ANNUAL REPORT
COSUN ANNUAL REPORT 2015
Royal Cosun
Van de Reijtstraat 15, 4814 NE Breda
P.O. Box 3411, 4800 MG Breda
The Netherlands
Telephone: +31(0)76 530 32 22
Fax: +31(0)76 530 33 03
www.cosun.com
Entered in the
Trade Registry of the
Chamber of Commerce
under number 20028699.
The Annual Report is published in English and Dutch. In the event of
inconsistencies between the English and the Dutch version, the latter shall
prevail. In addition to this Annual Report, Cosun issues a separate digital
Sustainability Report. The annual reports are also available at
www.annualreport-cosun.com.
ROYAL COSUN
COSUN ANNUAL REPORT 2015
OVER COSUN
3
ABOUT COSUN
Addresses 4
Profile 5
Business model 6
Locations 7
KEY FIGURES 8
COOPERATIVE ISSUES
Report of the cooperative 10
Members and shares 11
REPORT
Letter from the Chairman and the Chief Executive Officer 12
Financial performance 14
Prospects 16
Corporate social responsibility 17
COSUN AT WORK
Innovation and development 20
Suiker Unie 21
Aviko 23
Sensus 25
SVZ 27
Duynie Group 29
New Business 31
MANAGEMENT ISSUES
Risk profile 33
Corporate governance 37
Report of the Supervisory Board 38
Members of the Board, Supervisory Board, Executive Board and Works Council 40
ANNUAL ACCOUNTS 2015
Consolidated balance sheet 42
Consolidated profit and loss account 43
Consolidated cash flow statement 44
Notes to the consolidated annual accounts 45
Cooperative balance sheet 64
Cooperative profit and loss accounts 65
Notes to the cooperative annual accounts 66
OTHER INFORMATION
Provisions of the Articles of Association governing profit appropriation 73
Independent auditor’s report 74
ROYAL COSUN
3
COSUN ANNUAL REPORT 2015
OVER COSUN
4
ADDRESSES
AVIKOP.O. Box 8
7220 AA Steenderen
Telephone: +31(0)575 45 82 00
Fax: +31(0)575 45 83 80
www.aviko.nl
SENSUSP.O. Box 1308
4700 BH Roosendaal
Telephone: +31(0)165 58 25 00
Fax: +31(0)165 56 77 96
www.sensus.nl
SVZP.O. Box 9535
4801 LM Breda
Telephone: +31(0)76 504 94 94
Fax: +31(0)76 504 94 00
www.svz.com
DUYNIE GROUPP.O. Box 86
2400 AB Alphen aan den Rijn
Telephone: +31(0)172 46 06 06
Fax: +31(0)172 47 34 06
www.duynieholding.com
SUIKER UNIEP.O. Box 100
4750 AC Oud Gastel
Telephone: +31(0)165 52 52 52
Fax: +31(0)165 52 52 55
www.suikerunie.nl
COSUN BIOBASED PRODUCTSP.O. Box 3411
4800 MG Breda
Telephone: +31(0)76 530 32 22
www.cosunbiobased.com
COSUN FOOD TECHNOLOGY CENTERP.O. Box 1308
4700 BH Roosendaal
Telephone: +31(0)165 58 28 10
Fax: +31(0)165 55 13 52
www.cosun.com
ROYAL COSUNP.O. Box 3411
4800 MG Breda
Telephone: +31(0)76 530 32 22
Fax: +31(0)76 530 33 03
www.cosun.com
ABOUT COSUN
5
COSUN ANNUAL REPORT 2015
PROFILE
We produce a wide range of ingredients and intermediate
products from vegetable raw materials such as sugar beet,
potatoes, chicory, fruit and vegetables for the international food
industry. We also make products that are sold to consumers
through the foodservice (out-of-home and wholesale outlets)
and retail channels. We are increasingly developing ingredients
for non-food applications. We supply products to the animal
feed sector, develop building blocks for biobased chemicals and
produce bio-energy (green gas).
Of all the businesses that make up Cosun, Suiker Unie and
Aviko are the most widely known. They have traditionally
produced sugar and potato specialities respectively. Sensus
produces inulin from chicory. Inulin is a dietary fibre that
reduces the sugar and fat content of foodstuffs.
SVZ processes fruit and vegetables into concentrates and purees
for the food industry. Duynie Group is a trader and distributor
of animal feed and develops advanced applications based on
residual flows and co-products from the food industry. Cosun
Biobased Products is a fledgling business specialising, among
other things, in the development and production of functional
green chemicals and materials based on renewable vegetable raw
materials. Its innovations are used in a wide range of applications.
Royal Cosun has a joint research and development centre.
It improves the use of agricultural raw materials, innovates
process technology, optimises energy management and, in
cooperation with customers, develops new products. Cosun
R&D also works with a variety of institutions and universities in
the Netherlands and abroad.
Royal Cosun is an agro-industrial group that processes arable crops and other vegetable raw materials. Cosun is a cooperative of some 9,000 Dutch sugar beet growers. The cooperative has been processing its members’ sugar beet since 1899. Over the years we have added new activities to our portfolio, nearly all of them relating to agriculture or horticulture.
Turnover EUR 1,948 million 3,912 employees (FTE) 29 production facilities in 10 countries
9 million tonnes of vegetable
raw materials processed
9,054 members / shareholders
ABOUT COSUN
6
COSUN ANNUAL REPORT 2015
BUSINESSMODELMAXIMISING THE VALUE OF THE RAW MATERIALS Our commercial success stands or falls on the value we extract
from our raw materials. We therefore use all parts of the plant
in a process known as biorefinery. The challenge is to extract as
many components as possible at the same time.
Our core business is processing vegetable raw materials. We turn
more than 80% of the agricultural raw materials (biomass) into
foodstuffs. Some 10% is made into animal feed and the rest is
converted into bio-energy and biobased products.
SALES MARKETS
Food industry
Livestockfarming
Chemicals
Energy
Sugarbeet
Potatoes
Chicory
Fruits andvegetables
Foodserviceand retail
CULTIVATION BIOREFINERY
ABOUT COSUN
7
COSUN ANNUAL REPORT 2015
Cosun CFTC Aviko Duynie Group
Sensus Suiker Unie SVZ Cosun Biobased Products
LOCATIONS*
* Main offices and production facilities in the Netherlands, Europe, the US and Asia
KEY FIGURES
8
COSUN ANNUAL REPORT 2015COSUN ANNUAL REPORT 2015
KEY FIGURESAs a cooperative of Dutch sugar beet growers, Cosun buys the sugar beet supplied by its members at a price based in part on the
group’s results. The beet price is recognised in full in the profit and loss account as a cost of raw materials and consumables. It
therefore influences the operating profit and net profit for the year, as disclosed in the table below.
In millions of euros (unless stated otherwise) 2015 2014
FINANCIAL
Net turnover 1,948 2,115
Operating profit 59 110
Recurring EBITDA* 167 202
Net profit 46 79
Cash flow from operating activities 54 172
Capital expenditure on fixed assets 109 112
Group equity 1,165 1,257
Group equity as a percentage of total assets 66 63
Average beet yield per hectare in the Netherlands (in euros) 3,301 4,354
Quota sugar beet price** (in euros) 43.01 50.18
Members’ bonus 69 108
SOCIAL
Average number of employees*** 3,912 3,799
Sickness absence (%) 3.9 3.8
Number of lost-time incidents (per 1,000 employees) 24 26
ENVIRONMENT****
Direct CO2 emissions (in tonnes per tonne of product) 0.22 0.22
Water consumption (in m3 per tonne of product) 2.6 2.3
Residual matter (in tonnes per tonne of product) 0.06 0.05
* Recurring EBITDA comprises operating profit before depreciation and amortisation and after adjustment for activities divested and non-recurring items.
** Per tonne of beet with average sugar content and average extractability.
*** Average number of FTEs.
**** See page 19 of this report for further information.
KEY FIGURES
9
COSUN ANNUAL REPORT 2015
59
2011 2012 2013 2014 2015
2,115 1,9482,1661,9451,772
2,200
1,600
2,100
2,000
1,900
1,800
1,700
59
2011 2012 2013 2014 2015
202241270158
300
0
167
250
200
150
100
50
Net turnover in millions of euros Recurring EBITDA in millions of euros
59
2011 2012 2013 2014 2015
108187179118
200
25
69
175
150
125
100
75
50
59
2011 2012 2013 2014
4,3544,9174,8714,038
5,000
0
2015
3,301
4,000
3,000
2,000
1,000
Members’ bonus in millions of euros Average beet yield per hectare in the Netherlands in euros
2011 2012 2013 2014
0.26
0.20
0.22
2015
0.220.210.230.25
0.25
0.24
0.23
0.22
0.21
2011 2012 2013 2014
4,000
3,000
3,7993,4773,799
2015
3,9123,9123,477
3,3963,396
3,5813,288
3,800
3,600
3,400
3,200
Direct CO2 emissiom in tonnes per tonne of product Number of employees, average in FTEs
Average number of FTEs Average number of FTEs (adjusted for divested activities)
10
COOPERATIVE ISSUES
COSUN ANNUAL REPORT 2015
REPORT OF THE COOPERATIVE
The Members’ Council met on four occasions in 2015. A
recurrent item on the agenda was the new sugar system that
Cosun has developed to succeed the EU sugar system. It does
not have a basic reference or a quota allocation, which were
features of the EU system. Cosun has also decided to dispense
with the current share system. The shares will be replaced with
member supply certificates (ledenleveringsbewijzen, LLBs). Every
LLB is an entitlement to supply one tonne of sugar beet, and an
obligation to deliver at least 85% of the total entitlement. The
Articles of Association and the various regulations have been
amended accordingly. The Members’ Council approved the
changes at its meeting of 10 February 2016.
GOVERNANCEHans Megens, an external member of the Board, stood down
at the end of May upon reaching the maximum age laid down
in the Articles of Association. Sander Wijkstra was appointed
in his place. There were no changes in the composition of the
Supervisory Board during the financial year. The membership of
the Members’ Council also remained unchanged in 2015.
Cosun has a Youth Council consisting of enthusiastic young
men and women who work chiefly at their own arable farms
and who have the ambition of learning other skills so that
they can eventually progress to a management position in the
cooperatives of which they are members. The Youth Council
paid a working visit to Avebe during 2015 and took part in a
two-day programme in Limburg.
It was decided to fully digitise the provision of information to
the members in the years ahead. Preparations are already in full
swing. The benefits are that information will be available faster,
can be read any place any time on a computer screen, tablet or
smart phone and will cost less.
MEMBERS’ LOANCosun introduced its own members’ loan programme in 2015.
Members who applied for a payment under the sugar beet
delivery/business termination regulations (UB/BBU) could place
all or part of the payment on a deposit account for between
two and five years.
About EUR 15 million was deposited during the year. It is being
invested in our own businesses, for example to increase the
capacity of the sugar factories. This saving scheme has proved
very popular with our members and will therefore be continued.
Members will be given two opportunities in 2016 to make
deposits for a term of two, three, four or five years. The first will
be in April, when they can deposit beet payments. This option
is open to all members willing to deposit at least EUR 2,500.
The second opportunity will be for members who receive a beet
delivery payment in 2016 and will have the same lower limit.
COSUN SUGAR SYSTEMThe cooperative has the ambition to grow all its activities. We
have identified growth opportunities in the sugar market with
the abolition of the European quota system. We are inviting
our members to grow with us. The system enables us to set the
amount of sugar beet ourselves based on projections of the
long-term sales opportunities for sugar.
