                                                                 SA 8000 (Corporate Social Responsibility).        • Engagement of the personnel;
                                                                                                 When the standard ISO 9001:2015 came              • Perspective of the life cycle of the prod-
                                                 • ISO 22716:2007 Cosmetics                      into force, the company adopted an ap-            uct/service provided;
                                                 Good Manufacturing Practices (GMP)              proach according to the risk/opportunity          • Management of the suppliers and of out-
                                                                                                 logic, through “Risk-Based Thinking”, which       sourcing.
                                                                                                 implies management based on the capacity          For the future, the Italian parent company
                                                                                                 of each member of the organization to take        has set itself the goal of keeping and re-
                                                 • UNI EN ISO 13485:2016                         decisions or undertake actions, including         newing the existing certifications and once
                                                 Medical Devices- Quality Management             thanks to an attentive assessment of the pos-     against sets itself the aim of obtaining the
                                                 System                                          sible – positive and/or negative – effects in     following certifications, to complete its Inte-
                                                                                                 the context considered.                           grated Quality Management System:
                                                                                                                                                   • ISO 14001:2015 – Environmental Man-
                                                                                                                                                   agement System;
                                                 • AEO (Authorized Economic Operator)                                                              • ISO 45001:2018 – Management Sys-
                                                 certification                                                                                     tem for health and safety in the workplace.
                                                 Authorization for customs simplifications                                                         .
                                                 AEO and of safety (AEOF)

24                                                                                                                                             ALFAPARF GROUP • Report on Sustainability 2019
PRIZES AND ACKNOWLEDGEMENTS

                                                  In 2019, ALFAPARF GROUP became one of the 10 quotable companies in the beauty
                                                  sector – and one of the 80 quotable companies at national level in the various sectors - iden-
                                                  tified by Pambianco. This acknowledgement is given to companies which prove they meet
                                                  key requisites in terms of administration, reputation and growth of its business.
                                                  For the fourth year running, ALFAPARF GROUP is also one of the first 100 largest cosmetics
                                                  manufacturers in the world (94th place) according to the ranking drawn up every year by the
                                                  online magazine Women’s Wear Daily, one of the most authoritative sources of information
                                                  in the sector. In the 2019 ranking, ALFAPARF GROUP is one of the five companies present
                                                  with Italian capital and the only one amongst those for the professional segment.

ALFAPARF GROUP • Bilancio di sostenibilità 2019
                                                                                                                                    25
DIALOGUE WITH THE STAKEHOLDERS

The stakeholders are all those who, in vari-       CUSTOMERS AND CONSUMERS                         LOCAL, NATIONAL AND                               HUMAN RESOURCES
ous ways, can influence or be influenced by        • Customer Service                              INTERNATIONAL INSTITUTIONS                        • Training programs and performance man-
the activities of ALFAPARF GROUP. They rep-        • Social networks                               AND NON-GOVERNMENTAL                              agement
resent the complexity of the organizational        • Sales channel as a channel for listening,     ORGANIZATIONS                                     • Focus groups and group coaching
reality, highlighting all the relations in which   intermediation and communication                • Participation in local and national trade       • Sharing the Code of Employee Conduct
the Group is continuously involved.                • Questionnaires                                organizations                                     and the Code of Ethics
The Report on Sustainability aims to meet          • Creation of work groups with teams of         • Participation in events such as conferenc-
the stakeholders’ needs for information on         hairdressers/beauticians                        es and similar, to share with third parties the   TRADE UNIONS/
the performances of the Group in the field                                                         corporate experience and the corporate sit-       TRADE ASSOCIATIONS
of sustainability and at the same time of pro-     LOCAL COMMUNITIES                               uation                                            • Meetings for periodical information on the
moting dialogue and the improvement of the         • Continuous relationship with the local au-                                                      Group’s situation
management and of the organization itself.         thorities and the communities to manage the     FINANCIAL INSTITUTIONS                            • Meetings for negotiations on corporate
The main categories identified, with which         environmental impact of the manufacturing       • Sharing the global scenarios of financial       and site topics
the Group interacts, and the relative ways         plants on the local systems                     markets
through which regular constructive dialogue        • Support activity in some initiatives of the   • Occasions of sharing the company’s per-
takes place, are:                                  local authorities in the social field           formances and development plans
                                                   • Sharing and collaboration on topics
SHAREHOLDERS                                       linked to the local area                        PRESS AND SOCIAL MEDIA
• Interviews and daily exchanges on corpo-                                                         • Relations with the local and international
rate management                                    SUPPLIERS                                       press
• Monthly Management Meetings                      • Periodic meetings with the suppliers and      • Participation in round tables
• Meetings, including on aspects linked to         visits in loco                                  • Social Networks
sustainability                                     • Sharing of the Suppliers’ Code of Con-
                                                   duct and of the Code of Ethics
                                                   • Periodic contacts for the definitions of
                                                   standards of quality

