For the 2020-2021 financial year, the Euralis Cooperative Group consolidated its development strategy and confirmed the strong rebound in its economic performance
The Euralis Cooperative Group’s gross turnover reached €1.44 billion for the 2020-2021 financial year, an increase of more than €100 million compared to the previous year, which includes positive changes in its scope and the negative impacts of the drop in grain production, the COVID-19 crisis and bird flu.
The EBITDA figure, which measures the company’s performance, stood at €78 million, an increase of almost €16 million over the same scope, mainly driven by agrifood activities. Like the EBITDA, operating income grew by 20 million and contributed to the improvement in net income.
These rising indicators show that the Group has made progress in core areas. With its newfound confidence, Euralis is building on its ambition.
Agricultural activities: effective transformation and improved results
Crop areas dedicated to vegetables (+17%), seeds (+3%) and contractual maize production are being expanded despite a historically low autumn collection (-29%). In the livestock sectors, this growth is contrasted with a rise in cattle production (+2%) and reduced poultry production (-11%) due to the bird flu outbreak. Euralis has chosen consulting within the framework of the Egalim Bill. Plant protection activities were thus divided into two separate legal entities (Distrialis and EVV) and consulting and services were rolled out to farmers (with 1,800 farms in Southwest France supported by Euralis). An ambitious training plan has been implemented to support farm advisors in this new direction. Finally, turnover is up in the retail distribution circuit and Point Vert stores (+10%), driven in particular by the excellent performance of short circuit food aisles (Table des Producteurs). It should be noted that 85% of the turnover generated by these departments is redistributed within a 25 km radius of these stores.
Lidea (Seed Activities): confirmed international growth
Despite strongly restricted availability due to the impact of unfavourable weather conditions on yields, Lidea recorded a 2% growth in turnover, driven by southern and eastern European markets, while the French market declined for maize and sunflower. The merger with the Caussade Semences Group is largely complete and the first sales campaign under the Lidea brand was launched in summer 2021. The year was also marked by the inauguration of a new industrial facility in Romania and the completion of the Russian plant, which is now operational, helping boost sales in local markets. In terms of EBITDA, the year’s performance was stable, despite higher costs, lower yields and unfavourable exchange rates.
Food activities: notable growth in a complicated context
Duck activities recorded EBITDA growth of €9 million in a context marked by COVID-19 and bird flu, which impacted sales. The complementary nature of the two production areas (West and Southwest France: Brittany and Pays-de-la-Loire) made it possible to cope with the outbreak and retain our market share. At Euralis, as for the industry as a whole, this new bird flu outbreak imposed specific production constraints and reminded us of the importance of complying with biosafety measures. Within the cooperative, since 2017, member farmers have invested nearly €18 million to move to an all-in/all-out system at each site to increase cleaning efficiency during decontamination and to control traffic flows on farms. With slight growth in turnover (1%), the Maison Montfort brand consolidated its number 2 position in supermarkets, despite volume constraints due to bird flu. For its part, the Rougié brand, bolstered by its reputation, reported a significant rebound as soon as restaurants reopened.
The profitable growth of STB (Stalaven and Atelier Traiteur) continued the EBITDA up €7 million over the year. For Stalaven, this growth was driven in particular by strong sales in three product ranges (savoury pastries, prepared dishes and sausages) and good performance in the local retail market. Premium products and innovation accounted for 50% of overall growth. Taking all brands and product ranges into account, the value of net sales in delicatessen activities thus increased by 11% with growth rates reaching +23.4% for savoury pastries, +18.4% for prepared dishes and +15.7% for sausages. This performance will make it possible to accelerate industrial investments at the Yffiniac site (Western France).
