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Cosun: lower 2015 result, better than expected

11 February 2016
In 2015 Royal Cosun achieved a lower result than in 2014, but it was still better than expected. The decline can basically be attributed to the considerably lower sales prices of sugar in the EU. The result of the other activities further increased in 2015. This all results in a beet price of €43.01 per tonne of delivered beets.
The low sugar prices will be carried over into the group result of 2016.
Provisional 2015 results
The consolidated turnover arrives at €2 billion (2014: €2.1 billion). The operating result dropped to €59 million (2014: €110 million). Net result is projected at €46 million. In 2014 this was still €79 million.
All activities made, in relation to occasionally difficult market conditions, a good contribution to the result.
The turnover of Suiker Unie declined significantly as a result of the historically low sugar prices within the EU. Thanks to its good cost price and market position the company did realise a considerably lower but relatively still good result. The Dutch sugar factories performed well during the entire campaign. Anklam (Germany) also ran a fine campaign and contributed to the result.
Aviko was able to further improve the result in 2015, also thanks to higher sales at good prices. The sales of potato specialties and French fries increased, also due to more export to Asia.
As a result of margin pressure in the Chinese market the result of the granulate and flake activity slightly lagged behind that of the previous year.
Sensus showed a lower result than in 2014 when it could take advantage of one-off revenue. The sales of inulin increased but due to increasing competition the sales prices are under pressure. The 2015 chicory campaign went well, the quality of the produced inulin remained stable during the entire campaign.

SVZ booked nearly the same result as in 2014. In Europe better and in the US slightly worse results were realised. The demand for fruit juices decreased somewhat whilst that for vegetable-based juices actually increased.
One of the factories in Poland was closed and a part of the production was relocated at the nearby establishment in Tómaszow.
Duynie did well right down the line. A better margin was realised with a lower volume. The sales to biomass digesters increased and the starch activity was also on the rise. The integration of earlier acquisitions and streamlining of the support departments again contributed to a further reduction of the costs.
President & CEO Robert Smith: “In a year like 2015 we were, with our five activities, able to properly deal with the volatility in the various markets. As intended, we thus created a solid foundation for our result. This way we created a stable basis for the group and for the beet price after 2017.”
Development and innovation
Cosun intends to continue growing, in the existing and in new activities with which our vegetable raw materials can further be capitalised. Examples are green gas from biomass that is not suitable for foodstuffs, an inulin derivative for detergents and cleaning agents, and BetaFib®, a microfiber from beet pulp.
In 2015, also departing from the ambition to grow through innovation as well, Cosun started the construction of a new innovation centre at the premises of Agro & Food Cluster Nieuw Prinsenland. This is expected to be commissioned after the summer of 2016.
Beet price in 2015
The beet price consists of the minimum EU price, the members’ bonus, and sugar content and other payments. A price of €43.01 per tonne (2014: €50.18) was determined for quota beet delivered in the 2015 campaign, at an average extractability and an average sugar content.
In the 2015 season a yield of 13.9 tonnes of sugar per hectare was realised. That is less than in the 2014 record year, but still good. In the campaign, which lasted 99 days in the Netherlands, a total of 790,000 tonnes of sugar was produced. Because of the large sugar production in the 2014 campaign approximately 190,000 tonnes of sugar were carried forward with which the first quota sugar of the past campaign had already been produced. Due to the lower beet price the average financial yield per hectare for the grower in 2015 was €3,301 (2014: €4,354).
Dirk de Lugt, Chairman of the Board: “We are pleased with the result of the past year and the fact that Cosun can, also with a historically low sugar price within the EU, pay a reasonable beet price to its members.”
The following table provides an overview of the Dutch beet harvest and beet sugar production over 2015 compared to that over 2014 (between brackets):
Beets processed [in tonnes] 4,878,000 (6,866,000)
Sugar content beet [in %] 16.7 (16.7)
Extractability [index] 90.9 (91.2)
Total sugar production [in tonnes] 790,000 (1,125,000)
In April Cosun will publish its definitive figures for 2015 on the website www.annualreport-cosun.com