Compagnie du Froid, S.A.

Harvard Business School Case #197-085

Case Software XLS-104

Copyright © 2010 President and Fellows of Harvard College. No part of this product may be
reproduced, stored in a retrieval system or transmitted in any form or by any means—electronic,
mechanical, photocopying, recording or otherwise—without the permission of Harvard Business
School.
Exhibit 2 French Region, 2009 Results

Profit Plan Actual

Volume Euros Price Volume
per unit
('000) ('000) ('000)
Sales Data
Sales ice-cream (volume in litres) 4,010 90.01% 17,879 € 4.46 4,618
Sales specialties (litres) 445 9.99% 3,661 € 8.23 405
Revenue from distribution - - -
Total Sales 4,455 21,540 5,023
Cost of Goods Sold
Cost ice-cream
Dairy ingredients (litres) 2,887 7,893 € 2.73 3,317
Other ingredients (100 gr.) 1,844 2,841 € 1.54 2,047
Labor (hours) 38.29 371 € 9.69 43.56
Cost specialties
Dairy ingredients (litres) 410 1,121 € 2.73 368
Other ingredients (100 gr.) 316 693 € 2.19 298
Labor (hours) 40.03 388 € 9.69 36.02
Total
Contribution margin 8,233
Other Costs
Supervision, energy, maintenance, ... 2,206
Depreciation 467
Operating margin 5,560
Selling and Administrative Expenses
Delivery expenses 861
Depreciation of trucks 507
Selling expenses 1,078
Advertising 1,141
Administrative salaries and expenses 788
Allocated central office expenses 158
Profits before Interest and Taxes 1,027
Identifiable Assets
Cash (average) 94
Accounts Receivable (average) 580
Plant and equipment (net of depreciation € 2,322) 4,713
Total identifiable assets 5,387
Conditions for tourism
Average summer temperature 29.8 °C 29.2° C

Actual Quantity Variance € 1,049.68 F

Actual Mix Variance € 14.19 U
Actual Price Variance € 460.75 U
Variable Cost Variance € 144.75 U
Fixed Cost Variance € 215.00 U
Temperature Variance € 257.52 F
Actual Variance Flex to Actual Quantity Flex to Actual Mix
Euros Price per
unit
('000)

20,005 € 4.33 2,126 F € 20,158.52 € 20,589.83

3,377 € 8.34 (284) U € 4,127.77 € 3,331.92
79 79 F
23,461 1,921 F € 24,286.29 € 23,921.75

9,142 € 2.76 (1,249) U € 8,899.34 € 9,068.61

3,186 € 1.56 (345) U € 3,203.22 € 3,153.76
438 € 10.06 (67) U € 418.30 € 422.06

1,015 € 2.76 106 F € 1,263.92 € 1,006.17

655 € 2.20 38 F € 781.36 € 653.53
362 € 10.05 26 F € 437.47 € 349.13
€ 15,003.61 € 14,653.25
8,663 430 F € 9,282.68 € 9,268.50

2,324 (118) U € 2,206.00 € 2,206.00

467 - € 467.00 € 467.00
5,872 312 F € 6,609.68 € 6,595.50
€ - € -
908 (47) U € 861.00 € 861.00
510 (3) U € 507.00 € 507.00
1,139 (61) U € 1,078.00 € 1,078.00
1,070 71 F € 1,141.00 € 1,141.00
810 (22) U € 788.00 € 788.00
193 (35) U € 158.00 € 158.00
1,242 215 F € 2,076.68 € 2,062.50

141 (47) U
634 (54) U
4,726 (13) U
5,501 (141) U
 Flex to Actual Price Flex to Variable Cost Flex to Fixed Cost Temperature Variance
Volume Euros

('000) ('000)

€ 20,005.00 € 20,005.00 € 20,005.00 4756.54 € 20,605.15

€ 3,377.00 € 3,377.00 € 3,377.00 417.15 € 3,478.31
€ 79.00 € 79.00 € 79.00 € 79.00
€ 23,461.00 € 23,461.00 € 23,461.00 € 24,162.46