26                                                                                                                                               ALFAPARF GROUP • Report on Sustainability 2019
Economic sustainability
THE APPROACH                                                                                  DIRECTORS’ REPORT2

ALFAPARF GROUP pays particular attention       contributes to economic maintenance and        The Group closed 2019 with a turnover of €243.1 million, a growth of 2.6% compared
to the capacity of generating income and       development.                                   to 2018, and with an added value of €108.1 million (44.5% of the ordinary revenue).
work in the local systems where the Group      Therefore, combining as best as possible the
                                                                                              INCOME STATEMENT                                        31.12.2019       31.12.2018
operates, trying to produce and keep the       development of the human capital with the
                                                                                              Ordinary revenue                                        243,100,677      236,778,646
maximum of added value, effectively com-       development of relations with suppliers/cus-
                                                                                              Ebitda                                                    44,996,809       53,564,368
bining all the resources it uses, and devel-   tomers and the investments made generates
                                                                                              Ebitda %                                                        18.5%           22.6%
oping the specificity of local products and    a path of constant innovation which supports
                                                                                              Ebit                                                      33.039,306       26,429,701
services.                                      thew economic growth of the organization,
                                                                                              Ebit %                                                          13.6%           11.2%
In particular, the Group believes that its     making it solid and sustainable.
                                                                                              Financial charges                                         -5,085,209       -4,551,301
fundamental base for its economic devel-
                                                                                              Income before non-recurring items                        27,954,097       21,878,400
opment is the capacity to create innovation
                                                                                              Valuation adjustment to financial assets                       -6,216      -2,709.390
through an increasingly consolidated rela-
                                                                                              Extraordinary income/charges                                         -               -
tionship with its collaborators who, through
                                                                                              Ebt                                                       27,947,881       19,169,010
periods of training and “on the job” exper-
                                                                                              Ebt %                                                           11.5%            8.1%
imentation, make a significant contribution
                                                                                              Taxes of the year                                        14,985,652         7,216,591
to the generation of new products and the
                                                                                              Profit (loss) of the year                                12,954,913       11,952,415
improvement of the company’s manufactur-
                                                                                              Profit(loss) of third parties                                   7.316               4
ing capacity. The relationship with the sup-
                                                                                              NET INCOME                                              12,962,229       11,952,419
pliers with whom ALFAPARF GROUP tries
                                                                                              NET INCOME %                                                    5.3%            5.0%
to establish synergies, which derive from
the development of their investments with
the ideas and requirements of the Group,
thus obtaining new added value from the
products and services purchased, is not
negligible.
Last but not least, attention to investments
in technology, both of the tangible type
(machinery) and intangible (software), al-
lows obtaining a third dimension which                                                        2
                                                                                                  The data shown refer to the consolidated perimeter of the Group

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                                                          27
6,64%
                                                                                                                                              Remuneration of the Public Administration

DISTRIBUTION OF THE ADDED VALUE                                                                        2,25%
                                                                                                                                                              0,03%
2019                                                                                                   Remuneration of backers
                                                                                                                                                              Donations

The distribution of the added value is the point of contact between the economic profile     27,98%
                                                                                                                                                                          63,10%
and the social profile of the business of ALFAPARF GROUP and allows analyzing how the        Remuneration of the personnel
                                                                                                                                                                          Operating costs
wealth created is distributed to the whole socio-economic system with which the organiza-
tion interacts.

