THANKS TO THE RESILIENCE OF ITS ECONOMIC MODEL IN LIGHT OF THE COVID-19 HEALTH CRISIS, EURALIS IS GOING AHEAD WITH ITS PLAN TO CONSOLIDATE AND ACCELERATE ITS STRATEGIC DECISIONS : TRANSFORMATION, INTERNATIONAL DEVELOPMENT AND INNOVATION WITH AN EMPHASIS ON PERFORMANCE
Euralis stayed on track during the 2019-2020 financial year. The cooperative held the line with a steady gross annual turnover of 1.33 billion euros and an operating income of 22.5 million euros. It has demonstrated its agility and responsiveness: always client-oriented, it successfully adapted its working methods while adopting the necessary hygiene measures imposed by the unprecedented COVID-19 crisis. Meanwhile, its EBITDA reached 49.8 million euros. The group’s economic performance was nevertheless affected by the combined impact of the crisis, the fall in duck meat prices and unfavourable exchange rates in the seed market. As a result of these severe disruptions, the group’s net income stands at zero.
On the whole, this financial year strengthened the company’s determination and desire to accelerate its strategic decisions. The year was particularly marked by our choice to move forward with consulting in response to the Egalim bill, and the completion of the merger between Euralis Semences and the Caussade Semences group.
In a rapidly changing ecosystem, the Agricultural Division is accelerating its transformation. Overall economic performance is improving, while turnover remains relatively stable, with growth varying depending on the activity. The retail distribution circuit grew by 11% with the Table des Producteurs aisles (+28%) and gardening segment (+15%), whereas collection activities recorded more mixed results, with seasonal variations.
The Seed Division’s turnover rose by +8.1%, steered by international development, particularly in Russia, and strong performance in seed genetics. Maize sales volumes (+8%) and the surface area planted with Euralis Semences varieties (+15%) also greatly increased. The completion of the merger between Euralis Semences and the Caussade Semences Group to form Lidea, on 1 September 2020, was a major event in the division’s financial year. This new group is now one of Europe’s leading field seed companies.
Food activities were also impacted by the COVID-19 crisis. Stalaven (whose turnover rose by 6.1%) benefited from a positive sales dynamic with local retailers (butchers, delicatessens and caterers) and strong performance in its dry cured meat activities (with sales up 20%). L’Atelier Traiteur, meanwhile, witnessed a 22% fall in turnover, linked to the decrease in traffic to supermarkets and the closure of certain aisles during the health crisis. Maison Montfort’s turnover grew slightly (0.9%), confirming the relevance of its sales strategy with another successful festive season (the brand maintained its no.2 position in supermarkets) and a rise in meat sales. Rougié, whose turnover fell by 18% this year as a result of COVID-19, performed well in light of the crisis by offering chefs products adapted to new constraints (reduced brigades and stringent health requirements).
Christophe Congues, President Delegate of Euralis: “The beginning of 2020 was marked by our choice to move forward with consulting in response to the Egalim bill. This decision, which was taken in the midst of a rapidly changing ecosystem, makes us a pioneering cooperative, and we’re proud of it. It is driven by our desire to reinvent the farming of the future: sustainable and multifaceted agriculture which meets the expectations of farmers, consumers and society at large. Agriculture which maintains a competitive edge for the group and its members, particularly via the creation of value-added sectors.”
Philippe Saux, CEO of Euralis: “The 2019-2020 financial year was marked by an unprecedented health crisis which the group withstood thanks to its agility and resilience. Throughout this difficult period, we remained focused, and our teams, who are often on the front line, have demonstrated a remarkable level of involvement and commitment. We also received support from our partner banks. Our mission and fundamental values remain unchanged. Firstly, we are helping farmers in Southwest France safeguard their revenues by offering them consulting services, as well as new market opportunities and sectors. Secondly, we are strengthening our R&D capacity and expanding the international development of the Seed Division. Finally, we are producing high-quality food that meets the expectations of farmers and consumers. True to our cooperative values, we are consolidating our strategies and accelerating their implementation.”
