Cosun: Recovery in volume and price development and new strategy good base towards 2025

10 February 2022

Cosun: Recovery in volume and price development and new strategy good base towards 2025

Royal Cosun presents preliminary results for 2021.

The consolidated turnover for Cosun in 2021 increased to €2,287 million (2020: €2,029 million). The increase of 13% was primarily driven by a positive price development (3%) and volume growth (10%). All business units contributed to this improvement.

These favourable developments could not have materialised fully with a better group result. For the second year in a row, COVID-19 had a significantly negative effect on Aviko in particular. The significant increase in sales during the third quarter inspires confidence in the further recovery of volume development at Aviko following the lifting of government measures for the food service sector. Cosun Beet Company achieved a slightly higher result thanks to a higher sugar price. During the second half of the year, all Cosun business units faced substantial price increases, especially for energy and transport. This high inflation will present a sizeable new challenge for 2022.

The underlying result excluding exceptional items improved by 32% compared to 2020. Including the exceptional items resulting from the depreciation of assets caused by disappointing results and the implementation of the new strategy, the operating result before the members’ bonus was paid decreased from €89 million in 2020 to €43 million in 2021. Conversely, in 2020, exceptional items contributed positively to the result. The operating result before depreciation and members’ bonus (EBITDA) increased by 5% from €202 million in 2020 to €213 million in 2021. The members’ bonus comprised €47 million (2020: €42 million).

New strategy Unlock25

Cosun’s mission is to unlock the full potential of plants in a transparent and circular way and to convert this potential into valuable, plant-based solutions – The Plant Positive Way. In doing so, Cosun is responding to societal challenges associated with climate change and the replacement of fossil raw materials, the protein transition and the increasing demand for food products and healthier food ingredients. The Plant Positive Way is based on nearly 125 years of Cosun history in the successful value enhancement of arable crops such as sugar beets, chicory and potatoes in a diverse portfolio of products with added value.

Cosun also announced today its new strategy for now until 2025 – Unlock25. This integral strategy with clear choices and ambitious goals aims to further improve and safeguard the future-proofness and earnings model of Cosun for the future. Unlock25 builds further on a solid foundation and focuses on three strategic priorities:

  1. Improvement of results in the short and medium term
  2. Profitable growth in four core areas
  3. A future-proof, sustainable chain

In the core areas, Cosun aims to achieve a maximum value enhancement of sugar beets and growth in the added value of potato products in Europe and China. The third focal area is plant proteins, dietary fibres such as inulin and biobased resources that contribute to the transition in the Cosun portfolio to ‘green’ (climate-friendly) and health-promoting alternatives. This growth will take place both autonomously and through innovation and strategic partnerships. Finally, a growth in co-products in animal feed and bio-digestion is also being pursued. Co-products constitute a circular source for innovations in the core areas.

Explanation of 2021 business unit results

The Cosun Beet Company closed the year with a higher result compared to the previous year. Higher sugar prices, as well as the use of green gas, bioethanol and pulp, resulted in a higher turnover. Rising prices for additives and energy during the second half of the year had a negative impact on the result. In 2022, high energy prices will once again present a challenge. In line with the new Cosun strategy to extract more value from plants, the Cosun Beet Company is working on various initiatives to meet the sharply rising demand for biobased alternatives from sugar and sugar beets for markets like personal care (cosmetics and personal care products) and home care (detergents and cleaning agents). With the sale of the final section of the site in Puttershoek and construction of the Cosun Solar Park, the repurposing of the site of the former sugar factory is now a reality.

Aviko achieved an improved result compared to 2020, although still lower compared to previous years due to lower sales of fries and potato products as a result of the Covid-19 government restrictions imposed on the food service sector. During the third quarter of 2021 – between the two lockdowns – sales increased considerably, which inspires confidence for a good recovery in 2022 once the government restrictions for restaurants and cafés are lifted. The significant increase in prices for energy and additives also present a significant challenge at Aviko in terms of the expected result for 2022. The construction of the factory in Poperinge in Belgium is proceeding according to plan and the factory is expected to operational in the first half of 2022.

Sensus achieved a significant result improvement compared to 2020 as a result of increasing demand and a favourable price development. The highly disappointing chicory harvest and inulin yield from the 2020 harvest period weighed on the available sales volume in 2021. The 2021 harvest resulted in a significantly better yield. A capacity expansion at the Roosendaal factory will enable Sensus to meet increasing customer demand.

The Duynie Group and its Duynie Feed and Agri Bio Source divisions achieved an improved result in 2021. The start-up of the new ingredients factory in Cuijk weighed on the Duynie results for the second year in a row. An exceptional depreciation for these activities took place.

In 2021, SVZ achieved a higher positive result than in 2020 through significant turnover growth in Europe driven by strong growth in the volumes of purée and juices. Turnover growth was also achieved in the U.S. The prospects for 2022 are positive thanks to additional sales and the recent new innovations.

At the end of 2021, in line with its strategy aimed at plant proteins, Cosun successfully introduced a protein isolate made from fava beans. Protein innovations from beet leaves and co-products continue to be developed. Collaboration in partnerships with, for example, Green Protein Excellence Center and Fascinating, strengthen Cosun’s position in the development of plant proteins. Plans for further growth are expected to be implemented in 2022.

Beet price 2021: slight increase compared to last year

The basic price remained the same at € 32.50 per tonne of beet. The members’ bonus increased to € 7.50 per tonne of beet (2020: € 7.00).

For the standard quality quota beet (sugar content of 17% and extractability rate of 91), the beet price per tonne was € 40.00 (basic price of € 32.50 + € 7.50 members’ bonus). In 2020, this standard beet price was € 39.50 (basic price of € 32.50 + €7.00 members’ bonus).

The price of beets of average quality in 2021 was € 38.91 compared to € 35.60 in 2020. This slightly higher price is the result of a higher members’ bonus of € 7.50 (2020: € 7.00) and a higher sugar content and extractability rate. Due to a healthier leaf system in spite of a cold spring and gloomy, wet summer, followed by favourable weather conditions in the autumn, the average sugar content in 2021 was 16.73% (2020: 16.11%) and the extractability rate also improved to 90.74 (2020: 89.4).

The price for surplus beets of standard quality was set at € 27.50 per tonne (2020: € 24.50). With average quality, the price ended up at € 26.75 (2020: € 22.07) per tonne. The yield for the 2021 season in the Netherlands was 13.8 tonnes of sugar per hectare (2020: 13.2 tonnes). For growers, the average financial yield per hectare in 2021 ended up at € 3,129 (2020: € 2,901).

The table below presents an estimate of the Dutch sugar beet crop and production in 2021 compared to 2020.

    2021 2020
Beets Processed     [in tonnes] 6,797,000 6,840,000
Beet Sugar Content  [in %] 16.7 16.1
Extractability  [index] 90.7 89.4
Beet Sugar Production  [in tonnes] 1,137,000 1,089,000

 

The figures in this press release have not been verified by the external auditor and this press release does not constitute a publication as intended in Article 2:395, Section 2 of the Dutch Civil Code. Cosun will publish its final results for 2021 on the website www.cosun.com in April.

 

For more information please contact

Royal Cosun
Corporate communication
T (076) 530 32 42
E corporate.communication@cosun.com

 

 

 

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