Good Result for Royal Cosun in 2009

Cosun achieved a net turnover of EUR 1,758 million in 2009, an increase of 4% on 2008 despite the recession, which placed pressure on both sales volumes and selling prices.

25 Mar 2010 --- Despite the economic headwind, there was a clear 9% improvement in operating profit to EUR 93 million. Virtually all business groups managed to improve their operating profits, in part through further growth at Sensus and Suiker Unie and in part through the timely implementation of cost saving programmes at the other activities.

Group equity increased by EUR 29 million to EUR 753 million (2008: EUR 724 million). The group's strong financial position thus remains undiminished.

Business groups

Suiker Unie's turnover was lifted by the acquisition of Danisco Sugar's sugar activities in Anklam, Germany. Suiker Unie was also able to export sugar at favourable prices owing to the shortage of sugar on the world market. The synergy benefits and cost saving programmes that have been implemented since the acquisition of CSM Suiker in 2007 and the closure of the Groningen sugar factory in 2008 contributed to operating profit for the full year. On balance, there was a significant improvement in Suiker Unie's operating profit. The acquisition in Germany made an immediate contribution to operating profit and the net result in its first year.

Nedalco, by contrast, had to contend with a sharp drop in demand for alcohol as a result of the recession. To prevent high stock levels, production in Bergen op Zoom was suspended for part of the year. Nedalco's operating profit was therefore lower than in the previous year.

Aviko saw a slight decline in its turnover in 2009, chiefly as a result of lower sales of dried potato products and lower income from residual flows (starch and animal feed). Despite a contraction in the market, turnover on the chip activities was higher. An increase in the proportion of premium products in the portfolio had a positive impact on Aviko's profitability. Furthermore, cost saving measures compensated for the pressure on selling prices, which led to an improvement in operating profit.

Sensus achieved further growth in both turnover and profitability. Worldwide, demand for functional food ingredients such as inulin is continuing to strengthen.

After a very disappointing 2008, SVZ achieved a considerably better – albeit still negative – result in 2009. The large volume supplied during the harvest reduced the price of several fruits of importance to SVZ. Despite a 10% increase in sales volume, both turnover and the contribution margin were lower.

Unifine Food & Bake Ingredients' turnover was reduced by lower sales, particularly in countries that were hit hard by the economic headwind, such as Russia and Spain. Nevertheless, operating profit was improved by a significant cut in costs and by efficiency measures.
 
Prospects

It is still uncertain how long the economic recovery will continue in western Europe and the Netherlands. Turnover is expected to be lower in 2010 owing to the reduction in the sugar reference price in the fourth quarter of 2009 and the fierce competition on the chip market. A further fall in sugar prices may exert pressure on Suiker Unie's profits. It is currently thought that the decline will be limited, partly because of scarcity on the world sugar market. The price war expected in the private label market for chips will certainly have ramifications for Aviko's profits. Further cost savings may not be high enough to fully offset the negative impact on margins. If the recovery gains momentum, the other business groups are expected to report a further improvement in their results. We shall continue to focus on cost savings in 2010. Cosun will also seek to strengthen its market positions by investing in process and product innovations. On balance, we do not expect the result to differ substantially from that for 2009.