Members can apply for LLBs in proportion to their current basic
reference quota. As the shares are linked to the basic reference
quota and the three out of five system will be abolished, the
new system will be simpler. Growers who want to expand can
subscribe for new LLBs that will be issued in August. They can
then deliver more beet as from the 2017 harvest. Members will
still be able to transfer their entitlements to other members
under the new system.
A number of other matters will be amended on the
introduction of the Cosun sugar system. The quality standard
for sugar content, for example, will be raised to 17% and the
extractability rate to 91. The batch premium will be abolished,
the early delivery premium will be slightly higher and the late
delivery premium will not be available until 1 December, but will
rise slightly faster than in the past.
The profit for 2015 was in line with expectations, lower than that for 2014 but better than forecast.The historically low sugar prices inevitably left their mark but some compensation was found in the low prices paid by Suiker Unie for its raw materials and the results from other activities. 2016 will be a transitional year towards a market without the common EU sugar market organisation.
11
COOPERATIVE ISSUES
COSUN ANNUAL REPORT 2015COSUN ANNUAL REPORT 2015
MEMBERS AND SHARES AS AT 31-12-2015 AS AT 31-12-2014
DISTRICT / SECTION Number of members Number of shares Number of members Number of shares
Zeeuwsch-Vlaanderen 736 8,870 742 8,907
Zeeland-Midden 630 7,807 642 7,884
Zeeland-Noord 340 4,638 350 4,673
Goeree-Overflakkee 215 3,538 222 3,616
West-Brabant 803 9,636 813 9,648
Zuid-Hollandse Eilanden 325 5,010 327 4,990
Holland-Midden 256 4,100 259 4,168
Kop van Noord-Holland 406 7,210 410 7,351
Oostelijk Flevoland 375 9,476 385 9,563
Noordoostpolder 618 9,747 622 9,781
Friesland 267 4,795 271 4,807
Groningen 1,045 20,621 1,052 20,637
Drenthe/Overijssel-Noord 969 22,571 994 22,623
Overijssel-Zuid/Gelderland 305 3,862 318 3,923
Oost-Brabant + Limburg (CSV COVAS) 1 28,061 1 28,061
Zuidelijk Flevoland 150 4,914 153 4,946
7,441 154,856 7,561 155,578
B-members CSV COVAS as at 1-05-2015 1,613 1,650
TOTAL members Cosun 9,054 9,211
LETTER FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICERThe historically low sugar prices in Europe had an
undeniable impact on Cosun’s financial results in
2015. In line with expectations, the fall in the results
had a knock-on effect on the price the cooperative
paid to its members for their beet. The beet price was
nevertheless higher than we had expected, due to the
good operating profits of all Cosun’s activities.
Step by step, we have very specifically strengthened our activity
portfolio in recent years. This is reflected in the spread of our
turnover. Alongside Suiker Unie – which is good for more than
a third of group turnover – Aviko also earns more than a third
of our turnover. The rest is earned by Sensus, SVZ and Duynie
together.
The spread is proving to have been a good choice because all
business groups made substantial contributions to the result in
2015. Our five activities were able to cushion the volatility in
the markets. We have laid a solid basis under our results and
created stable foundations for the beet price after 2017.
INVESTING IN PROFITABLE GROWTHOur goal is profitable growth in existing and new activities by
extracting more value from our vegetable raw materials. We
therefore made substantial investments in all our businesses in
2015, in total EUR 109 million. We have increased the capacity
of various factories, and invested in process improvements and
energy savings, in R&D facilities and, of course, in our staff.
They, after all, make sure everything runs smoothly.
To prepare ourselves for the new reality of the European sugar
market we worked on three fronts: market share, processing
capacity and raw material supply. We increased our market
share by supplying imported cane sugar to EU markets with
a sugar shortage. We will gradually increase the processing
capacity of the Dutch sugar factories in the years ahead to
28,000 tonnes of beet per day. We can keep our costs low only
if the factories are running at full capacity.
“Our goal is profitable
growth in existing and new
activities by extracting more
value from our vegetable
raw materials.”
Robert Smith
COSUN ANNUAL REPORT 2015
12
REPORT
“Even though the market
organisation is still in force,
we are already living in
the new reality.”
Dirk de Lugt
LETTER FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER
COSUN ANNUAL REPORT 2015
13
REPORT
This means that Suiker Unie needs more sugar beet. The beet
acreage and the sugar yield per hectare must – and can – be
increased. The cooperative will have to pay its growers a
good price for their beet to ensure they keep growing sugar
beet. This is a common interest of both the growers and the
cooperative.
MEMBER SUPPLY CERTIFICATESThe abolition of the EU market organisation for sugar also
marks the end of the quota system. Cosun has developed a
new, robust system to match the supply of sugar beet to the
demand for sugar. Cultivation and production are determined
by the ability to make a profit on the sale of sugar. The profit
we forecast for the year determines the allocation ratio. It can
vary from about 90% to 110%. The new system is based on
a combination of the shares and the basic reference for each
member. The conversion will take place in 2016 and will form
the basis for the allocation as from 2017.
NEW REALITYEven though the market organisation will still be in force for
another year, we are already living in the new reality. This can
be seen in the volatility in European sugar prices, which will
continue to have an impact on our business in the future.
What we will offer in return as from 2017 is the security of
the minimum beet price paid by Cosun, which is higher than
the current EU price, plus the members’ bonus and plus the
ability to increase beet cultivation if a member wishes to do so.
And we are certainly intending to consolidate our lead in the
sustainable cultivation and processing or sugar beet. Without it,
we will be unable to sell our sugar at a good price.
All cooperative sugar factories in the Netherlands joined forces
fifty years ago this year. A couple of years later, the EU sugar
market organisation was introduced. In the past 50 years we
have created a solid cooperative that is strong enough to rise to
the challenges of the new reality.
Dirk de Lugt Robert Smith
Chairman of the Board Chief Executive Officer
Breda, 17 March 2016
14
REPORT
COSUN ANNUAL REPORT 2015
FINANCIAL PERFORMANCE
RESULTSIn 2015, operating profit including non-recurring items came
to EUR 59 million (2014: EUR 110 million). Recurring EBITDA
(earnings before interest, tax, depreciation and amortisation)
amounted to EUR 167 million, versus EUR 202 million in 2014.
The lower earnings also meant the members’ bonus was lower.
This payment to the cooperative’s members is part of the beet
price. For 2015 it came to EUR 69 million (2014: EUR 108
million). A reasonable beet price could therefore be paid to the
members despite the low sugar prices in the EU. The members’
bonus is recognised in the regular operating profit as a cost of
raw materials. The net profit came to EUR 46 million
(2014: EUR 79 million).
PERFORMANCE OF THE BUSINESS GROUPSThe low sugar price in the EU reduced Suiker Unie’s turnover.
The business could still profit from the higher prices agreed in
sales contracts concluded in previous years and thanks to the
good cost and market position, it turned in a good result in
the circumstances even if it was significantly lower than in the
previous year. The Dutch sugar factories had a relatively short
but good campaign. The factory in Anklam (Germany) also had
an excellent campaign and booked a profit.
The sugar yield per hectare in the Netherlands was 13.9 tonnes
in 2015. This is less than in the record year of 2014 but still
well above the long-term average. During the campaign, which
lasted 99 days in the Netherlands, we produced 790,000 tonnes
of sugar. Owing to the high production volume in the 2014
sugar campaign, about 190,000 tonnes had been transferred
owing to the sugar market organisation. It qualifies as the first
quota sugar of the 2015 campaign.
Aviko improved its results again in 2015, thanks in part
to higher sales at good prices. In Europe, sales of potato
specialities in particular were higher. Outside Europe, sales of
both French fries and potato specialities were higher, especially
in Central Asia and Japan. The margin was strengthened by
favourable cost prices. The result on the potato granules and
flakes activity was slightly lower than in the previous year.
Sales from Europe were about 9% higher. The result of the
Chinese flakes activity was reduced by the pressure on margins
in the Chinese market.
Despite a limited increase in sales, inulin producer Sensus
posted a lightly lower result than that for 2014, which had
included a one-off income item. Growing competition is
exerting pressure on selling prices and margins. More chicory
was processed during the campaign than in 2014, even though
it started later. Settled weather meant the inulin remained of
very good quality throughout the campaign.
SVZ’s results were comparable with those for 2014. Results were
firmer in the European market but slightly lower in America.
Demand for fruit juices is falling but demand for vegetable
juices is rising. To optimise the production infrastructure it
was decided to close one of the smaller factories in Poland. Its
production was transferred to SVZ’s main production facility in
Poland.
Duynie Group managed to post a significant improvement in its
results despite lower turnover and sales. All the group’s activities
performed better than in 2014. Sales to the biogas industry
were higher and results on the starch activities recovered, with
higher sales of non-food starch being made in the potato
segment. The integration of earlier acquisitions and the
streamlining of the corporate departments again contributed to
a further reduction in costs.
Cosun’s results for the year were better than expected, albeit lower than in 2014. At EUR 1,948 million, turnover was 8% down on 2014. Operating profit came to EUR 59 million. Suiker Unie’s turnover and results were hit particularly hard by the lower sugar prices. Some compensation was found in higher results on other activities.
15
REPORT
COSUN ANNUAL REPORT 2015
FINANCIAL INCOME AND EXPENSETotal financial expense amounted to EUR 6 million owing to
the limited use of external financing. This is slightly higher
than in 2014. The penultimate tranche of the debt payable
to institutional investors was repaid in 2015. A considerable
distribution was also made to members under the beet
delivery/business termination regulations. These payments
were made from our own funds. Investments in tangible and
intangible fixed assets were again higher than depreciation and
amortisation in 2015. We invested to increase the production
capacity of the sugar activities and of the French fries and
potato flakes activities. We also began work to build a new
Cosun Innovation Center at the Nieuw Prinsenland Agro & Food
Cluster which is being developed by Suiker Unie in Dinteloord.
An additional financing source was obtained in 2015 with
the introduction of the Cosun members’ loan programme.
Under this programme, which is open only to the members of
Cosun, members can lend part of their beet delivery/business
termination payments each year to the cooperative for a fixed
term of between two and five years.
TAX BURDENThe effective tax rate for the year was 14.7%. This is
considerably lower than in the previous year (25.8%). The tax
burden was lowered in 2015 by tax facilities for innovative
activities, research & development and environmental
investments. Liquidation losses were also responsible for a one-
off reduction in the tax burden.
CASH FLOWCosun generated a cash inflow of EUR 54 million in 2015,
less than in 2014 on account of the lower operating profit.
Furthermore, working capital was higher, chiefly due to an
increase in inventories and a decrease in current liabilities.
Investments were financed from cash flow and available cash
positions.
INVESTMENTSInvestments in tangible and intangible fixed assets amounted
to EUR 109 million (2014: EUR 112 million). The investments
in the sugar activities were made chiefly to increase production
capacity and make it more flexible. Regular replacement
investments were also made. A part of the master plan,
investments were also targeted at renewing process automation
in the factories, increasing the diffusion capacity of the factories
in Vierverlaten and Anklam and increasing the evaporation
capacity at the sugar factory in Dinteloord.