RECLASSIFICATION OF THE
INCOME STATEMENT                         31.12.2019                  31.12.2018
Revenue                                  243,100,677                 236,778,646
Other revenue                              3,908,062                   4,145,802                                                     € 225.581.410
Financial revenue                            753,596                   1,116,431                                                    ECONOMIC VALUE
Total economic value generated                                                                                                         DISTRIBUTED
by the Group                              247,762,335                 242,040,879
Operating costs                          142,332,900                 140,304,309
Remuneration of the personnel             63,118,549                  56,344,010
Remuneration of the backers                5,085,209                   4,551,301
Remuneration of the Public Administration 14,985,652                   7,216,591
External donations                             59,100                    117,755
Total economic value distributed
by the Group                              225,581,410                 208,533,966           In 2019, the Economic Value Generated, equal to €247.8 million, was mostly distributed
Economic value retained by the Group       22,180,925                  33,506,913           to the different stakeholders with whom ALFAPARF GROUP comes into contact in carrying
                                                                                            out its business, in the respect of the cost-effectiveness of the business and the expectations
                                                                                            of its stakeholders.
                                                                                            The Economic Value Distributed, equal to € 226 million, represents about 91% of the Eco-
                                                                                            nomic Value Generated which, as well as covering the operating costs borne during the
                                                                                            year, is used to remunerate the socio-economic system with which the Group interacts,
                                                                                            including the employees, the backers and the community, understood as donations made.
                                                                                            Lastly, the Economic Value Retained, about 9% of the Economic Value Generated, represents
                                                                                            all the financial resources dedicated to the economic growth and to the stability of the equity
                                                                                            of the corporate system.

28                                                                                                                                       ALFAPARF GROUP • Report on Sustainability 2019
SUPPLIERS

ALFAPARF GROUP controls the whole value           The three-year KISS project (2016-2019)
chain directly: from research and innovation      has also been implemented, which has led
to the production, sale and distribution of its   to a great change in the structure and in the
products all over the world, and it has an        internal processes of the function, identifying
operational system which allows identifying       the targets, the milestones and the funda-
the percentage of expenditure concentrated        mental key points which must characterize
on local suppliers, as well as the weight and     the Group’s Procurement function.
volume of the materials purchased.                The whole project is based on four main gui-
2016 was a turning point for the procure-         delines: three actions and one opportunity.
ment division. The Senior Management of
ALFAPARF GROUP, having considered the
continuous growth of the company and to
better face future challenges, decided to
create the Global Purchasing Department,
which, thanks to a totally dedicated team,
ensures a centralized strategic management
of procurement, guaranteeing a transparent
control, efficiency and constant coordination
with the local purchasing offices at the forei-
gn branches.

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                    29
Actions
BUY RIGHT                           BUY CHEAPER                     BUY LESS
• COMPETITIVE, TRANSPARENT          • FRAMEWORK CONTRACTS           • LESS CONSUMPTION
AND TRACEABLE OFFER                 WITH SELECTED SUPPLIERS         THANKS TO THE BETTER YIELD IN
                                                                    THE PRODUCTION PHASE
• ANALYSIS OF THE TCO AND           • GROUP PROCUREMENT OF
NOT ONLY OF THE PRICE               THE RAW MATERIALS WITH BETTER   • “MAKE OR BUY” (IN
                                    YIELD AND LOWER PRODUCTION      SOURCING)
• STANDARDIZATION OF THE            COSTS
PRODUCT                                                             • LESS OBSOLESCENCE OF
                                    • OPTIMIZATION OF THE           RAW MATERIALS
                                    QUANTITIES ORDERED

Opportunity
BEST PRACTICES
• IDENTIFICATION OF THE PRACTICES AMONGST THE DIFFERENT
SUBSIDIARIES

• SHARING AND IMPLEMENTING THE SAME ALL OVER THE WORLD

• CONSIDER THE PECULIARITIES OF THE INDIVIDUAL SITUATIONS

30                                                                                                  ALFAPARF GROUP • Bilancio di sostenibilità 2019
Ambito                 Temi materiali                  Gli standard            Perimetro degli impatti
                                                           di riferimento
                                                                                   Interno           Esterno