€ 9,068.61 € 9,142.00 € 9,142.00 3,417 9416.26

€ 3,153.76 € 3,186.00 € 3,186.00 2,108 3281.58
€ 422.06 € 438.00 € 438.00 45 451.14

€ 1,006.17 € 1,015.00 € 1,015.00 379.04 1045.45

€ 653.53 € 655.00 € 655.00 306.94 674.65
€ 349.13 € 362.00 € 362.00 37.10 372.86
€ 14,653.25 € 14,798.00 € 14,798.00 € 15,241.94
€ 8,807.75 € 8,663.00 € 8,663.00 € 8,920.52

€ 2,206.00 € 2,206.00 € 2,324.00 2,324

€ 467.00 € 467.00 € 467.00 467
€ 6,134.75 € 5,990.00 € 5,872.00 € 6,129.52

€ 861.00 € 861.00 € 908.00 908

€ 507.00 € 507.00 € 510.00 510
€ 1,078.00 € 1,078.00 € 1,139.00 1139
€ 1,141.00 € 1,141.00 € 1,070.00 1070
€ 788.00 € 788.00 € 810.00 810
€ 158.00 € 158.00 € 193.00 193
€ 1,601.75 € 1,457.00 € 1,242.00 € 1,499.52
Exhibit 4 Spanish Region, 2009 Results

Profit Plan Actual

Volume Euros Price Volume
per unit
('000) ('000) ('000)
Sales Data
Sales ice-cream (volume in litres) 3,685 90.01% 16,294 € 4.42 3,575
Sales specialties (litres) 409 9.99% 3,330 € 8.14 400
Total Sales 4,094 19,624 3,975
Cost of Goods Sold
Cost ice-cream
Dairy ingredients (litres) 2,653 6,923 € 3.18 2,175
Other ingredients (100 gr.) 1,769 2,670 € 1.84 1,450
Labor (hours) 34.37 279 € 9.55 29.21
Cost specialties
Dairy ingredients (litres) 381 994 € 2.75 362
Other ingredients (100 gr.) 299 633 € 2.30 275
Labor (hours) 37.09 301 € 8.67 34.73
Contribution margin 7,824
Other Costs
Supervision, energy, maintenance, ... 2,145
Depreciation 391
Transfer from France -
Operating margin 5,288
Selling and Administrative Expenses
Delivery expenses 736
Depreciation of trucks 413
Subcontracted transportation -
Selling expenses 827
Advertising 1,406
Administrative salaries and expenses 620
Rent 100
Allocated central office expenses 158
Profits before Interest and Taxes 1,028
Identifiable Assets
Cash (average) 94
Accounts Receivable (average) 423
Plant and equipment (net of depreciation €1,669) 4,764
Total identifiable assets 5,281
Conditions for tourism
Average summer temperature 30.2° C 28.5° C

Actual Quantity Variance € 2,362.68 U

Actual Mix Variance € 1,803.01 F
Actual Price Variance € 306.34 U
Variable Cost Variance € 1,966.00 F
Fixed Cost Variance € 2,277.00 U
Temperature Variance € 267.72 F
Actual Variance Flex to Actual Quantity Flex to Actual Mix
Euros Price
per unit
('000)