At Aviko, we invested in increasing the production capacity and
flexibility of the French fries factories. As part of the BetaFib®
innovation project, we invested in a pilot production line. A start
was also made on the construction of the Cosun Innovation
Center, which is expected to be taken into service in the
second half of 2016. The other investment projects related to
replacements and capacity increases at Sensus, SVZ and Duynie.
BALANCE SHEETTotal assets as at 31 December 2015 amounted to EUR 1,773
million. The decline in comparison with the previous year
end was attributable to a sizeable distribution among a large
proportion of the members under the beet delivery/business
termination regulations. The total distribution amounted to
approximately EUR 180 million (2014: EUR 135 million net).
The payment was made from cash and cash equivalents.
Furthermore, a sum of USD 55 million was repaid on the long-
term USPP loan in 2015. As a result, the cash position was
EUR 276 million lower. The distribution under the beet delivery/
business termination regulations reduced group equity by
EUR 92 million to EUR 1,165 million (31 December 2014:
EUR 1,257 million). At the same time, group equity rose to
66% of total assets at the end of the year (31 December 2014:
63%).
The group’s financial position remains strong, despite the
substantial distribution to members in 2015 and the distribution
that will be made in 2016. We expect no significant changes in
these circumstances in 2016.
FINANCIAL PERFORMANCE
16
REPORT
COSUN ANNUAL REPORT 2015
BEET PRICEThe members’ bonus for 2015 was set at EUR 69 million. It was
paid as part of the quota beet price. The quota beet price was
also paid on 5% of the beet delivered above quota in 2015. In
the previous year members had received the quota beet price
on 7% of the surplus beet.
The basic price for quota beet (EUR 26.25 per tonne) was based
on the EU minimum price and was equal to that paid in 2014.
The members’ bonus came to EUR 12.25 per tonne (2014: EUR
18.50). In total, the price paid to members per tonne of quota
beet with 16% sugar content and an extractability rate of 87
came to EUR 38.50. The price paid to members per tonne of
quota beet with average extractability and sugar content was
EUR 43.01. The average price paid for surplus beet was EUR
27.89.
The average sugar yield per hectare was lower than in 2014:
13.9 tonnes versus 15.1 tonnes. The average financial yield
per Dutch beet grower was EUR 3,301 per hectare. This is EUR
1,053 less than in the previous year on account of the decline in
the members’ bonus and the lower yield per hectare.
PROSPECTSThe volatility of the price of agricultural products has a major
impact on Cosun’s results. The effect of the low sugar price in
the EU in 2015 can clearly be seen in the result on the sugar
activities for the year. A further decline in Suiker Unie’s results is
foreseen for 2016. This is the outcome of higher costs owing to
the short campaign in 2015 and continued low selling prices for
sugar in the European and world markets. The sugar activities
will still turn in a profit, however, in the current year. Aviko is
expected to report a further increase in its results as its costs
continue to decline.
Sensus’s results will also be slightly higher owing to an increase
in volume. SVZ, by contrast, will see a limited fall in its results
on slightly lower sales. We expect Duynie’s results to improve on
those for 2015 owing to a recovery on turnover and margins.
Cosun will continue to invest in strengthening its position in
the various market segments in the year ahead by both organic
growth and, if feasible, by strategic acquisitions, efficiency
improvements and innovation. We do not expect any significant
change in the number of employees.
FINANCIAL PERFORMANCE
2011 2012 2013 2014 2015
43.0150.1867.2668.8055.69
80
0
60
40
20
Quota beet price in euros per tonne
■■ Quality payment (based on sugar content and extractabilityrate of the beet).
■■
Members’ bonus (based on the cooperative’s results). ■■ Basic price (based on the EU minimum price).
17
REPORT
COSUN ANNUAL REPORT 2015
CORPORATE SOCIAL RESPONSIBILITYAs a cooperative and a group, Cosun is responsible for everything that happens within the business groups. How safe are working conditions? How do we use the raw materials, energy and water? And we are equally responsible for how our raw materials are grown and for the inconvenience to local residents caused by our factories.
A business meets the needs of its customers and creates value
for its stakeholders. The figure below shows what we did with
the value Cosun created in 2015. We paid the members for
the beet they supplied, we paid salaries to the employees and
remitted taxes to the government.
We also invested some of the results in the further growth and
development of Cosun.
Added value (in millions of euros) 2015 2014
Net turnover 1,948 2,115
Other revenue and stock movements 39 42
Payments to suppliers of raw materials -/- 981 -/- 1,055
Payments to other suppliers -/- 364 -/- 367
Added value created 642 735
Employees (salaries) 255 251
Members (beet payments and members’ bonus) 230 283
Financiers (interest) 6 4
Government (taxes) 8 27
Value created for stakeholders 499 565
Retained profit 46 79
Depreciation and amortisation 98 91
Value created for reinvestment 143 170
Employees (salaries) 40%
Members (beet purchases and members’ bonus) 36%
Financiers (interest) 1%
Government (taxes) 1%
Retained profit 7%
Depreciation 15%
Reinvested value 2015
Value for stakeholders 2015
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REPORT
PRIORITIESAs well as creating value for our stakeholders, principally the
members of the cooperative, we have identified four areas where
we are able and willing to bring our influence to bear:
• optimising cultivation in recognition of our responsibility to
growers and the environment;
• optimising production processes with a view to maximising the
use of raw materials and conserving the environment;
• investing in staff skills and a safe working environment;
• respecting the interests of other stakeholders and being
accountable to them.
OPTIMISING CULTIVATIONSustainable cultivation means realising the highest possible yield
per hectare from the fewest inputs. New varieties and modern
processing techniques are good for the soil and biodiversity.
Soil conservation and biodiversity are important factors for the
longer-term security of food supplies. We and our growers are
therefore investing in the further improvement, optimisation and
sustainability of cultivation. Cosun is an active participant in many
initiatives, such as the SAI platform for sustainable agriculture,
the Skylark Foundation for sustainable arable farming and the
Beet Cultivation and Biodiversity project. The agricultural services
and agronomists at our business groups help the growers and
suppliers of our raw materials improve their crops. Programmes
such as Unitip (Suiker Unie) and Cimone (Sensus) increase insight
and transparency in the production chains.
OPTIMISING PRODUCTION PROCESSESOur factories need energy to process raw materials into
foodstuffs and intermediate products. Energy consumption
per tonne of production is a measure of the efficiency of our
production processes: the lower the better. The key figure on
page 9 of this report shows that we emit about 0.22 tonne of
CO2 per tonne of production. In 2010, Cosun had set itself the
goal of using 2% less energy per annum. Although we have
not succeeded every year we are on track to reach our target of
consuming 20% less energy by 2020. Further savings, however,
require an ever larger investment to cut consumption by 2% per
annum. The relatively low production volumes in 2015 (down
8%) made it more difficult to achieve the targeted saving of per
tonne.
The food industry uses a lot of water to wash raw materials,
to processes raw materials and to clean machinery, etc. Our
vegetable raw materials also contain a lot of water, which we can
re-use after it has been treated. The total volume of water we
consume is directly related to the size and quality of the harvests
we process.
We have therefore not set a target for water consumption
in absolute terms. We used more groundwater per tonne of
finished product in 2015 than in 2014, chiefly because of the
variation in the crop and changes in the portfolio.
Cosun classifies its waste as separated or mixed. Separated waste
is sorted before it is sent for disposal. The types of waste we sort
are paper and cardboard, wood, stones, plastic and chemicals.
What remains is mixed waste. For every thousand kilogrammes
of product leaving our factories, there is about six kilograms of
waste that cannot be processed and has to be disposed of. This
figure was less in 2015 than in 2014, and roughly in line again
with the figure for 2013. Cosun aims to minimise the volume of
waste and to make the best possible use of residual materials.
EMPLOYEESCosun cares about all its employees, both permanent and
temporary. It offers every one of them a safe workplace and
opportunities to develop themselves and their skills. Good
working conditions are important for both the employees’
wellbeing and their productivity. A completely new code of
conduct was introduced throughout the group in 2015: the
Cosun Principles. Care for employees is one of the central
themes; it highlights the importance of the workplace being
socially and physically safe. A variety of activities will draw
attention to this in 2016.
Safety at work remains a point of concern. The figures show that
there were 24 lost-time accidents per 1,000 employees in 2015,
in comparison with 26 in 2014. Cosun will take extra measures
to reduce systematically the number of lost-time accidents. The
number of incidents, near-accidents and unsafe situations will
also be given higher priority: prevention is better than cure.
Sickness absenteeism was virtually unchanged at 3.9%, well
below the average for manufacturing companies (CBS, 2014:
4.8%).
In full time equivalents the number of employees at Cosun was
slightly higher, rising from 3,799 in 2014 to 3,912 in 2015.
Temporary employees are not included in these figures. The
increase was due almost entirely to Aviko.
Staff often enjoy a long career with us and accumulate a great
deal of know-how and experience. It is important that they
continue to develop their know-how and skills so that they
remain employable. We therefore invest in our people by offering
them education and training. The average number of training
days in 2015 was three per employee.
CORPORATE SOCIAL RESPONSIBILITY
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VERSLAG
COSUN ANNUAL REPORT 2015
SUGARS AND FOODThe Sugars & Food Platform was set up in 2015. It is made up
of three links in the sugar sector: the beet growers, the sugar
industry and sugar processors in the Netherlands. Representing
their common responsibilities, they seek contact with civil society
organisations, the media and consumers to open up a dialogue
on sugar and its use in food. The relationship between food and
health has been the subject of scientific research, media interest
and countless stories. It is not disputed that consuming more
calories than are expended leads to overweight. But there are
differences of opinion on the causes and the measures to tackle
the problem. The platform wants to contribute to a balanced
understanding of sugar and its role in food, based on factually
correct information on the production and consumption of
sugars.
ACCOUNTABILITYMore and more companies are selecting their suppliers on the
basis of their working conditions and social policies. Cosun’s
major international customers also set exacting standards. And
they want to be reassured that the Cosun business groups
can meet them. To this end, Sensus and SVZ are members of
Sedex, and Aviko is a member of the RSPO (the Roundtable on
Sustainable Palm Oil). They are audited by these organisations
and the findings can be read by customers and others
stakeholders.
Cosun has also introduced the Cosun Principles for directors,
managers and staff. They describe how we should conduct
ourselves and what we can be held accountable for, not only to
each other but also to our customers, business associates and the
society of which we are a part. The Cosun Principles are available
on our website at www.cosun.com – About Cosun – Corporate
Governance.
More information on the measures we take and their results
can be found in our CSR Report for 2015 at
www.annualreport-cosun.com. Annual reports from previous
years are also available from this website.
CORPORATE SOCIAL RESPONSIBILITY
COSUN ANNUAL REPORT 2015
All Cosun’s business groups are engaged in innovation.
More than 70 specialists work on a variety of projects at the
Cosun research and development centre (CFTC). They include
process technologists, chemical analysts, food technologists,
microbiologists and other specialists. They not only carry out
projects closely related to the existing operations but also
develop new products and applications based on vegetable
raw materials and residual flows. Other projects cover process
innovations, with the aim of lowering costs and raising
profitability. The knowledge and experience gained by the R&D
specialists are put to good effect within the group. A method
developed for one business group to cut energy consumption,
for example, will often be used by other Cosun business groups.
The same is true of water treatment techniques that help the
businesses meet their energy requirements. More joint research
projects were started in 2015.