Christophe Congues, President of the Euralis Group: “The 2020-2021 financial year was marked by an ongoing health crisis and a new episode of bird flu. In this uncertain context, thanks to the strength of our core activities and the professionalism of our teams, we have managed to return to strong growth, which allows us to plan ahead smoothly. Together, employees and farmers contribute to nourishing, sustainable, diverse, healthy and affordable agriculture close to our regions. This agriculture helps develop farmers’ incomes and ensures that the Group remains competitive. With this in mind, we are now actively relaunching projects and reaffirming our desire to diversify: from kiwifruit to energy, farmers have numerous opportunities to secure their incomes. All these opportunities are a natural part of our CSR strategy.”
Philippe Saux, CEO of the Euralis Group: “Despite adverse conditions (low maize yields, COVID-19, bird flu, a decline in certain markets), Euralis’s economic performance is up from the previous financial year, which shows the ability of our cooperative Group to mobilise, bounce back and deploy its strategy effectively. We also owe this renewed dynamism to the rigour and commitment of our staff and the support of the vast majority of our members for our strategic project.”
These figures will be submitted to the Euralis Coop General Assembly on 11 February 2022 for final approval.
IMPLEMENTING STRATEGIES: A FEW EXAMPLES
During the year, Euralis confirmed its threefold objective: food, society and energy production.
Food: the Group strives to offer high-quality agricultural and food production which is affordable to all, respects the environment, meets or even anticipates market and consumer expectations and guarantees a secure income for farmers.
Offering products in line with consumer trends:
- Table des Producteurs short-circuit food aisles distribute local, traceable and seasonal products. 500 producers are listed in these aisles.
- Rougié has developed product innovations that meet the expectations of chefs, in particular a high-quality burger made of shredded duck confit which is easy to cook, transport and deliver
- Maison Montfort has included the producers it works with on its product packaging to highlight traceability and local origins.
- Stalaven has focused on improving product quality by raising its standards regarding taste and nutritional criteria.
Helping to secure farmers’ incomes:
- The Agricultural Division aims to contractualise 70% of its plant production by 2025, in particular by developing a precise set of specifications – for example, the partnership with Pernod Ricard for maize production or the existing agreement signed with Bonduelle for vegetable production.
Euralis’s social vocation has economic, environmental and social dimensions, which are the pillars of the Group’s CSR strategy.
Getting involved in the local economy and contributing to regional vitality:
- Euralis contributes to direct and indirect employment (50,000 indirect or induced jobs). This year, 300 million purchases were made from members and 600 million from suppliers (raw materials, transport, energy).
- Table des Producteurs food aisles provide an outlet for listed producers
(turnover is up 22% over the year).
Building on this regional base, strengthening our international influence:
- With more than 80% of turnover outside France, Lidea has confirmed its development in Eastern Europe, particularly in Russia, Poland and Romania.
- The Agricultural Division continues to develop its export activities by expanding its sectors.
Adopting eco-friendly farming practices:
- Euralis optimises resource management (water, energy, soil, etc.).
- The cooperative promotes the reduction of input products.
- Lidea is working on developing seeds that are more resistant to drought.
Choosing consulting to help farmers change their practices:
- During the year, more than 1,800 agreements were signed.
Being a socially responsible company and caring for our employees:
- To support its transformation, the Agricultural Division will invest €5 million by 2024 in training plans and has already provided 10,000 hours of training to farm advisors during the year.
- The attention paid to individual employees is reflected in action plans to improve safety at work in all our activities, with zero accidents being a goal shared by all.
Energy production: the Group is already helping to produce energy and aims to create dedicated sectors.
- During the year, 29% of maize produced (i.e. 194,000 tonnes) was used in manufacturing ethanol as part of our partnership with BSO (Southwest France).
Offering solar energy projects to farmers:
- Euralis plans to install solar panels on its members’ farms (an inventory of available surfaces was undertaken during the year). Agrivoltaics is another opportunity to support farms.
Producing renewable energy at the Group’s sites:
- Solar panels will be installed in Maubourguet and Les Herbiers in Southwest France with the aim to produce at least a quarter of the energy consumed by these factories from these panels by 2022.