    Responsabilità         Salute, sicurezza               416-1                   Gruppo            Clienti
  di prodotto
The                       e soddisfazione
       driving force of this  initiative was also re- • Suppliers of the Group oriented             Fornitori
                                                                                                          to impro-
                          del cliente                                                               Enti e Istituzioni
aching the correct Total Cost of Ownership ving and standardizing the processes and
                          Prodotto, packaging
(TCO) which has allowed   e R&D
                                   monitoring, in an 301-1  301-2
                                                                                  Gruppo
                                                             an increase in qualified               Clienti
                                                                                             suppliers.
                                                                                                    Fornitori
increasingly effective and efficient way, the With the objective of greater transparency
purchase management            process, always ke- 417-1
                          Marketing                          and traceability Gruppo  of the wholeInvestitori
                                                                                                       purchasing
                          e comunicazione                                                           Clienti
eping the highest standard          of
                          responsabile   quality  of  the    process,   the Group       has modified   the purcha-
                                                                                                    Fornitori
products and the precision in deliveries.                    sing procedure at World level and,     Enti e thanks    to
                                                                                                            Istituzioni
The     main  advantages
  Responsabilità               obtained,
                          Consumi energetici thanks     to   the
                                                            302-1 long  portal3
                                                                                , itGruppo
                                                                                      has been possible
                                                                                                    Clienti to auto-
the    centralization and
  ambientale                  the actions underta- 302-4
                          e idrici                           mate the management of the orders,     Fornitorievalua-
                                                            303-1                                   Collettività
ken in recent years, have been:                              te the performance of the supply chain and,
                          Rifiuti                           306-1                 Gruppo            Clienti
• Greater added value obtained by the 306-2                  at the same time, have the lifeFornitori cycle of the
adoption of the Group’s best practices orders constantly monitored. Collettività
(Group benchmark); Biodiversità                              Thanks to the portal,
                                                            304-2                 Gruppoit is possible
                                                                                                    Clientito make
                          e animal testing
• Consolidation of expenditure             and aggre- comparisons on several levelsFornitori          and simula-
                                                                                                    Collettività
gation of volumes, with         consequent
                          Emissioni*
                                                 econo-      tions,
                                                            305-1
                                                                     in order  to    identify
                                                                                  Gruppo
                                                                                              and  select
                                                                                                    Clienti
                                                                                                             the best
mies of scale (in terms of greater discounts 305-2           suppliers; in addition, for each Fornitori
                                                                                                    type of order,
                                                                                                    Collettività
linked to greater volumes ordered);                          the actions and feedback requested                   from
•* Centralized    professional     skills (extension   of    each    commercial        partner
   il Gruppo ha deciso di rendicontare anche gli aspetti legati alle emissioni nonostante      can    be    defined,
know-how)
   il tema non and
                 sia “contamination”
                     risultato materiale    of dall’analisi
                                               the skills svolta.
                                                             such as confirmation of the quantities and
to the different branches (Group power);                     the date of delivery.
• Opportunities for synergies between the
branches;

3
    Portal of communication between the Italian branch
and its suppliers.

ALFAPARF GROUP • Report on Sustainability 2019
ALFAPARF GROUP • Bilancio di sostenibilità 2018                                                                           3111
EXPENDITURE ON LOCAL SUPPLIERS AND BY CATEGORY OF GOODS

Although the purchasing function is centralized under the Global Purchasing Department of     In 2019, ALFAPARF GROUP had relations with over 2,000 suppliers for a total of over €92
the Italian branch, Group procurement is carried out by favoring, at equal quality, perfor-   million of turnover, of which €86 million (93% of the total) with local and national suppliers,
mance and price, local and national commercial partners.                                      €4 million (4% of the total) with continental suppliers and €2 million (3% of the total) with
                                                                                              international suppliers.