Construction of the Cosun Innovation Center commenced
during the year. This new research and development facility
is being built as part of the Nieuw Prinsenland Agro & Food
Cluster next to the sugar factory in Dinteloord. The centre
will house a pilot factory to test new products and processes.
Customers can also commission small-scale production runs.
CFTC’s staff in Roosendaal will move to the new facility in
Dinteloord. They will soon be working there on innovative
projects with other specialists and counterparts from the
business groups. Cosun invests EUR 15 million in research and
development every year.
INNOVATION AND DEVELOPMENT
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SUIKER UNIESugar and sugar specialities
COSUN ANNUAL REPORT 2015
In line with expectations market conditions were exceptionally
difficult for Suiker Unie in 2015. Sugar prices on the world
market weakened until the final quarter and then showed
signs of a cautious recovery. Global consumption increased by
about 1.5 to 2% but the world’s sugar stocks are exceedingly
high. Competition on the European sugar market, moreover,
was fiercer. European prices accordingly fell to their lowest
level in 50 years. Suiker Unie produced considerably less sugar
because part of the production from the 2014 harvest had been
carried over to the 2015 season. Despite the lower turnover,
Suiker Unie made a profit and in comparison with most of its
competitors performed relatively well thanks to the efficiency
and processing capacity of our sugar factories.
The pulp and molasses markets were good. Suiker Unie’s
biomass digesters, which produce green gas from beet remains
and beet pulp, was the same as in 2014. Suiker Unie supplied
33.5 million m3 of green gas to some 24,000 households in
both the Netherlands and Germany and part of its vehicle fleet
drives on green gas.
MANAGING BY COSTSIn anticipation of the end of the EU sugar market organisation
in 2017, Suiker Unie made substantial investments in its
factories. Those in Dinteloord and Vierverlaten took new
diffusion towers into service; the factory in Anklam will follow
in 2016. Investments were also made in the evaporation plant
to cut energy consumption and increase capacity.
More efficiency, lower production costs, innovation, more value
from residual flows and more flexible processing must enable
Suiker Unie to retain its market position in the future. Low costs
will be a critical success factor in the sugar market after 2017,
as competition becomes more intense and prices more volatile.
To increase the flexibility of processing, a third thick juice
tank will be installed at the factory in Dinteloord. Two major
investment projects are being prepared for new beet washing
facilities in both Vierverlaten and Dinteloord.
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FEWER BEET PROCESSEDAs some of the sugar was held over to the next selling season
last year, the 2015 campaign was far shorter, lasting just 99
days in the Netherlands. The sugar beet acreage was more than
20% smaller and fewer beet were processed. The sugar yield
in the 2015 campaign was good at 13.9 tonnes per hectare.
Nearly 83 tonnes of beet were grown per hectare. The average
sugar content was 16.7% on account of the less favourable
weather conditions in the summer and autumn.
In Germany, too, the campaign progressed well, lasting 113
days. Bio-ethanol was produced for the first time from thin juice
during the campaign and from thick juice during the summer
months. This yielded a considerable energy saving.
SUSTAINABILITYSustainability is becoming an increasingly important sales
factor. Suiker Unie was awarded Gold status by the Sustainable
Agricultural Initiative (SAI) in 2015. As one of the few sugar
producers in Europe to have been honoured in this way, it is a
leader in the field of sustainable sugar beet cultivation. The SAI
consists largely of large international food manufacturers that
promote sustainable agriculture.
Suiker Unie encourages its beet growers to use as little energy,
fertilisers and crop protection agents as possible. Participants in
the Unitip programme record all relevant data on their activities,
for example their field operations and use of fertilisers. The
digital crop registration system then uses the information to
advise the farmers how they can better protect the environment
and increase their yields per hectare at lower cost.
EcoVadis, the independent supplier rating organisation,
awarded Suiker Unie Gold status again in 2015. On behalf of
more than 40 multinationals, EcoVadis rates over 150 industries
on four themes: environment, fair labour practices, ethics/fair
business practices and supply chain. Suiker Unie ranks among
the top 2% of all businesses taking part in the EcoVadis rating
system.
COSUN ANNUAL REPORT 2015
SUIKER UNIE
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AVIKOPotato products and specialities
Aviko can look back on a good year, one in which it increased
its turnover and made good use of its opportunities for growth.
It took steps in 2015 to improve the quality of its turnover and
launched the Fit for Growth programme. The programme’s goal
is to reduce costs and increase the factories’ output. In addition,
it procured more potatoes at contractually agreed prices, which
had a favourable impact on stabilising the result.
SALES GROWTHThe proportion of potato specialities in sales increased in 2015.
Higher added value specialities such as purees, gratins, hash
browns, speciality snacks and meals performed particularly well
in western Europe. French fries consumption has been stable for
some time in this market and was slightly higher in central and
eastern Europe. Aviko expects to realise a further increase in
these markets as their purchasing power increases.
Aviko has the ambition to be a leader in French fries and potato
specialities in the European food service market (restaurants and
snack bars).
In the retail segment it focuses on a range of basic products
and more luxurious variants of both French fries and specialities,
products that meet the consumers’ demands for quality,
convenience and price.
Outside Europe Aviko saw an increase in sales of both French
fries and specialities, especially in central Asia and Japan. The
growth was attributable chiefly to the emerging middle classes
in these regions and the growing popularity of quick service
restaurants and casual dining. Sales of French fries were also
higher in China. The capacity of the factory in Hebei was tripled
in 2015. Sales of potato flakes also increased sharply. The snack
market is growing worldwide, partly because consumers are
increasingly choosing shaped snacks made with potato flakes or
potato granules as a basic ingredient.
Aviko is the market leader in the snack industry here. The
factory in China produces chiefly for the local market, where
margins are coming under pressure. The Dutch factory also
profited from the growing demand for potato granules and
flakes. Exports of these raw materials to Asia were higher.
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PROFITABLE GROWTH Aviko launched Fit for Growth during the year. This programme
is designed to improve the quality of turnover by optimising
the product portfolio, strengthening the production capacity
of the factories and increasing efficiency, in combination with
the efficient use of raw materials. Aviko is creating a platform
for further growth that will also improve its cost base. The
programme’s ultimate goals are a stronger market position and
growth. To cut costs, Aviko is planning to reorganise a number
of its production sites and its head office.
The Fit for Growth programme will be consistent wherever
possible with the Total Productive Management (TPM) quality
improvement programme. Maintenance agreements have been
made with the technical service at the factory in Steenderen,
for example. The two programmes have generated so many
improvement proposals that Aviko was awarded A status under
the BRC certification in 2015 as a result. It satisfies the very
highest quality and food safety standards.
RAW MATERIAL PRICES Position management, controlling the fluctuations in raw
material prices, is part of Aviko’s strategy. The wide fluctuations
in potato prices can have a big impact on results. The early
potato harvest in 2015, for example, had an unfavourable
impact on the price paid for the raw material. The main harvest,
however, was markedly better owing to the rainfall later in the
season, and spot prices remained relatively low. To create long-
term stability for both the market and the supply chain, Aviko
concluded more fixed price contracts with growers in 2015.
COSUN ANNUAL REPORT 2015
AVIKO
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SENSUSInulin
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Sensus, a manufacturer of the functional food ingredient
inulin, reported good results for 2015. Sales and turnover
were higher in a market characterised by fiercer competition
on the one hand and an increase in the supply of alternative
soluble fibres on the other. In the European market, the higher
sales were again attributable to an increase in sales of infant
formula based on milk powder to Asia, particularly China.
In southeast Asia, where Sensus concentrates on sales to
manufacturers of baby and infant formula and products for
healthy gut flora, sales growth flattened. This was partly due
to the weaker economic growth in the countries in this region
and partly to the higher exports of baby formula from Europe.
In the American market, sales of inulin were higher in the dairy
segment. Greek yoghurt variants performed particularly well
during the year.
NEW GROWTH OPPORTUNITIESAn important issue among customers in both Europe and
America is lowering the sugar content of foodstuffs. The new
inulin variants that Sensus has developed offer a solution.
Their application in baked goods such as cakes and biscuits
can reduce the sugar content by as much as 30% without
compromising their sweetness. Sensus successfully introduced
several applications in the European market in 2015 to reduce
the sugar content of breakfast cereals, confectionery and,
especially, children’s products. Sales of inulin applications in
animal feed, a market that Sensus entered relatively recently,
jumped sharply in Europe and several South American
countries. Sensus is also extracting more value from the chicory
root by preparing the pulp for use as a food fibre.
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ABOVE-AVERAGE YIELD Sensus can look back on a good campaign with few
interruptions. Yields at the start of the chicory campaign were
below average. As the year progressed, however, the yields
(volume and weight) rose above average thanks to a growth
spurt during the harvesting season. The inulin content of the
roots, though, was markedly lower than in previous years.
YIELD PER HECTARE Sensus expects demand for inulin to increase further in the
years ahead. To meet this growing demand, it wants to increase
the chicory yield to 10 tonnes of inulin per hectare over the
next ten years. To meet this target, the fields will have to yield
4% more per annum. To help the growers, Sensus developed a
special growing programme in 2015. A personal crop monitor
will inform the growers in detail of their performance and
enable them to make comparisons with other farmers. They can
also analyse the causes of lagging yields.
IMPROVEMENT PROGRAMMES IN THE FACTORIESSensus is continuing to improve the processes in its factories.
At the plants in Roosendaal and Zwolle, it has been working
on efficiency and performance improvements for many years.
Both factories have been granted the TPM Excellence Award.
By developing this programme further they hope to achieve the
Consistency Award in the next few years. Sensus has also given
high priority to training and education, partly with a view to
staff deployability. Safety at work is a key issue.
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SVZFruit and vegetable products
SVZ can look back on a good year. The decision to concentrate
on the added value segment of fruit and vegetable purees and
concentrates in combination with effective management of the
position in raw materials meant results were stable again in 2015.
The sales volume was lower but turnover was virtually unchanged.
Position management is also an important part of SVZ’s strategy.
Fluctuations in the supply, the quality of the fruit and vegetables
and prices fed through into the results. To spread this risk, SVZ
processes a wide variety of fruit and vegetables and locates its
production facilities on different continents.
In Europe it concentrates on red fruit (raspberries, strawberries,
cherries and redcurrants). A dry and warm season led to lower
crop yields, especially for raspberries, lower sales volumes at
sharply higher prices, and higher turnover. The juice market was
stable. Vegetables such as beetroot, kale and cucumbers, are
increasingly being added to fruit juices on health grounds and
performance in this area was accordingly good.
Demand for vegetable purees and juice concentrates grew strongly
in America. In Japan, SVZ’s main market in Asia, sales of carrot,
spinach and kale juice and other vegetable concentrates were
unchanged despite competition from other drinks. Demand for
vegetable juices and fruit purees is also gaining momentum in
other countries in Asia, such as Thailand, the Philippines and South
Korea. SVZ has identified growth opportunities in these countries.
NATURAL COLOUR CONCENTRATESSVZ also took other decisions during the year. It sold Added
Value Color Solutions, for instance, to DD Williamson (DDW)
because the specialised sales market for these products was an
uncomfortable match with SVZ’s own market channels. DDW
will take over the development and marketing of the products.
SVZ will continue to produce and sell the natural simple colour
concentrates. The company has signed an agreement with
DDW to supply and mix colour concentrates.
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PRODUCTION INFRASTRUCTUREOptimising the production processes in the factories is a
constant concern of SVZ. It seeks efficiency improvements,
quality improvements and waste prevention. SVZ, too, applies
TPM to prevent waste.
