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Preliminary results 2012

14 February 2013
Cosun's strategy bearing fruit. Cosun can report an excellent financial result for 2012, with all business activities making a positive contribution. The result is the fruit of the strategic choices taken and consistently implemented in recent years. High sugar prices in 2012 also contributed to the result.
 
'Cosun is aiming for the highest financial yield per hectare in the EU for our members/beet growers. The Dutch sugar industry succeeded extremely well in this ambition in 2012 thanks to the highest sugar production per hectare in the EU and the beet price set for the year. Our aim is to repeat this excellent performance in the years ahead, although we are aware that bigger swings in prices, especially sugar prices, will have a direct impact on our results,' explained the Chairman of Cosun's Board, Jos van Campen.
 
Results for 2012
At €1.9 billion, consolidated turnover will be about 10% higher than in 2011. Cosun's operating profit will amount to €193 million. Virtually all activities made a good contribution to profit. The operating profit is considerably higher than in 2011 (€137 million).
 
At Suiker Unie (sugar) both turnover and profit increased sharply. Sugar prices in the EU rose further in 2012. Prices on the world market for sugar and sugar by-products were also firm. The factories reported high production volumes, thanks in part to the investments made in efficiency and additional capacity. 2012 was the first year in which a thick juice campaign was held in the Netherlands and the year in which the second biomass digester was taken into operation (in Vierverlaten).
 
Aviko (potato products) had an excellent year. Sales of chipped potatoes rose sharply outside Europe. In the European market, sales of specialities were higher and better results were earned on granules and flakes (Rixona).
 
Sensus (inulin) reported a slightly lower profit than in 2011 but saw its sales rise, particularly in North America. Demand for inulin as an ingredient for baby formulas and products for health-conscious consumers is still rising.
 
SVZ (fruit and vegetable purees and concentrates) recovered further in 2012. Operating profit was higher and the group took the next steps to improve its competitiveness in Europe, including a decision to terminate production in the Netherlands. Mondi Foods, with locations in Belgium and Poland, was acquired and integrated into SVZ. The activities in the US performed positively.
 
Duynie (animal feed and starch applications) has been an autonomous group within Cosun since spring 2012. It achieved higher sales and turnover but its results were poor on account of the greater pressure on margins in comparison with 2011. The group's activities are a perfect complement to Cosun's mission to extract the greatest value from its vegetable raw materials.
 
Growth strategy
Cosun intends to grow further in its core activities and has identified opportunities inside and outside the current product/market combinations. The use of vegetable raw materials in innovative applications, including non-food applications, offers new openings.
 
President and CEO Robert Smith said: 'We have decided to focus on the sustainable processing of vegetable raw materials into products and ingredients for foodstuffs, animal feed, non-food applications and renewable energy. This decision has led to the current portfolio of five business groups: Aviko, Duynie, Sensus, Suiker Unie and SVZ. We want to grow further in each of these activities, both organically and through acquisition. Cosun knows how to improve the cultivation of biomass (the vegetable raw material), how to process it in a series of steps in biorefineries (about nine million tonnes a year), how to manage the associated incoming and outgoing logistics flows and how to develop tailor-made services for the buyers of our components. Thanks to this know-how, innovation and our healthy financial position, we have been able to grow in a changing market.'
 
Beet price for 2012
A beet price of €68.80 per tonne (2011: €55.69) is payable in respect of quota beet with average extractability and average sugar content. The beet price is made up of the EU minimum price, the members' bonus and the sugar content and other payments. The price payable for surplus beet is €31.39 per tonne (2011: €28.93).
 
Crop growth was on the whole good. Following a very early sowing season, the spring was relatively cold and the summer was below average, especially in July and August. The autumn was normal to slightly better than normal. The relatively warm and wet autumn meant the increase in sugar content was below average. In many cases the harvest was disrupted by heavy rainfall. The sugar yield per hectare was 13.5 tonnes (the third highest yield per hectare after 2009 and 2011). These outcomes lifted the average financial yield for the growers to €4,871 per hectare (2011: €4,044).
 
The table below shows the Dutch sugar beet harvest and beet sugar production figures for 2012 in comparison with 2011 (between brackets):
 
Beet processed (in tonnes)              5,772,000          (5,845,000)
Beet sugar content (as a %)                       17.1                   (17.0)
Extractability (index)                                      91.4                   (91.7)
Total sugar production (in tonnes)      969,000             (999,000)        
 
Cosun will publish its definite figures for 2012 via de website www.cosun.com in the course of March.