ITALIA                                         ARGENTINA                                      BRAZIL                                            MEXICO
		                  % of tot.    % sul tot.    		                  % of tot.    % sul tot.    		                  % of tot.     % sul tot.      		                  % of tot.     % sul tot.
Localization          2019          2018       Localization          2019          2018       Localization          2019           2018         Localization          2019           2018
Local - Lombardy     62,3%         53,7%       Local - Argentina    59,2%         97,0%       Local - Brasile      94,4%          99,5%         Local - Messico        90%          82,1%
Italy                31,8%         32,2%       Continental          37,1%          3,0%       Continental            2,7%          0,3%         Continental            1,6%                -
Continental            5,6%        12,3%       Rest of the World      3,7%               -    Rest of the World      2,9%          0,2%         Rest of the World      8,4%         17,9%
Rest of the World     0,3%          1,8%

                    15,7%                                                                                     0,3%                                                  0,6%
                                                                      64,5%
                                                                                                                                                          20,7%
                                                                                                                         32,7%
       35,6%                24%                                                                                                                                            44,2%
                                                       2,3%
                                                                                                       47,8%
                                                         10,2%
                                                                                                                    19,3%                                       34,5%
                 24,7%                                             23%

   Components, Equipment,
Promotional products                             Promotional products                           Promotional products                               Promotional products
   Packaging                                     Packaging                                      Packaging                                          Packaging
   Raw materials                                 Raw materials                                  Raw materials                                      Raw materials
   Other uncoded materials and services          Uncoded services and materials                 Uncoded services and materials                     Uncoded services and materials

32                                                                                                                                           ALFAPARF GROUP • Report on Sustainability 2019
SELECTION OF THE SUPPLIERS

Ensuring the respect of human rights is a        All the commercial partners must have, as           2019 which comprises, on every first con-         In addition, preference is given to the pos-
very complex and highly topical challen-         the priority value of their activity, the respect   tact (request of offer) with a new supplier,      session of certifications such as ISO 14000
ge; the Italian branch adheres completely        of the individual and are obliged to provide        two main steps:                                   or similar and being clearly committed in fa-
to the Organizational Model 231/2001,            a written contract of employment and pay-           1. Sending a pre-qualification questionnai-       vor of sustainability, i.e. suppliers who show,
adopted on a voluntary basis in 2016, and        ment of social security for all employees, to       re, containing a series of ethical-social que-    as well as technical and operational skills,
in particular puts respecting and promoting      protect the psycho-physical integrity of their      stions, to assess, from as early as the first     their sensibility to social and environmental
human rights at the center of its activity.      collaborators, guarantee decent working             contact, the approach to these topics.            issues, without generating additional char-
This is why the Group fosters and encoura-       conditions and safe and healthy workpla-            2. Once the answers to the prequalification       ges for the customer.
ges commercial relations with partners that      ces, in the full respect of the legislation cur-    questionnaire have been assessed, there is
share the same values of ethical commitment      rently in force on providing health services,       the evaluation of the economic offer and,
and total respect for the local legislation in   prevention of injury and accidents in the           before proceeding with the first purchase
terms of working standards.                      workplace and protection of the workers.            order, a file of qualification must be comple-
                                                 ALFAPARF GROUP requires the commercial              ted with a series of questions of a technical
                                                 conduct of its suppliers to be compliant with       nature which aim at looking closely at the
                                                 all the laws and contractual conditions appli-      financial position of the individual supplier,
                                                 cable at international, national and local le-      the company organization, the certifica-
                                                 vel, as well as with the standards based on         tions they possess, the policies and activities
                                                 ILO conventions and on the ISO standards            existing on sustainable development and
                                                 on the child labor, safety and anti-corruption.     safety.
                                                 No supplier is taken into consideration un-         Only after having positively evaluated the
                                                 less they comply with the above; in addi-           answers is it possible to start a commercial
                                                 tion, in the contractual phase, all the new         relationship with the new supplier. The aim is
                                                 suppliers must sign the Organizational Mo-          to increasingly raise the level of knowledge
                                                 del according to Legislative Decree 231             of the commercial partners, including from
                                                 adopted by the Group, comprehensive of              the ethical-environmental point of view, plan-
                                                 the Code of Ethics.                                 ning a contextual increase of projects linked
                                                 To make the selection of suppliers even more        to sustainability in partnership with them.
                                                 effective, the new procedure of qualifying
                                                 suppliers came into force towards the end of