In Poland, SVZ took the next step in improving its production
infrastructure by closing the factory in Karczmiska and
transferring and modernising the production line for
concentrated purees to Tomaszow.
An investment in a state of the art production line for
concentrated purees further improved quality, strengthened
sustainability and increased processing capacity. By processing
the crops close to where they are harvested, which is at the
heart of SVZ’s ‘puree/concentrate from fresh’ strategy, it
has strengthened its grip on supplies and cut freezing and
transport costs. In addition, colour, taste and nutritional value
are optimised. Specialised evaporation techniques are used to
process the vegetables at an exceptionally low temperature.
SUSTAINABILITYSustainability is as strategically important to SVZ as food safety
and the efficient planning of cultivation, logistics, processing
and distribution. SVZ promotes quality and control throughout
the agro supply chain. It processes the harvests as closely as
possible to the fields. A team of agronomists constantly studies
how growers can increase the sustainability of their crops. They
work closely with the growers, and advise them on alternative
crop plans, seed selection, the use of crop protection agents
and artificial fertilisers, food safety and regulatory compliance.
SVZ expects its growers to be certified and to undergo
necessary audits. The intensive cooperation between SVZ and
the growers strengthens the quality of product monitoring.
EcoVadis awarded SVZ Gold status during the year.
SVZ
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DUYNIE GROUPAnimal feed, starch applications and energy products
Duynie is a specialist in extracting value from organic co-
products of the food industry. Under the name Duynie Group,
its activities are organised into five divisions: Feed (animal
feed), Ingredients (raw materials for pet food), Modified Starch
(added value starch products), Renewables (biomass as a raw
material for energy generation) and Innovations (new product
development). Duynie has grown strongly in recent years
through acquisitions. The group has established a particularly
strong position in the European feed market. Diversification
of its utilisation of co-products has also created a more stable
base for turnover. Being able to process the entire supply of co-
products has increased the group’s sales openings and its ability
to respond more flexibly to changes in supply. By building on
this position, Duynie will improve the quality of its turnover.
Total turnover was reduced by lower prices but the group’s
profit for the year was higher than in 2014, chiefly on account
of the better spread of activities cross the application areas.
Raw material purchases were stable, amounting to 4.5 million
tonnes.
ANIMAL FEED AND RAW MATERIALS FOR PET FOODThe fall in meat and milk prices also exerted pressure on animal
feed prices. Duynie Feed nevertheless maintained its sales
thanks to its efficient organisation and further improvements
within the company. Sales of ingredients for pet foods also
developed well. Duynie joined SecureFeed in 2015 and now
satisfies the stricter food safety requirements that will be
introduced for animal feed suppliers in the dairy sector as from
2016.
STARCH ACTIVITIESNovidon enjoyed the results in 2015 of the improvement
programme it had carried out at its factories in the Netherlands,
the United Kingdom, the Czech Republic and Belgium. The
factories are more efficient and the quality of the products is
higher. With its introduction of high quality product series,
Novidon increased its sales in higher added value segments.
Demand for its new adhesive application for bags developed
well and demand for wallpaper paste also grew.
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COSUN ANNUAL REPORT 2015
Sales of drilling starch in the oil industry were lower on account
of the low oil prices.
BIOMASSThe AgriBioSource (ABS) subsidiary supplies biomass for energy
production and water treatment products. The decline in sales
openings in the animal feed sector led to more co-products
being offered for fermentation in this sector. ABS is one of the
few companies in the biogas industry to have a Responsible
Biomass Certificate (RBC). The certificate is similar to the GMP+
system for animal feed and attests to the socially responsible
production of the biogas.
INNOVATIONDuynie has set itself the challenge of innovating better and
smarter applications to extract value from organic co-products.
Research and development are therefore of great importance.
Duynie has its own research facilities and also works with
European research institutes, TNO and universities in the
Netherlands and abroad. Internally Duynie undertakes research
and development projects with CFTC. During the year, the
group developed its first consumer product, eco cat litter. It is
being sold in the United Kingdom under its own brand name.
DUYNIE GROUP
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COSUN ANNUAL REPORT 2015
NEW BUSINESSApplications in the biobased economy
The New Business activity (which includes Cosun Biobased
Products) develops functional ‘green’ chemicals and materials
based on vegetable raw materials. The products meet the
growing demand for renewable alternatives. The business
model requires a great deal of cooperation in many areas, from
research and product development to collaboration on patents
and licences. The group develops new processes, products and
applications by combining its knowledge with that of other
Cosun business groups and third parties such as potential users
and research centres.
The development of biobased solutions for a variety of markets
is a continuous process. The time to market and subsequent
market development are difficult to foresee. The customer
base for applications using the biodegradable descaling agent
Carboxymethyl Inulin (CMI) was further broadened during
the year. CMI is an environmentally friendly alternative to
many petrochemical agents and can be used in, for example,
detergents. The paper, sugar and oil industries use CMI to treat
process water and cooling water.
Progress was also made with BetaFib®, a micro-cellulose fibre
made from vegetable residual flows. The fibre can be used
in paints, liquid detergents and other applications to ensure
that all components remain properly mixed. Following positive
experiences at the pilot plant in Roosendaal, production will be
scaled up in 2016. Various projects are still being carried out
with potential customers to match the product more precisely
to their applications.
PROMISING DEVELOPMENTSNew Business identified the most promising areas in the market
for new products and applications during the year. They are
health promoting proteins and ingredients (food) and building
blocks and biopolymers (non-food). Biopolymers are produced
from vegetable raw materials, such as inulin and BetaFib®.
To support the development New Business appointed an
Advisory Board during the year. Its members have a wealth of
experience in innovation. Strides were also taken to strengthen
the structure of innovation processes within Cosun in order
to increase the likelihood of success, for example by means of
Early Stage Business Planning.
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NEW BUSINESS
PULP2VALUE Cosun Biobased Products and six European partners were
awarded a grant in 2015 to develop the Pulp2Value project. The
project will run until 2019 with the objective of developing an
integrated and profitable refinery system for sugar beet pulp.
High value components can be extracted in various steps for
use in cleaning agents, personal care products, and the oil and
gas, paint and coatings, and food industries.
COSUN ANNUAL REPORT 2015
MANAGEMENT ISSUES
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RISK PROFILE
RISK ANALYSISCosun recognises the importance of risk management to
identify and mitigate risks at an early stage. All business groups
periodically identify, analyse and evaluate potential material risks
with regard to both their likelihood and their impact. This process
is periodically repeated during the budget cycle and the main
risks and quantified and assessed. The results of these analyses
are used to define actions to mitigate risk wherever possible. The
progress made implementing these actions is reported to the
Executive Board.
As part of the four-year cycle, a comprehensive risk analysis will
be made in 2016 with the aid of a detailed framework to assess
all risks and their impact on the business groups’ activities.
RISK PREPAREDNESSOur risk management and internal control systems seek
the right balance between effective and professional
entrepreneurship on the one hand and an acceptable risk profile
on the other.
Cosun is active in a variety of agro-industrial markets in several countries and has to contend with strategic, operational, financial and compliance risks that are inherent in its activities. Its strategy is to control these risks wherever possible by maximising the value it extracts from its raw materials, by developing new product/market combinations, and by means of operational excellence, a targeted product/market strategy, and a sharp focus on cooperation with growers, customers and suppliers, among the Cosun businesses themselves and with knowledge centres and educational institutions.We try to mitigate the risks where possible and make the most of the opportunities.
COSUN ANNUAL REPORT 2015
RISK MANAGEMENT STRATEGYOur internal control system is designed to:
• control the risks attaching to the business activities;
• identify on a timely basis risks that had previously not been
recognised as risks or had been considered immaterial;
• prepare action plans for each risk if desirable and possible to
control and/or mitigate each risk;
• monitor the effectiveness and efficiency of business
processes, including administrative processes.
IMPROVEMENTS IN THE RISK MANAGEMENT SYSTEMFurther steps were taken last year to mitigate safety risks.
Prevention programmes were developed to increase safety at
work: safe working conditions for the staff, the prevention
of errors during production and the prevention of fire and
other material damage at our business groups. Reports
were also introduced to improve insight into purchasing and
selling positions and minimise potential mismatches and take
additional measures if necessary.
RISK CATEGORY STRATEGIC PILLAR RISK PREPAREDNESS AND EXPECTED RETURN
Strategic Profitable growth • Medium/high: right balance between risk and return.• Medium: size of investments in manufacturing footprint relative to projected return
and payback.
Tactical/operational Operational excellence/cost control
• Low in respect of safety issues. • Medium in other areas/issues, with coordination of targets and related costs and
attention to profitability.• Moderate in respect of position management, with a focus on insight into
potential risks.
Financial control &Compliance
• Low in respect of financing, interest and currency risks.• Low in respect of product and food safety. • Low in respect of full compliance with local legislation and regulations.
MANAGEMENT ISSUES
COSUN ANNUAL REPORT 2015
RISK PROFILE
34
Further investments were made to bring about a more
structured, systematic approach to innovative projects.
More attention was focused on shortening the lead time for
innovations and increasing the group’s innovative strength so
that chances can be exploited faster.
Responsibility
Primary responsibility for the internal control system lies with
the boards of the business groups themselves. The Executive
Board and the Board have final responsibility for Cosun’s risk
management and internal control systems.
Design
Cosun introduced the Cosun Principles in 2015 and distributed
them to all the cooperative’s staff and managers. The Principles
are a revised version of the Cosun Code of Conduct issued
in 2000. A whistle blower scheme and the Cosun Speak Up
line have also been introduced to lower the threshold to
report cases that might conflict with the Cosun Principles,
anonymously if desired.
Cosun has a financial and control manual that contains detailed
guidelines on financial reporting and accounting. The business
groups’ financial managers report functionally to Cosun’s Chief
Financial Officer.
Management
• All business groups draw up three-year operating plans.
Detecting and pro-actively responding to risks and
opportunities are part of the operational planning procedure
and are considered in monthly and quarterly reports. The
results are discussed on a monthly basis at Executive Board
level and on a quarterly basis at Board and Supervisory Board
level.
• Risk management is an integral part of the operating plans
and budgets and the internal monthly management and
financial reports.
Monitoring
• The external auditor conducts an annual audit in order to
express an opinion on the consolidated accounts and the
businesses concerned. The external auditor is appointed
by the Members’ Council and reports primarily to the
Supervisory Board. The audit scope and depth are determined
annually in consultation with the Executive Board and the
Supervisory Board, whereby the minimum work required for
the audit opinion is extended to cover specific risks, business
processes or locations that the Supervisory Board or the
Executive Board believes should receive additional attention.
• The general managers and finance managers of all legal
entities in which Cosun has a majority interest sign a Letter
of Representation each year for the entities for which they
are responsible. In it, they declare that they have acted in
accordance with internal guidelines and with the rules arising
from legislation and regulations.
• Recommendations arising at every level from the external
audit are reported to and followed up by the Executive Board.
The Executive Board subsequently reports to the Board and
the Supervisory Board.
RISKS The fall in sugar prices had a significant impact on Cosun’s
results in 2015. In the future, too, the price volatility of our
agricultural raw materials (potatoes, fruit, and vegetables) and
price movements in the sales markets for sugar, potato products
and fruit and vegetable products may have a significant impact
on Cosun’s results in any given year.
The table hereafter show the main risks to our strategy and the
measures we have taken to control them where economically
feasible.
