11 February 2021
Royal Cosun closed 2020 with a slightly higher group result than in 2019.
The result was the outcome of the wide-ranging impact of the COVID-19 pandemic on the business groups in an exceptional year. Lockdowns exerted pressure on Aviko’s turnover in the foodservice channel, whereas other business groups benefited directly or indirectly from higher sales in the retail channel. Cosun Beet Company booked a positive result thanks to slightly firmer sugar prices and its ability to meet the high demand for bio-ethanol to make disinfectants. The group result was also boosted by both cost savings and non-recurring income. Despite the turbulent year, Cosun will pay its members a slightly higher bonus per tonne of beet than in the previous year.
On account of the COVID-19 pandemic, consolidated turnover was slightly lower at € 2,029 million (2019: € 2,046 million). In the circumstances, Cosun Beet Company realised a satisfactory result, underpinned by slightly firmer sugar prices and high demand for bio-ethanol. Aviko’s turnover in the foodservice channel came under strong pressure as a direct consequence of the lockdowns. SVZ, Sensus and Duynie Group reported higher turnover. 2020 also saw the roll-out of the strategy Cosun developed in 2019 and was characterised by a series of investments and acquisitions by the business groups that contribute to sustainable growth and the further development of biobased solutions for food and food ingredients.
The operating profit before the members’ bonus increased from € 63 million in 2019 to € 89 million in 2020. Operating profit before depreciation, amortisation and the members’ bonus (EBITDA) rose from € 179 million in 2019 to € 202 million in 2020. The members’ bonus distributed to the growers amounts to € 42 million (2019: € 39 million).
Cosun Beet Company benefited from a gradual rise in European sugar prices in the first half of 2020 in response to the tight market conditions in 2019. The pandemic led to a slight reduction in sugar sales, but demand for bio-ethanol was higher and prices rose accordingly. The slight loss of sugar volume was more than offset by demand from hospitals, care providers and other customers for disinfectant alcohol for use in hand gels and hygiene products. Cosun Beet Company responded quickly and effectively to the demand. This profitable windfall, in combination with cost reductions, resulted in a positive operating result.
With slightly higher sugar volumes and prices but lower bio-ethanol prices, Cosun Beet Company expects to continue its positive performance in 2021.
Aviko had an exceptionally turbulent year. Following its record operating profit in 2019, volume fell sharply in March 2020 when the hospitality sector was shut down during the first lockdown. With an 85% share in the potato products segment of the foodservice and out-of-home channels, Aviko was badly hit by the first lockdown in 2020. Sales rapidly recovered, however, after the summer. Aviko Rixona’s sales of flakes and granules developed according to plan. Thanks to an upturn in sales in China, the softer impact of the second lockdown, when delivery and takeaway services provided creative solutions, and the contribution from granules and flakes, Aviko closed the year with a modest positive result.
Demand for potato fries collapsed under pressure from the pandemic. Aviko respected all its contracts with potato growers; the surplus potatoes were stored as fries, processed by Aviko Rixona, used for animal feed, sold to other businesses or fermented.
The acquisition of Unilever’s potato processing factory in Stavenhagen, Germany, the acquisition of Hongyuan Louis in China and capacity expansions in the Netherlands and Belgium are seamlessly aligned to Cosun’s growth strategy. In view of these investments in combination with continued worldwide growth in demand for potato snacks and frozen fries, Aviko is confident it will pursue its growth strategy in 2021.
With health and immunity in particular being high on the agenda in 2020, Sensus benefited from the greater interest in healthy food. Inulin promotes gut health and improves resistance to disease and is increasingly being used as a functional ingredient in a wide range of consumer products.
The disappointing chicory harvest prevented Sensus from taking full advantage of the higher demand for inulin. Tight conditions on the market translated into higher prices, which made up for the lower volume and led to a better result than in 2019. An increase in both the area under contract and the processing capacity at Roosendaal will enable Sensus to meet the rising market demand.
SVZ turned the previous year’s loss into a positive result in 2020. The turnaround was triggered by an active response to market opportunities and cost reductions. Although the pandemic inevitably impacted sales in the foodservice and on-the-go channels, SVZ made the most of the opportunities to meet the growing demand for fruit and vegetable applications in healthy foods for home consumption. Effective use was made of the increased production capacity in both Poland and the US.
The fruit harvest in Europe was disappointing, with higher purchase prices as a result. The vegetable harvest by contrast was excellent. An eye for cost control, market opportunities and long-term contracts on both the demand and supply sides should give SVZ a platform for further sustainable growth.
Duynie Group’s result for 2020 was positive but lower than that for the previous year. The pandemic had an impact on sales as suppliers could provide fewer co-products, such as brewers spent grain and potato steam peelings, for processing. Growth was accordingly slightly lower than expected.
Most business units, including Duynie Feed, AgriBioSource and the online platform MijnVoer(Markt), reported satisfactory results. Duynie Feed extended its activities to France. The production facility taken into service in Cuijk in 2020 suffered some start-up delays. Novidon, which produces potato starch from residual streams, had to contend with lower starch prices. Travel restrictions confronted both Novidon and Duynie Ingredients with the challenge of effectively bringing innovations in their product portfolios to the attention of potential customers.
Thanks to a stable market outlook for Duynie Feed and AgriBioSource and an acceleration in the start-up of the new ingredients factory, Duynie Group is looking forward to realising a positive result again in 2021 and to making a further contribution to Cosun’s 100% circular ambition.
Cosun has sold part of the site of its former sugar factory in Puttershoek. The lengthy process of obtaining a new land-use plan was recently completed. Part of the site has been sold for industrial and logistical purposes and another part for agricultural use.
The basic price per tonne of beet has been maintained at € 32.50. The members’ bonus has been raised to € 7.00 per tonne of beet (2019: € 6.50). The beet price for standard quality quota beet (sugar content of 17% and extractability rate of 91) amounts to € 39.50 per tonne supplied (basic price of € 32.50 + € 7.00 members’ bonus). In 2019 the standard beet price had been € 39.00 (basic price of € 32.50 + € 6.50 members’ bonus). The price paid for beet of average quality supplied in 2020 amounts to € 35.58, in comparison with € 36.05 in 2019. This slightly lower price is the outcome of the higher members’ bonus of € 7.00 (2019: € 6.50) and a lower sugar content and extractability rate. Owing to the dry spring and summer followed by excessive rainfall in the autumn, the average sugar content in 2020 was just 16.1% (2019: 16.3%) and the extractability rate was 89.3 (2019: 89.6).
The price paid for surplus beet of standard quality has been set at € 24.50 per tonne (2019: € 25.00). The price paid for beet of average quality has been set at € 22.07 per tonne (2019: € 23.11).
The yield in the Netherlands in 2020 came to 13.3 tonnes of sugar per hectare (2019: 13.7 tonnes). For the growers, the average financial yield per hectare in 2020 came to € 2,901 (2019: € 2,930).
The table below presents an estimate of the Dutch sugar beet crop and sugar production in 2020 in comparison with 2019.
|BEET PROCESSED||[in tonnes]||6,874,000||6,777,000|
|BEET SUGAR CONTENT||[%]||16.1||16.3|
|BEET SUGAR PRODUCTION||[in tonnes]||1,092,000||1,094,000|
The figures in this press release have not been verified by the external auditor. This press release does not constitute a publication within the meaning of article 395, paragraph 2 of Book 2 of the Dutch Civil Code. Cosun will publish its definitive results for 2020 on its website (www.cosun.nl) in April.
Breda, 11 February 2021
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Corporate Communications | Royal Cosun
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