15,507 € 4.34 (787) U € 15,820.38 € 15,807.61

3,251 € 8.13 (79) U € 3,233.21 € 3,256.72
18,758 (866) U € 19,053.59 € 19,064.34

5,607 € 2.58 1,316 F € 8,199.01 € 6,923.00

2,202 € 1.52 468 F € 3,162.72 € 2,670.00
238 € 8.15 41 F € 318.74 € 279.00

933 € 2.58 61 F € 1,015.76 € 994.00

571 € 2.08 62 F € 797.15 € 633.00
283 € 8.15 18 F € 98.88 € 301.00
8,924 1,100 F € 5,461.32 € 7,264.34

2,166 (21) U € 2,145.00 € 2,145.00

391 - € 391.00 € 391.00
2,126 (2,126) U - -
4,241 (1,047) U € 2,925.32 € 4,728.34

758 (22) U € 736.00 € 736.00

424 (11) U € 413.00 € 413.00
77 (77) U - -
786 41 F € 827.00 € 827.00
1,408 (2) U € 1,406.00 € 1,406.00
644 (24) U € 620.00 € 620.00
100 - € 100.00 € 100.00
193 (35) U € 158.00 € 158.00
(149) (1,177) U € (1,334.68) € 468.34

98 (4)
266 156
4,837 (73)
5,201 80
 Flex to Actual Price Flex to Variable Cost Flex to Fixed Cost Temperature Variance
Volume Euros

('000) ('000)

€ 15,507.00 € 15,507.00 € 15,507.00 3682.25 € 15,972.21

€ 3,251.00 € 3,251.00 € 3,251.00 412 € 3,348.53
€ 18,758.00 € 18,758.00 € 18,758.00 € 19,320.74

€ 6,923.00 € 5,607.00 € 5,607.00 2,240 € 5,775.21

€ 2,670.00 € 2,202.00 € 2,202.00 1,494 € 2,268.06
€ 279.00 € 238.00 € 238.00 30 € 245.14

€ 994.00 € 933.00 € 933.00 372.86 € 960.99

€ 633.00 € 571.00 € 571.00 283.25 € 588.13
€ 301.00 € 283.00 € 283.00 35.77 € 291.49
€ 6,958.00 € 8,924.00 € 8,924.00 € 9,191.72

€ 2,145.00 2,145 2,166 € 2,166.00

€ 391.00 391 391 € 391.00
- € 2,126.00 € 2,126.00
€ 4,422.00 € 6,388.00 € 4,241.00 € 4,508.72

€ 736.00 € 736.00 € 758.00 € 758.00

€ 413.00 € 413.00 € 424.00 € 424.00
- - € 77.00 € 77.00
€ 827.00 € 827.00 € 786.00 € 786.00
€ 1,406.00 € 1,406.00 € 1,408.00 € 1,408.00
€ 620.00 € 620.00 € 644.00 € 644.00
€ 100.00 € 100.00 € 100.00 € 100.00
€ 158.00 158 € 193.00 € 193.00
€ 162.00 € 2,128.00 € (149.00) € 118.72
Exhibit 1 Examples of Standards for the 2009 Profit Plan (Spanish Region)

Standards Spain
Percentage of volume from specialties 10%
Selling prices (in Euros)
Ice-cream (per litre) 4.42
Specialties (per litre) 8.13
Manufacturing costs (in Euros)
Dairy ice-cream (per litre) 2.61
Other ingredients ice-cream (sugar, flavor, etc. per 100 grams) 1.51
Other ingredients specialties (sugar, flavor, etc. per 100 grams) 2.12
Labor (wage per hour) 8.13
Labor hours ice-cream (litres per hour) 107.20
Labor hours specialties (litres per hour) 11.04
Volume
Dairy ingredients—ice-cream (% of volume) 72%
Other ingredients—ice cream (grams per litre) 48
Dairy ingredients—specialties (% of volume) 93%
Other ingredients—specialties (grams per litre) 73
Exhibit 3 Italian Region, 2009 Results