COSUN ANNUAL REPORT 2015
RISK PROFILEMANAGEMENT ISSUES
35
RISK CATEGORY: STRATEGIC
RISK RISK CONTROL MEASURE IMPACT ON RESULTS
• End of the European common market organisation for sugar in October 2017, after which EU sugar production will no longer be regulated.
• Strong price fluctuations/fall in the sugar price.
• Growth targets in existing and new product/market combinations (biobased products and renewable energy).
• Cosun is made up of several business groups. Its activities are spread across several raw materials and sales markets.
• Investment in processing and storage capacity to increase the efficiency, flexibility and cost leadership of the sugar factories.
• Continuous focus on improving the cultivation of sugar beet.
High due to volatility of market prices.
High due to volatility of market prices.
• The customer chooses alternative products for its product composition (substitution risk).
• Offer added value through intensive cooperation with customers and product development. Broad product portfolio at all business groups.
• Cost leadership relative to both direct and indirect competitors.
Medium
Main growth opportunities forfurther growth: • Growth of world population
and increased prosperity, also in emerging markets.
• Further development of the biobased economy.
• Acquisition opportunities.
• Spread of sales across different geographical markets and sales specifically targeted at growth markets.
• Cooperation between Cosun Biobased Products and partners, knowledge centres and in strategic alliances to develop new product/market combinations based on agricultural raw materials processed by the Cosun business groups.
• Corporate development directed at scouting potential acquisition candidates and internal programmes to facilitate the fast integration of acquisitions into existing business groups.
Medium
• Changes in consumer food behaviour (health, sustainability).
• Transparency and clear information on nutritional value and sustainability of Cosun products.
• Further development of innovative, tasty and safe food ingredients with functional added value.
• Initiatives to enhance food safety in the supply chain in cooperation with customers and suppliers.
Medium
RISK CATEGORY: TACTICAL/ OPERATIONAL
RISK RISK CONTROL MEASURE IMPACT ON RESULTS
• Staff and product safety. • Focus on a safe workplace and safe working practices through training, physical measures, procedures, targets and reports.
• Certification, track and trace system and HACCP procedures.
Low
• Volatility of agricultural and other raw material and energy prices.
• This risk is inherent in Cosun’s campaign-related activities. Risk are controlled by means of position management.
• Continuous focus on cost-efficient production to reduce energy consumption, transport and the use of packaging materials, combined with long-term price and volume agreements.
High
• Influence of the weather on availability and quality of raw materials (harvest risks).
• Spread of raw material processing across several growing regions (also within countries) for sugar beet, potatoes, chicory roots, fruit and vegetables.
• Production organisations are prepared to adapt their processes to changes in the quality of raw materials.
• Support and advice provided to growers by the group and industry associations for specific growing and weather conditions (e.g. spraying and lifting advice for growers).
Medium
• Loss of a major customer. • Very limited reliance on one major customer at Cosun level. Impact may be greater at business groups depending on their customer portfolios.
Low
• Business continuity / disruption in the factory.
• Specific risk management programmes, investments, inspections and maintenance to prevent disruption.
• Insurance: Cosun has several general group insurance programmes to cover product and other liabilities, fire, consequential loss, etc. The consequential loss programme insures assets at appraised value plus an appropriate, tailored cover for consequential losses. The financial robustness of the insurers is periodically assessed. Depending on the size of the risk, cover is arranged with several insurers.
Medium
COSUN ANNUAL REPORT 2015
MANAGEMENT ISSUES
36
RISK PROFILE
RISK CATEGORY: FINANCIAL MANAGEMENT
RISK RISK CONTROL MEASURE IMPACT ON RESULTS
• Mismatch between buying and selling positions for raw materials and end products.
• Frequent monitoring of buying and selling positions by senior managers of the business groups.
Low
• Financing and interest risks. • Cosun’s financial position is very healthy. At year-end 2015, the group had no net debt. Cosun contracted a five-year syndicated bank facility in 2014, with two options to renew the facility for a period of one year. This option was exercised in 2015 and the term was lengthened for one year. Long-term financing consists of a US private placement programme (USPP) comprising several long-term loans with remaining terms of three years. Only the final tranche of the loans still has to be repaid.
• The group has a central treasury organisation organised as an in-house bank. Subsidiaries, with the exception of joint ventures and liquidity management, are financed at group level.
• Loans are spread wherever possible over a select group of counterparties with a short-term rating of at least A2 or equivalent. All Cosun businesses report their liquidity forecasts for the coming 12 months every month to reduce the risk of unforeseen liquidity shortages. The quality of the liquidity forecasts was improved in 2015.
Low
• Foreign exchange risk. • The greater part of turnover is earned in the eurozone. The main currency exposure is concentrated on the US dollar, the Polish zloty and the pound sterling. Internal policy is to hedge the foreign exchange risks arising from the operating and financial activities wherever possible.
Low
• Risk of underfunding in the defined benefit pension schemes (pension risk).
• The policies of the group’s pension administrators are known for their strict risk management. They have largely covered themselves against the consequences of lower interest rates, for example, and the investment policy is characterised by widely diversified portfolios spread across a broad range of investment categories. Investment transactions have been contracted out in full to external parties.
• The funding rates of Cosun’s pension funds at year-end 2015 was around 110%. As from 1 January 2014, the group is no longer obliged to make contributions if the pension schemes are underfunded. The social partners will consult each other to reach a solution if the schemes are underfunded. The assets and liabilities of Aviko’s pension fund were transferred to Pensioenfonds Grafische Bedrijven as of 31 December 2015.
Low
RISK CATEGORY: COMPLIANCE
RISK RISK CONTROL MEASURE IMPACT ON RESULTS
• Legislation and regulations. • Implementation of the Cosun Principles for all members of staff and whistle blower scheme.
• Whistle blower scheme and external reporting opportunities for cases that do not comply with the Cosun Principles via the Cosun Speak Up line (with active response to reports).
• Observance of the corporate governance code for cooperatives (NCR code).• Annual signing of an internal Letter of Representation.
Low
• Tax risks. • Cosun is active in many countries. The group seeks a transparent relationship with the tax authorities. Cosun has signed a horizontal supervision agreement with the Dutch tax authorities.
• Activities are structured so that corporation tax is coordinated centrally. Responsibility for VAT, salaries tax, social insurance, etc. lies with the individual entities. The policy and related management processes are periodically assessed.
Low
COSUN ANNUAL REPORT 2015
MANAGEMENT ISSUES
37
CORPORATE GOVERNANCE
Good employment practices, integrity, respect, oversight,
transparent reporting and accountability are the main elements
of Cosun’s corporate governance policy. Cosun endorses
and observes the code of conduct issued by the Netherlands
Cooperative Council for Agriculture and Horticulture.
GOVERNANCE MODELCosun has a traditional governance model. Control of the
cooperative lies with the members, in part through their
election of the Board. Most members of the Board are also
members of the cooperative; three members are not. Members
of the cooperative also form a majority on the Supervisory
Board so that the members have the deciding vote. The external
members of the Board and the Supervisory Board are nominated
and appointed in recognition of their expertise and external
networks. The Board has delegated day-to-day management to
the Chief Executive Officer of the Executive Board.
BOARDThe Board’s primary task is to run the cooperative. It has final
responsibility for the development and implementation of the
policy of both the cooperative and the business groups that
make up Cosun. The Board consists of nine members, three
external members and six members who are also members of
the cooperative.
SUPERVISORY BOARDThe Supervisory Board supervises the policy conducted by the
Board. From its independent position, it advises the Board and
the Members’ Council on request and otherwise. Together
with the external auditor, the Supervisory Board examines the
cooperative’s annual accounts. There are six members: four are
members of the cooperative and two are external.
MEMBERS’ COUNCILThe members of Cosun elect the executive committees of the
districts/sections in which their farms are located (see also page
11 of this report). All Cosun’s district committees together
form the Members’ Council. On a proposal of the Board, the
Members’ Council elects the members of the Board.
To Cosun, corporate governance is the way it regulates the relationships between the members of the
cooperative, the Board, the Supervisory Board, the Executive Board and the staff.
On a proposal of the Supervisory Board, the Members’ Council
elects the members of the Supervisory Board. On a proposal
of the Board it also adopts the annual report and accounts,
the Articles of Association and the regulations. It also acts as a
sparring partner for the Board. The Members’ Council has 61
members, all of whom are members of the cooperative.
YOUTH COUNCILThe Youth Council is the breeding ground for management
talent within the cooperative. The members of the Youth
Council represent candidate and young members. In
consultation with local district and section managers, the Youth
Council itself is responsible for succession when necessary.
More information on corporate governance can be found on
the website www.cosun.com under the heading About Cosun –
Corporate Governance. The Code of Conduct for cooperatives
has been posted on www.cooperatie.nl under NCR-code (in
Dutch).
On behalf of the Board,
D.H. de Lugt G.M. van Tilburg
Chairman Vice-chairman
Breda, 17 March 2016
Districts
Members’ Council
Board
Executive Board
Youth Council
Supervisory Board
Members
ROYAL COSUN
COSUN ANNUAL REPORT 2015
MANAGEMENT ISSUES
38
REPORT OF THE SUPERVISORY BOARD
The Supervisory Board discussed many matters in 2015. Together
with the Board, it considered the management of the cooperative
(governance). The Supervisory Board also agreed with the
Board that this subject would be discussed further in 2016.
The Supervisory Board also studied the HRM policy at group
level in depth, paying particular attention to the development
of management talent. The Supervisory Board met on seven
occasions during the year, with three meetings being held jointly
with the Board. It again followed the entire financial cycle, from
the operating plans via the quarterly reports and the December
projections to the annual accounts and the annual report.
ADVICE AND SUPERVISIONThe Supervisory Board reviewed the strategy again three years
after having adopted it in 2012. The re-evaluation prompted
some minor changes. We found that the strategy had proved its
worth in the face of the unprecedented fall in sugar prices on
the world market and in Europe. We also found that the non-
sugar business groups were continuing to work hard to achieve
the goals set for 2022. The volatility of both the purchasing
and selling markets demands the continuous attention of
the management in order to achieve the required return.
The operating plans for 2016-2018 were submitted to the
Supervisory Board for assessment. The largest activities,
Suiker Unie and Aviko, are implementing cost saving
programmes, often in combination with investments to improve
efficiency and quality. The Supervisory Board recognises the
importance of this but notes that it is only worthwhile if there is
also a market on which they can sell their products at a profit.
The Supervisory Board therefore studied and considered the
plans meticulously before approving them.
Innovation and new activities were also prominent items on
the agenda in 2015. A separate business group was set up for
them in 2014 with its own business plan, Cosun New Business.
It periodically reports upon its procedures and progress. Project
evaluation has been professionalised by the appointment of an
advisory board with external specialists.
The Cosun R&D organisation will move to new premises in
Dinteloord in 2016. New Business and Cosun Biobased Products
will also move into the same building.
This investment in the innovative strength of Cosun will provide
more opportunities for synergy from cooperation.
Several issues affecting the members were discussed during the
year, including the ending of the EU sugar market organisation
and the associated amendment of the Articles of Association
and regulations. The delivery entitlement will in future be based
on the new member supply certificates and beet prices will be
calculated on the basis of a new quality system. These issues
affect both the individual members and the collective, the
cooperative. There was therefore every reason to weigh up all
the interests. The Articles of Association and the regulations
were also modernised as part of this process and adapted to the
latest legislation and governance codes.
