2. Report of the board of directors

Avebe closes the financial year with a performance indicator of 136.79 euros per tonne of starch potatoes - an increase compared to previous years. The cooperative result for this financial year is 5.1 million euros. We are extracting more value from Avebe. Additionally, we are seeing positive developments in the food market and are continuously working on sustainability. The efficiency and reliability of our production lines have also improved. We are broadening the application of our technology, innovation, and expertise to accelerate the cooperative’s earning capacity. With the launch of the new Averis strategy, we are also committed to continuously improving the profitability of starch potato cultivation. Solvency stands at 36.5 per cent, slightly higher than last year, with a target of 40 per cent. Free cash flow remains positive, equity has grown, and inventory levels are lower.

A total of 60 million euros was invested in the 2024/2025 financial year. The focus was on preventive replacements that also contribute to water savings and CO₂ reduction, such as the decanters in Gasselternijveen. Substantial investments were also made in IT, and the production site in Foxhol was upgraded for flexible deployment. With the approval of the refinancing, the company’s financial position has been further strengthened.

Potato starch production increased by 4 per cent compared to the previous financial year. This rise is partly due to better availability of potatoes, allowing some production sites to operate longer than initially expected. This specifically refers to native production from our starch factories, as Avebe’s total production volume includes multiple product streams. Sales volume declined by 2 per cent, and net revenue fell by 2 per cent compared to the previous year.

After two years of decline, raw material supply was well secured this financial year. There were sufficient starch potatoes available to maintain stable production. For the coming financial year, we expect an increase in starch potato acreage. To improve the profitability of starch potato cultivation more broadly, a new Averis strategy has been rolled out. This strategy focuses on broader earning potential for Averis and a stronger value proposition for our members. This includes earlier access to specific varieties, more favourable seed potato prices, and tangible benefits such as logistical support.

After several years of challenging harvest conditions, the growing and harvesting conditions were favourable this year, despite a later start to the planting season. The campaign began in August 2024. In the German KPW region, the start went smoothly, with initial processing in Dallmin and continuation in early September in Lüchow. In the Netherlands, however, the campaign faced a challenging start. A fire at one of our suppliers rendered a crucial auxiliary substance unavailable, preventing production from starting in Ter Apelkanaal even though potatoes had already been delivered. The procurement team had to find an alternative in a very short time, while installations needed to be reconfigured. The time pressure and strain on the team were unprecedented. This turbulent start initially led to additional costs and quality issues, but thanks to targeted programs and the tremendous efforts of all involved teams, stability was quickly restored. Production then continued more steadily and for a longer period, partly due to the increased availability of potatoes.

This year, there were no concerns about sufficient potato supply. With adequate potatoes, the focus shifts even more towards the stability, flexibility, and deployability of production lines. In particular, the stability of the production lines remains a key point of attention. Instability leads to additional costs and pressure on output quality. Therefore, we are moving towards more preventive maintenance, and interdepartmental collaboration has also been further strengthened. This will remain a focus area in the coming year, with the aim of achieving stable, safe, and high-quality production.

Safety remains our absolute top priority. Unfortunately, we are seeing a negative trend: the number of incidents is increasing. The causes lie not only in processes or technology but also in behaviour and culture. In recent years, steps have already been taken through technical measures, process structures, and work permits. The next phase involves further cultural and behavioural change, and despite good progress, this takes time. Time we will continue to invest in the coming years.

The new financial year began with a significant milestone: the acquisition of Solan, a Polish producer of potato flakes and granules. Avebe now holds 100 per cent ownership of Solan, adding both valuable expertise and an entire region to our organisation. It has been some time since we achieved growth through acquisition, and this step has generated positive energy within Avebe. With this strategic move, we broaden our product portfolio and can respond more swiftly to new markets and customer needs. By including flakes and granules in our offering, we meet growing customer demand. In recent years, we have focused on strengthening our foundation, enabling us to now accelerate growth in new segments. Solan also offers significant innovation potential: the combination of local expertise, product technology, and customer focus aligns well with our ambition to accelerate and expand innovation.

Despite the previously mentioned volatility and uncertainties in the markets where Avebe operates, demand is currently stable. However, we face several additional challenges in the 2025 growing season. After two years of decline in starch potato cultivation, we now see stabilisation in the Netherlands and growth in Germany. Acreage is also increasing outside Avebe, particularly in Scandinavia. Combined with a good harvest, this leads to a rising supply of starch potatoes. At the same time, the broader potato sector in Northwest Europe is under pressure due to extremely low prices, structural surpluses, and declining demand from the chip industry. Avebe is closely monitoring these developments, as well as the economic and geopolitical dynamics in Europe and beyond. Despite these external uncertainties, Avebe is in a strong position: with a broader portfolio, a solid foundation, and an agile organisation, we are better equipped to seize opportunities and address challenges.

Two strategic programs will receive extra attention in the coming period: further development of existing protein activities and bio-based raw materials for industrial markets. For proteins, the focus is on leveraging previous investments to attract more markets and a wider range of customers. We are beginning to see early positive developments here. The Industrial growth program is also regaining focus, partly due to the slower-than-expected recovery of the construction market in China.