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                                                                       33
34
ALFAPARF GROUP • Bilancio di sostenibilità 2018                         29
                                                  ALFAPARF GROUP • Report on Sustainability 2019
INITIATIVES AND PROJECTS 2019

Below are listed the main initiatives pursued    This project aims to offer a great opportu-    UNDER CONSIGNMENT STOCK                           tion with suppliers, universities, start-ups and
in 2019 by the Global Purchasing Depart-         nity of sharing and training for the profes-                                                     research centers. Development and choice
ment, in collaboration with the different cor-   sional and personal improvement of each        From 2019, for the raw materials deemed           of product through an economic and envi-
porate functions and the foreign branches.       colleague.                                     strategic, under consignment stock was ac-        ronmental evaluation of the Life Cycle Cost.
                                                                                                tivated, which allowed obtained a series          Concrete solutions of circular economy.
YES, WE SHARE                                    GREEN PROJECTS - PACKAGING                     of advantages both from the commercial            - An inter-functional strategy to reformulate
                                                                                                point of view but also at environmental lev-      the corporate dynamics in green: sustain-
From September 2019, every two weeks             Following on the “Green yes or not?” pro-      el, thanks to the optimization of the logistics   ability as corporate responsibility, shared
internal meetings are held (using a CISCO        ject, in collaboration with the marketing      related to the purchasing processes.              and fueled by all the functions. Strategies
video conference system) between the pur-        department, the Purchasing Department has                                                        to involve internal customers in reaching the
chasing offices of the Italian, Brazilian and    completed some activities aimed at pursu-      GREEN TRAINING                                    sustainable development goals.
Mexican branches, during which important         ing the corporate objective of reducing the
subjects and best practices are shared.          environmental impact of some brands: the       In June 2019 a representation of the Pur-         CISCO POINT TO POINT
A person of reference (Champion) is ap-          explanatory leaflets were eliminated, with     chasing Office took part in the “Sustainable
pointed for each meeting. They may be            the consequent reduction of the amount of      Procurement Summit ’19”, during which the         In 2019, 20 branches all over the world
internal or external to the purchase division    paper used; the use of recycled aluminum       topic of Corporate Social Responsibility was      were equipped with a Cisco videoconfer-
and they are asked to prepare a presenta-        tubes (one supplier already approved and       discussed, through the experiences of some        ence system. The advantages of the video-
tion on a specific subject, considered useful    others under approval) and the use of recy-    companies. The main topics discussed are          conference include better collaboration be-
for the other colleagues as well. The subjects   cled cardboard boxes were introduced. For      shown below:                                      tween teams and a direct sharing of ideas,
dealt with can concern initiatives directly      the secondary packaging, the weight of the     - For a sustainable, transparent and safe         exactly as in face-to-face exchanges.
related to the purchase function or which,       plastic and cardboard was reduced, intro-      Supply Chain: purchasing and responsibly          By its very nature, the videoconference al-
in some way, can have an impact on the           ducing the use of recycled paper.              managing the supply chain, criteria of eval-      lows the teams to take part wherever they
procurement activity. From this point of view,   In addition, in July 2019, at the Osio Sotto   uation for the choice of suppliers and strat-     are and this entails a considerable reduction
wide space was given to GREEN projects,          site, the purchasing department, in collabo-   egies to involve them and commit them to          of flights and travel and greater closeness
with further study on the sector of recycling,   ration with two of the Group’s main suppli-    green dynamics.                                   and contact with the branches, creating
logistics and sustainability. The forthcoming    ers, organized a workshop on “Sustainable      - The Couple of the future: use of new tech-      greater involvement of the participants.
appointments, already scheduled, will main-      Procurement Packaging” on post-industrial      nologies to meet increasingly strict standards
ly concern sustainable purchasing projects       consumption recycled plastic.                  of sustainability. A vision that can be imple-
and Green messages.                                                                             mented through a relationship of collabora-

ALFAPARF GROUP • Report on Sustainability 2019
                                                                                                                                                                                    35
You can also read