FINANCIALCosun constantly invests in improving the profitability of its
business groups so that it can continue generating added value
for its members in the future. Some of the members received
a beet delivery/business termination payment in 2015. It was
paid from funds that had remained within the cooperative over
the past 15 years and then released. In view of the substantial
outflow of capital, a new savings system was introduced, the
Cosun members’ loan scheme. This financial product is open
to members only. It was reviewed and approved by both the
Supervisory Board and the financial regulators. As the first
opportunity to deposit funds with Cosun met all expectations in
2015, the scheme will be continued.
The auditor has examined the annual accounts for 2015
and issued an unqualified opinion on them. The audit was
completed smoothly thanks to the high quality of internal
reporting. Questions about critical factors at our businesses
were answered and the Supervisory Board was reassured that
the audit findings gave a good view of Cosun’s financial health.
The follow-up to the management letter was also discussed,
and explanations were provided if the recommendations had
not yet been acted upon. The Supervisory Board submits the
annual report for 2015 and recommends that the Members’
Council approves it.
The Supervisory Board oversees the execution of Cosun’s policy. From an independent position, it advises the Board and the Members’ Council on request and otherwise.
MANAGEMENT ISSUES REPORT OF THE SUPERVISORY BOARD
39
COSUN ANNUAL REPORT 2015
MEMBERS AND PERFORMANCEBiense Visser, an external member of the Supervisory Board, was
re-elected unanimously during the Annual General Meeting.
Otherwise, there were no changes in the composition of the
Supervisory Board. The Supervisory Board reviewed its own
performance and held individual performance interviews with all
its members. A constructive critical attitude helps to safeguard
the quality of decision-making and raise it to a higher level. At
the beginning of every meeting since 2015, for example, the
Supervisory Board has named the main points on the agenda so
that it can work as efficiently and as effectively as possible.
To retain a feeling for the activities carried on by Cosun, several
working visits were made to the businesses every year. In 2015
we successively spoke to the managers of Suiker Unie’s German
operations in Anklam, with the managers of Duynie Novidon
(starch activities) in Nijmegen and with the managers of Aviko
Rixona in Venray. These meetings were particularly valuable for
the Supervisory Board to gain a proper understanding of the
business, the management and what was happening.
During the visit to Anklam, we also met several beet growers.
The Supervisory Board exchanged ideas with the specialists at
a major bank on the future of the European sugar industry and
visited an innovative production company at which Biense Visser
is also a supervisory director.
A WORD OF THANKSThe Supervisory Board would like to express its gratitude to
the Board, the Executive Board and all members of staff for
the financial results for the year and to thank everyone who
contributed to them. The turbulence that has demanded so
much commitment and flexibility from us all is set to continue
but the Supervisory Board has every confidence in the resilience
of our cooperative and therefore in its future.
On behalf of the Supervisory Board
J. Bartelds W.A. Blijdorp
Chairman Secretary
Breda, 17 March 2016
MANAGEMENT ISSUES
COSUN ANNUAL REPORT 2015
40
MEMBERS OF THE BOARD, SUPERVISORY BOARD, EXECUTIVE BOARD AND WORKS COUNCILBOARD Chairman D.H. de Lugt De Cocksdorp
Vice-Chairman G.M. van Tilburg Emmeloord
Deputy Vice-Chairman B.R. van Doesburgh Loenen a/d Vecht
Members A.J.B.P. Bossers Langeweg
J.M. Klompe Wolphaartsdijk
Ms. G. Prins Nieuwkoop
J.A. Smid Dalerpeel
J.H.D. Voncken Eys
S. Wijkstra Zeist
Secretary J.W.M.J. van Roessel
SUPERVISORY BOARD Chairman J. Bartelds Tweede Exloërmond
Vice-chairman J.L. van Driel Nieuw-Beijerland
Secretary W.A. Blijdorp Middenmeer
Members E.H.W.J.E. Michiels Horst
Ms. J.P. Rijsdijk Leiderdorp
B.T. Visser Haarlem
EXECUTIVE BOARD Chairman R.P. Smith CEO
Members I.H. Blankers director Sensus
G.C.A.M. Corsmit director Duynie Group
Ms. A.E. ter Laak director SVZ
A.J. Markusse director Suiker Unie
P.H. Merckens director Aviko
G.H. de Raaff director Cosun Biobased Products
Ms. T.A. van de Werken director Finance & Control
Secretary Ms. M.J.C.W. van den Maagdenberg director Mergers & Acquisitions
CENTRAL WORKS COUNCIL Chairman J.A.A. Stoopen CFTC
Secretary C.W. van Agtmaal SVZ
Members H. Arfman Aviko
A.C.J. van der Borst Suiker Unie
H.A.M. Flipsen Suiker Unie
S.C.A.M. Geerts Cosun
A. Kayabasi Aviko
C. Kooiman Duynie
H. Maan Sensus
G.G.M. Wilmer Aviko
C. Wijma Suiker Unie
as at 31 December 2015
More information is available at www.cosun.com under About Cosun – Corporate Governance. The website provides relevant personal particulars on the members, the principal and secondary positions they hold and – where applicable – the date of their appointment, term of office, their eligibility for re-election, etc.
ANNUAL ACCOUNTS
42
COSUN ANNUAL REPORT 2015
ANNUAL ACCOUNTS 2015 CONSOLIDATED BALANCE SHEET
Notes 31-12-2015 31-12-2014
ASSETS
Fixed assets
Intangible fixed assets (1) 123.9 137.2
Tangible fixed assets (2) 604.3 577.1
Financial fixed assets (3) 24.9 28.2
753.1 742.5
Current assets
Inventories (4) 633.8 605.8
Trade and other receivables (5) 290.9 280.4
Cash and cash equivalents (6) 95.1 370.5
1,019.8 1,256.7
Total assets 1,772.9 1,999.2
EQUITY AND LIABILITIES
Group equity
Capital and reserves (7) 1,140.6 1,230.5
Minority interests (8) 24.3 26.3
1,164.9 1,256.8
Provisions (9) 77.0 84.1
Non-current liabilities (10) 68.1 59.5
Current liabilities (11)
Current liabilities to credit institutions and liabilities of a financing nature 12.8 61.0
Other current liabilities, accruals and deferrals 450.1 537.8
462.9 598.8
Total equity and liabilities 1,772.9 1,999.2
CONSOLIDATED BALANCE SHEET (after profit appropriation; in EUR million)
ANNUAL ACCOUNTS 2015
43
COSUN ANNUAL REPORT 2015
CONSOLIDATED PROFIT-AND-LOSS ACCOUNT
FOR THE FINANCIAL YEAR Notes 2015 2014
Net turnover (14) 1,947.7 2,114.5
Changes in inventories of finished products 21.4 21.9
Other operating income (15) 17.6 20.5
Total operating income 1,986.7 2,156.9
EU levies (16) 11.0 11.0
Cost of raw materials and consumables (17) 1,211.1 1,337.8
Cost of outsourced work and other external costs (18) 350.6 351.0
Staff costs (19) 255.0 250.9
Amortisation and depreciation on intangible and tangible fixed assets 97.6 91.3
Other changes in the value of intangible and tangible fixed assets (20) - 2.4
Other operating expenses 2.2 2.6
Total operating expenses 1,927.5 2,047.0
Operating profit 59.2 109.9
Interest receivable and similar income 2.0 4.2
Interest payable and similar charges -/- 8.1 -/- 7.8
Financial income and expense (21) -/- 6.1 -/- 3.6
Result from ordinary activities before taxation 53.1 106.3
Taxation (22) -/- 7.8 -/- 27.4
Share in results from participating interests 0.0 0.5
Result from ordinary activities after taxation 45.3 79.4
Minority interests 0.2 -/- 0.3
Net result 45.5 79.1
(in EUR million)
CONSOLIDATED PROFITAND LOSS ACCOUNT
ANNUAL ACCOUNTS 2015
44
COSUN ANNUAL REPORT 2015
CONSOLIDATED CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR Notes 2015 2014
Operating profit 59.2 109.9
Depreciation and amortisation 97.6 91.3
Other value adjust - 2.4
Changes in provisions (24) 0.2 3.9
Changes in working capital (excluding cash and cash equivalents and short-term bank overdrafts)
(24)
-/- 91.4
-/- 18.1
Cash flow from business operations 65.6 189.4
Interest received (paid) -/- 6.6 -/- 5.9
Income tax paid -/- 4.2 -/- 14.5
Other movements -/- 0.8 3.2
-/- 11.6 -/- 17.2
Cash flow from operating activities 54.0 172.2
Investments in (in)tangible fixed assets -/- 108.6 -/- 102.5
Proceeds from the sale of tangible fixed assets 3.8 0.8
Acquisitions of participating interest -/- 2.0 -/- 19.3
Cash flow from investing activities -/- 106.8 -/- 121.0
Gross distribution under sugar beet payment/business termination regulations (30) -/- 179.0 -/- 9.8
Changes in long-term receivables -/- 5.8 -/- 2.6
Changes in non-current liabilities (24) 9.4 -/- 0.5
Changes in current liabilities to credit institutions and liabilities of a financing nature -/- 48.2 -/- 8.2
Cash flow from financing activities -/- 223.6 -/- 21.1
Changes in cash and cash equivalents -/- 276.4 30.1
Cash and cash equivalents at the beginning of the year 370.5 338.2
Cash and cash equivalents at participating interests acquired 1.0 2.2
Cash and cash equivalents at the end of the year 95.1 370.5
CONSOLIDATED CASH FLOWSTATEMENT (in EUR million)
ANNUAL ACCOUNTS 2015
45
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
NOTES TO THE CONSOLIDATEDANNUAL ACCOUNTS
TRANSLATED FINANCIAL STATEMENTSThese Annual Accounts is an English translation of the original Dutch publication. In the event of textual inconsistencies between
the English and the Dutch versions, the latter shall prevail.
GENERALCoöperatie Koninklijke Cosun U.A. (hereinafter: ‘Cosun’), with its registered office in Breda, the Netherlands, processes and
prepares raw materials, mostly from agricultural sources, producing semi-manufactures for the international food and beverage
industry and the food service industry (restaurants, caterers and wholesalers), and finished products that are sold to customers
through retail outlets. The group also processes organic residuals into products such as bio-ethanol and animal feed.
The activities are classified as follows:
• Sugar activities: sugar and bio-energy from residual currents (Suiker Unie).
• Potato activities: potato products, such as chilled, frozen and dried potato products and potato specialities (Aviko and Rixona).
• Other activities: fruit and vegetable products (SVZ), inulin (Sensus), animal feed and starch (Duynie Group) and innovation
(Cosun Biobased Products).
APPLICABLE STANDARDSThe annual accounts have been prepared in accordance with the legal requirements as set out in Title 9, Book 2 of the Netherlands
Civil Code. For the cooperative profit and loss account, Cosun has availed itself of the exemption available under Section 402, Book
2 of the Netherlands Civil Code.
CONSOLIDATION PRINCIPLESThe consolidated annual accounts include the financial data of Cosun and its group companies and other companies controlled
by the company. Group companies acquired during the year under review are included as from the date at which direct or indirect
influence can be exercised on the business and financial policy. The results of group companies sold are incorporated up to the
moment the overriding control ended. Intercompany payables, receivables and transactions, as well as profits already recognised on
these within Cosun but not yet realised, are eliminated in the consolidated annual accounts. The group companies are consolidated
in full with the third-party minority interest being presented separately. Joint ventures are consolidated proportionally. In accordance
with Articles 379 and 414, Book 2 of the Netherlands Civil Code, a list of data on group companies and other participating
interests has been filed with the Chamber of Commerce.