Profit Plan Actual Variance

Volume Euros Volume Euros
('000) ('000) ('000) ('000)
Sales Data
Sales ice-cream (volume in litres) 2,453 10,967 2,480 11,106 139 F
Sales specialties (litres) 272 2,232 276 2,253 21 F
Total Sales 2,725 13,199 2,756 13,359 160 F
Cost of Goods Sold
Cost ice-cream
Dairy ingredients (litres) 1,864 4,963 1,895 4,986 (23) U
Other ingredients (100 gr.) 1,275 1,885 1,296 1,932 (47) U
Labor (hours) 33.10 300 36.03 328 (28) U
Cost specialties
Dairy ingredients (litres) 259 689 257 676 13 F
Other ingredients (100 gr.) 196 425 197 430 (5) U
Labor (hours) 24.24 220 23.29 212 8 F
Contribution margin 4,717 4,795 78 F
Other Costs
Supervision, energy, maintenance, ... 1,142 1,135 7 F
Depreciation 109 109 -
Operating margin 3,466 3,551 85 F
Selling and Administrative Expenses
Delivery expenses 329 315 14 F
Depreciation of trucks 198 198 - U
Selling expenses 314 344 (30) U
Advertising 1,328 1,288 40 F
Administrative salaries and expenses 558 574 (16) U
Rent 122 122 -
Allocated central office expenses 158 193 (35) U
Profits before Interest and Taxes 459 517 58 F
Identifiable Assets
Cash (average) 94 108 (14)
Accounts Receivable (average) 377 357 20
Plant and equipment (net of depreciation € 3,200) 2,763 2,764 (1)
Total identifiable assets 3,234 3,229 5
Conditions for tourism
Average summer temperature 29.7° C 29.8° C
Exhibit 5 2009 Ice-cream Transfers between France and Spain

Ice-cream
Cost of Total (in '000
ingredients Cost per litre Euros)
Volume transferred (in '000 litres) 603
Actual Costs (in Euros)
Dairy Ingredients 2.76 1.98 1,194
Other Ingredients 1.56 0.69 416
Labor 0.09 0.09 57
Allocated Fixed Costs (in Euros)
Other costs 0.46 279
Depreciation 0.09 56
S&A expenses 0.04 23
5% profit margin 0.17 101
Total transfer price 3.53 2,126
Exhibit 6 Historical Data—Temperature and Sales Volume

France
Year Temperature Sales Volume Volume Growth
(degrees Celsius) ('000 litres)
1995 27.7 1,344
1996 29.2 1,435 6.7%
1997 28.4 1,484 3.4%
1998 30.9 1,714 15.5%
1999 32.9 2,031 18.5%
2000 27.3 1,984 -2.3%
2001 30.0 2,208 11.3%
2002 30.5 2,489 12.7%
2003 30.8 2,761 10.9%
2004 30.0 2,998 8.6%
2005 29.7 3,216 7.3%
2006 30.3 3,445 7.1%
2007 29.6 3,797 10.2%
2008 29.4 4,087 7.6%
2009 (budget) 4,455 9.0%
Average 29.8 °C 9.1%

Spain
Year Temperature Sales Volume Volume Growth
(degrees Celsius) ('000 litres)
1995 30.8 1,069
1996 31.2 1,272 18.9%
1997 29.0 1,402 10.2%
1998 31.6 1,685 20.2%
1999 29.8 1,852 9.9%
2000 28.3 2,006 8.3%
2001 28.0 1,964 -2.1%
2002 27.5 2,033 3.5%
2003 29.9 2,231 9.8%
2004 30.4 2,481 11.2%
2005 31.8 2,684 8.2%
2006 32.4 3,036 13.1%
2007 30.4 3,346 10.2%
2008 31.0 3,722 11.3%
2009 (budget) 4,094 10.0%
Average 30.2 °C 10.2%

Italy
Year Temperature Sales Volume Volume Growth
(degrees Celsius) ('000 litres)
1999 32.2 892
2000 30.4 1,036 16.1%
2001 28.6 1,143 10.3%
2002 31.8 1,434 25.6%
2003 28.1 1,508 5.1%
2004 28.2 1,639 8.7%
2005 29.0 1,771 8.0%
2006 28.3 1,872 5.7%
2007 30.1 2,090 11.7%
 2008 30.0 2,433 16.4%
2009 (budget) 2,725 12.0%
Average 29.7 °C 12.0%