Cosun Annual Report 2023: Navigating Challenges and Achieving Growth

Letter from Arwin Bos Chairman of the Board and Hans Meeuwis CEO of Cosun

Looking back on a dynamic year, we see that the fall of the cabinet and the failure in forming an agricultural agreement have brought much uncertainty for our sector and that rising geopolitical tensions and tough harvesting conditions are affecting Cosun as well. Nevertheless, 2023 was a good year for us, in which we achieved an even better operating result. We made progress on our strategic priorities. 

Guided by our Unlock 25 strategy, we are steering a firm course, with our strategy providing direction and a point of focus for all our business activities. We have three strategic priorities: we want to improve our results in the short and medium term, we are working on a sustainable, futureproof chain and we are committed to our strategic growth in four core areas sugar beet, potatoes, co-products and ingredients for a sustainable lifestyle.

Challenging growing conditions

The year 2023 was a difficult year for crop cultivation; it brought challenges for the cooperative, but especially for individual growers. The prolonged period of rain prevented growers from harvesting all crops and it moreover reduced crop quality. Frost also had an adverse impact on our growers’ businesses.

In December, more than 25% of the sugar beet was still in the ground. We introduced a frost-damage scheme to boost beet processing to a maximum in the interests of the cooperative.

Growers and business groups showed resilience and, despite the sometimes challenging weather conditions, we managed to harvest most crops and process an average of 53.800 tonnes of beet per day in 2023. The credit goes to all who contributed to this: growers, contract workers, Cosun staff, lorry drivers and all others which are indispensable to secure our production.

Further improvement in operating result

Despite all the challenges, in 2023 we made good progress towards improving our operating result: consolidated turnover rose this year from EUR 3,047 million to EUR 3,704 million (USD 3,318 million to USD 4,039 million). This 22% increase was driven chiefly by favourable price movements, with volume development presenting a mixed picture.

The operating result has also improved significantly and increased from 196 million euros to 525 million euros (before members' bonus). Cosun Beet Company, Aviko and Duynie all showed a good improvement in results. This is driven by necessary price increases to compensate for cost increases, relatively favourable market conditions and the improvement of underlying performance and capacity expansion.

Sensus had a difficult year, partly because the demand for high-quality ingredients declined. The organization has worked hard to further improve the underlying, structural results, coupled with further improvement of the revenue model for our members. We distribute 50% of our net income, adjusted for exceptional items, to our members through the beet price and we invest 50% in the cooperative.

Looking ahead to 2024

In 2024, we will stay the course plotted in the Unlock 25 strategy. A solid revenue model for our growers calls for further improvement of our underlying operating results and further growth.

Growers see their costs rise year after year. In 2023, we saw the dramatic effects of extreme weather conditions, with increasingly stringent laws and regulations around nitrate reduction and nitrogen use also having a major impact.

We are therefore fully committed to continuing our strategy and anticipate favourable developments in the year to come. However, the increasing political and economic uncertainty of last year remains, and we expect a cautious recovery of the ingredients market. As 2025 draws closer, in 2024 we will also review the strategy and look ahead to Cosun’s more distant future.