2. Report of the board of directors

We started this financial year where we ended the previous one: in a macroeconomic environment with global recession, declining consumer demand and pressure on prices. Firstly, this reduced Avebe's sales volume. The second factor affecting the performance indicator is some one-off costs, such as the decision to sell the entity in Turkey. Here we choose to strengthen the balance sheet and bring focus in line with our strategy. This while strengthening our position in the region and focusing on creating more added value through a strategic partnership with Brenntag.  

Avebe ends the financial year with a performance indicator of 118.62 euros per tonne of starch potatoes. Compared to last year, this represents a step backwards. The cooperative result this financial year is 2.6 million euros. 

Due to the global recession and some one-off costs, the impact we are making is not directly reflected in potato money. However, growth can be found in a number of other financial key figures. For instance, solvency improved by 6.2 per cent to 36.4 per cent, with us aiming for 40 per cent. Equity has also grown, cash flow is healthier and both accounts receivable and inventories are lower. In short, a better balance sheet that should start paying off in potato money with the expected growth in returns.

Although we had a lower production volume due to the processing of fewer potatoes and sales volume fell by 8 per cent, the drop on net sales is much smaller at 3 per cent. In relative terms, net turnover fell less sharply than sales volume because we are increasingly successful in bringing Avebe's added value to the market. In the new growth strategy Accelerate and Strengthen, the customer is central, and we emphasise the accelerated shaping of the distinctive value in our product portfolio. The commercial team has improved several commercial processes, and we work more intensively with customers to develop solutions to their challenges. We do this by providing them with broad support and advice from our Innovation Center.  

In this first year of the strategy Accelerate and Strengthen, we are organised more as one Avebe and it is already clear that the new strategy makes us stronger and more agile. This is partly due to a clear and transparent annual operating plan, the leadership days, the Connection Talks, also known as the canteen sessions, and the more professional way of communicating, both internally and externally. The new strategy is being implemented at all levels. Our story resonates. We are increasingly part of the solution, both for farmer members, customers and employees, as well as for regional partners, national politics and other external stakeholders. 

A total of 38 million euros was invested in the 2023/2024 financial year. This included a focus on keeping our production lines up to date, and our factories were further automated and efficured. Moreover, investments were made on achieving our sustainability targets, which are in line with the Paris Climate Agreement 2030.

Cutting costs goes hand in hand with further sustainability and reducing our footprint. The drivers of our strategy are innovation and sustainability. We see strong developments, for instance, in the improvements in the water program and the CO₂ reduction in the procurement package. We are also taking the necessary steps in the product portfolio and our position in the market. For instance, our products are used in biodegradable packaging, in plant-based food alternatives and our building portfolio offers biobased products. We are moving into new markets with existing or new products better than expected. Often with significantly higher value. The main reason for this? We develop applications more from a customer need and in dialogue with that same customer.  

Thanks to the commitment and trust in each other, we are transforming into a more enterprising and agile organisation. We strengthen the organisation not only on technical skills. With the deployment of a leadership program, for example, there is also more emphasis on developing leadership skills as part of Avebe's Play to Win culture. Furthermore, a behaviour-based safety program focuses on safety at production sites and organisation-wide attention is paid to digital safety and cybersecurity. 

To achieve Avebe's objectives and comply with the organisation's Play to Win core values, we strive for a balanced male-female distribution in management. The supervisory board includes 7 men and 2 women. The board consists of 2 men and the leadership team of 41 men and 10 women. Avebe wants to increase the number of women in the organisation, especially in senior management positions. Our target is at least 30 per cent of positions filled by women. To achieve this goal, increasing the number of women in leadership positions is included in our strategy.  

Our farmer members have had an exceptionally challenging crop year. The wet harvesting conditions even left potatoes in the ground in some plots. The wetness leaves structural damage in the soil and thus continues to affect this growing season. Together with changing legislation, climate change, increasing disease pressure and rising costs, this is increasing competition in the field and putting pressure on Avebe's raw material supply. 

Our subsidiary Averis is a global player in the development, propagation and trade of starch potato varieties. New varieties are being developed that are more disease-resistant, give higher yields in the field and are more resistant to changing weather. With new breeding techniques, we have better varieties available to our members faster and faster. Growers are more likely to choose a potato variety that suits their soil, farm management and yield requirements. In this way, they use less crop protection products, while yields are optimised. An improvement of the balance, in other words. And at the same time better for the environment.  

For the coming financial year, we will use the planned investments of around 60 million euros to strengthen the basis and maximise returns. We will continue to invest in new technology and improvements to our current production lines, such as the GUM food line at the Ter Apelkanaal production site. We are building on the proven value of our product portfolio and we are further making our production processes more sustainable. The planned investments will be financed from our own resources and existing facilities. After the end of the financial year, an agreement was reached with a consortium of banks regarding the refinancing of the revolving credit facility for the coming years. Further details are provided in the consolidated financial statements.

Yes, it was a challenging year. Both for the Avebe team, the supervisory board, the members' council and of course for our farmer members and customers. But challenges braved together lead to the best teams with continuously improved results. We cannot stress enough that our strength lies in our collective. By taking crucial medium-term decisions this year, we are more future-proofed. We increase the yield of the collective faster with structurally sufficient potatoes. Together, as one Avebe.  

CEO David Fousert en CFO Rob van Laerhoven