These figures will be submitted to the Euralis Coop General Assembly on 12 February 2021 for final approval.
HIGHLIGHTS OF THE 2019/2020 FINANCIAL YEAR
Euralis is strengthening and accelerating its strategic decisions: continuing its transformation, boosting its international development, investing in innovation, and implementing a performance-driven organisation.
Choosing consulting: last February, in light of the rapidly changing ecosystem and the regulatory context of the Egalim bill, Euralis announced its decision to choose consulting over sales. Consequently, the cooperative is committed to helping farmers reinvent the farming of the future. The Agricultural Division reorganised its activities accordingly, actively rethinking its business model and training its teams.
Continuing international development: established in 18 countries, Euralis generates 26% of its turnover outside France. Over the past year, each division has consolidated its position in high-potential markets.
- The Seed Division generated 80% of its turnover outside France. It continues to develop in Eastern Europe, particularly in Russia, Poland and Romania. Boasting an extensive network of producers and industrial facilities, it maintains a competitive edge thanks to its early-ripening varieties suited to the local climate.
- The Agricultural Division, meanwhile, is developing its export activities. In terms of downstream markets, it generated a third of its turnover abroad, particularly in the Iberian Peninsula and the UK.
- Our Maubourguet site (Southwest France) has been approved to export its foie gras to China. This suggests promising growth prospects for Rougié, which generated 40% of its turnover outside France over the past year.
Focusing on innovation: we maintained our R&D investments in all our activities (28.8 million euros)
- The Seed Division dedicated 13% of its turnover to innovation. Our research efforts are producing very satisfying results, particularly regarding the performance of our gene flow (sunflower and sorghum) and organic varieties. These efforts are enhanced by our strong partnership strategies (Soltis for sunflower, Innolea for oleaginous seeds and Eurosorgho) which are set to expand even further in a bid for greater diversity and improved yields.
- With its transformation in full swing, the Agricultural Division is innovating to offer healthier food products and develop sustainable agriculture and renewable energy in Southwest France. To achieve this, new sectors and an innovative product range have been created by collaborating with pioneering start-ups on certain projects. Now more than ever, it is in tune with the agricultural transition and the expectations of farmers, consumers and society at large.
- Regarding food activities, the various brands are focusing on innovation and launching products that meet the needs of consumers and chefs as best as possible. Emphasis is placed on healthy, delicious, convenient products with guaranteed traceability. Examples include Label Rouge Maison Montfort meat and foie gras launched this year, Qualité Traiteur sliced savoury cakes voted “2020 Product of the Year”, and Rougié’s bistronomic range.
Implementing a high-performance organisation: Euralis has developed a strategy aimed at achieving profitable growth for each of its divisions.
- Food activities have been divided into four autonomous entities. This new industrial and commercial organisation, which has been in operation since September 2019, will help entities stimulate their growth levers, improve profitability and create synergies with each other. Now that the brands are more in touch with their markets, they are able to adapt to trends in a responsive, agile manner.
- Euralis Semences has completed its merger with the Caussade Semences Group. Lidea, the resulting new entity, has a significant critical mass and the potential to form synergies in a bid to consolidate its position in Europe and strengthen its development in the East.
- By transforming its model, the Agricultural Division aims to return to profitability in each of its activities. This reorganisation is supported by the launch of ambitious training programmes for employees.
The highlight: Lidea
The merger between Euralis Semences and the Caussade Semences Group is complete, with the creation of Lidea on 1 September 2020. Rooted in Southwest France, this new entity is now one of Europe’s leading field seed companies, with a high-performance gene flow and a long-standing position in Eastern Europe’s high-growth markets. With a combined turnover of 353 million euros and a multi-species portfolio, Lidea benefits from excellent R&D capacity and enhanced seed genetics, thus providing seed variety solutions tailored to all target markets.