ACQUISITIONS AND DISPOSALSThe following acquisitions took place in 2015:
Duynie acquired the remaining 10% shares in Beuker S.R.O., Slovakia, on 29 October. Cosun increased its interest in Eemshaven
Sugar Terminal C.V. by 32.7% as from 9 December, giving it power of control over policy.
The following acquisitions took place in 2014:
Aviko took a 60% interest in Martin Amberger Kartoffelverarbeitung Dolli-Werk GmbH & Co KG, Germany, as of 24 March 2014
and took a 51% interest in the joint venture Aviko SnowValley Food (Hebei) Co. Ltd., China, as of 7 August 2014.
Duynie acquired 100% of the shares in James & Son (Grain Merchants) Ltd. as of 30 May 2014 and the remaining 40% of the
shares in Duynie Ltd. as of 30 June 2014, both located in the United Kingdom.
No significant disposals took place in 2014 or 2015.
(in EUR million)
ANNUAL ACCOUNTS 2015
46
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
GENERALThe accounting policies adopted for the valuation of assets and liabilities and determination of the result are based on the historical
cost convention. Insofar as not stated otherwise, assets and liabilities are shown at nominal value. An asset is included in the balance
sheet when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
cost of the asset can be reliably measured. A liability is included in the balance sheet if it is expected to result in an outflow from the
entity of resources embodying economic benefits and the amount of the obligation can be measured with sufficient reliability.
The income and expenses are accounted for in the period to which they relate.
POLICIES FOR THE TRANSLATION OF FOREIGN CURRENCIESThe reporting currency and the functional currency of the annual accounts of Cosun is the euro (EUR). The costs and income arising
from transactions in foreign currencies or monetary receivables and payables, are translated at the average exchange rate or the
rate prevailing at balance sheet date respectively. Translation gains and losses are taken to the profit and loss account. The net
investment in foreign participating interests is translated at the exchange rate prevailing at balance sheet date. Foreign currency
profit and loss account items of foreign participating interests are translated at the average exchange rate. Translation gains and
losses are taken directly to the statutory reserve for exchange rate differences as part of Cosun’s group equity, less tax effects
if applicable. If a foreign operation is fully or partially sold, the respective amount is transferred from the reserve for translation
differences to the other reserves. Translation gains and losses on long-term financing and financial instruments used to hedge
exchange rate risks arising from foreign participating interests are treated accordingly.
NETTINGAssets and liabilities are shown net of each other in the annual accounts only if and in so far as:
• there is a reliable legal instrument to net and simultaneously settle the assets and the liability, and
• there is a firm intention to settle the net amount or the two items simultaneously.
FINANCIAL INSTRUMENTSThe financial statements includes the following primary financial instruments: loans granted, trade and other receivables, cash and
cash equivalents, loans received, other financing commitments, trade payables and other payables. The financial statements also
includes derivative financial instruments (derivatives).
PRIMARY FINANCIAL INSTRUMENTSPrimary financial instruments are initially recognized at fair value which includes the attributable transaction costs. After initial
recognition, primary financial instruments are carried at amortised costs using the effective interest method, less impairment losses.
The effective interest method is used to recognize transaction costs in the profit and loss account. Cosun applies nominal value if
the amortised costs are in line with nominal value. The fair value of cash and cash equivalents is equal to the nominal value; cash
and cash equivalents are freely available to Cosun unless stated otherwise.
ACCOUNTING POLICIES
ANNUAL ACCOUNTS 2015
47
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
DERIVATIVE FINANCIAL INSTRUMENTS (DERIVATIVES)Currency derivatives, interest derivatives and forward commodity transactions
Cosun uses derivatives to hedge the exchange rate, interest rate and price risk from balances and highly probable future sales
and purchases. Forward exchange contracts, interest rate swaps, forward commodity contracts and other derivative financial
instruments are used to hedge these risks. Derivatives are initially recognized at fair value. After initial recognition derivatives are
stated at cost or lower fair market value unless cost price hedge accounting is applied. At initial recognition the cost price is equal
to the fair value. Cosun applies cost price hedge accounting in order to simultaneously recognise both the results from changes in
the value of the derivatives and the future transaction in the profit and loss account.
If cost price hedge accounting is applicable the accounting policies are defined below:
• As long as the hedged financial asset or liability is not recorded in the balance, the derivative will not be recorded.
• As soon as the hedged position of the expected transaction leads to the recognition of a primary financial instrument, the gains
or losses associated with the derivative are recognised in the profit-and-loss account in the same period in which the primary
financial instrument affects profit or loss.
• Cosun periodically assesses the effectiveness of its hedging relationships. The results from the non-effective part of the hedge
relationship are included in the profit-and-loss account.
• Should the transaction no longer be expected to take place, so the derivative no longer meets the conditions for cost price
hedge accounting, or is sold, the accumulated profit or the accumulated loss is recognised in the profit-and-loss account.
• As soon as the derivative expires before the expected transaction has taken place the accumulated profit or accumulated loss
that has not been included in the profit and loss account is recognised as accrual and deferrals on the balance sheet until the
expected transaction has taken place.
• Translation gains and losses on primary financial instruments are compensated by changes in value of currency derivatives. The
book value of a currency derivative is carried by the difference between the applicable exchange rate as at balance sheet date
and the hedged exchange rate.
• The value of a currency derivative is amortized over the duration of the currency swap.
INTANGIBLE FIXED ASSETSGoodwill is the excess of the purchase price and the fair value of the identifiable assets and liabilities of the acquired participating
interest at the date of acquisition. Goodwill paid upon the acquisition of foreign group companies and subsidiaries is translated
at the exchange rate applicable at the moment of acquisition. The capitalised goodwill is amortised according to the straight-line
method over the estimated useful life, in general between 5 and 20 years.
Other tangible fixed assets (excluding CO2 emission allowances) are carried at cost net of accumulated depreciation and other
downward value adjustments.
Cosun obtained CO2 emission allowances at zero cost. The company has not recognized its surplus CO2 emission allowances
obtained for nothing. Cosun acquires emission allowances to meet future deficiencies. The acquired emission allowances are stated
at cost and will be charged to the result at time of use.
ANNUAL ACCOUNTS 2015
48
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
TANGIBLE FIXED ASSETSLand and buildings, machinery and equipment and other tangible fixed assets are stated at cost of purchase or manufacture, less
accumulated depreciation and other downward value adjustments. Grants and subsidies are deducted from the cost of purchase or
manufacture of the asset in question.
Depreciation is calculated as a percentage of the cost of acquisition or manufacture according to the straight-line method on the
basis of useful life. Land, tangible fixed assets in production and prepayments are not depreciated. Maintenance expenditure is only
capitalised if it extends the useful life of the asset.
FINANCIAL FIXED ASSETSParticipating interests where significant influence can be exercised over the business and financial policy are stated on the basis of
net asset value. Participating interests in which no significant influence is exercised are valued at the lower of cost and sustainable
realisable value. Participating interest with a negative net asset value are valued at nil. A provision is recognized if necessary.
Deferred tax assets, including off-settable tax losses, are stated insofar as it is deemed probable that these will be realised in future
and are calculated on the basis of the tax rate applicable at the time at which these are expected to be realised.
Other long-term receivables are carried at amortised cost, less a provision deemed necessary for uncollectability.
IMPAIRMENT OR VALUE ADJUSTMENT OF FIXED ASSETSCosun recognises intangible, tangible and financial fixed assets in accordance with accounting policies generally accepted for
financial reporting in the Netherlands. Pursuant to these policies, assets with a long life should be subject to an impairment test in
the case of changes or circumstances arising that lead to the suspicion that the book value of the asset will not be recovered. The
recoverability of assets in use is determined by comparing the book value of an asset with the future net cash flow that the asset is
expected to generate. In the case of a higher book value, the difference is charged to the result. Assets for sale are stated at book
value or lower market value, less selling costs.
INVENTORIESRaw materials and consumables are carried at the lower of cost in accordance with the FIFO (‘first in, first out’) method. Finished
products are valued on the basis of cost of manufacture, including the purchase costs of used raw materials and consumables
and the other costs directly attributable to manufacture. In addition, part of the indirect costs over the period of manufacture is
attributed to the cost of manufacture. Members’ bonus is not included in the valuation of inventory. Goods for resale are valued at
cost. Cost includes the purchase price plus additional related costs. Land designated as project development land is valued at the
historical cost of acquiring the land and other costs, which are directly attributable to the development.
When valuing inventories, account is taken of any value adjustment occurring on the balance sheet date including, if applicable,
lower net realisable value.
ANNUAL ACCOUNTS 2015
49
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
RECEIVABLESNon-interest bearing short term receivables are stated at nominal value. Interest bearing receivables are stated at amortized cost,
less a provision deemed necessary for uncollectability. Provisions are determined on the basis of individual assessment of the
collectability of receivables.
EQUITYPursuant to Guideline 620 of the Dutch Accounting Standards Board, the part (2%) of the paid-up capital that is payable on
demand by the members is recognised as a liability in the consolidated annual accounts. As a result the consolidated equity differs
from the equity in the cooperative annual accounts.
In so far as members are eligible to payment under the Sugar Beet Delivery Payment Regulations or the Cessation of Business
Regulations, the payment is charged to equity the moment it is paid.
A standard payment regulation applies when a member obtains shares. The present value of the amount payable is recognised
under receivables.
MINORITY INTERESTSThe third-party minority interests are valued at the third parties’ share of the net asset value.
PROVISION FOR DEFERRED TAX LIABILITIESInsofar as valuations for tax purposes differ from the policies described in this section, and these result in deferred tax liabilities, a
provision is formed for these liabilities, calculated according to the tax rate applicable at the time when they are expected to be
paid.
PENSIONS AND OTHER DEFERRED EMPLOYEE BENEFITSDutch pension plans
The main principle is that the pension charge to be recognised for the reporting period should be equal to the pension
contributions payable to the pension fund over the period. Insofar as the payable contributions have not yet been paid as at
balance sheet date, a liability is recognised. If the contributions already paid exceed the payable contributions as at balance sheet
date, a receivable is recognised to account for any repayment by the fund or settlement with contributions payable in future.
In addition, a provision is included as at balance sheet date for existing additional commitments to the fund and the employees,
provided that it is likely that there will be an outflow of funds for the settlement of the commitments and it is possible to reliably
estimate the amount of the commitments. The existence or non-existence of additional commitments is assessed on the basis of
the administration agreement concluded with the fund, the pension agreement with the staff and other commitments to staff. The
liability is stated at the best estimate of the present value of the anticipated costs of settling the commitments as at balance sheet
date. For any surplus at the pension fund as at balance sheet date, a receivable is recognised if the company has the power to
withdraw this surplus, if it is likely that the surplus will flow to the company and if the receivable can be reliably determined.
Foreign pension plans
Pension plans that are comparable in design and functioning to the Dutch pension system, having a strict segregation of the
responsibilities of the parties involved and risk sharing between the said parties (company, fund and members) are recognised and
measured in accordance with Dutch pension plans (see previous section). For foreign pension plans that are not comparable in
design and functioning to the Dutch pension system, a best estimate is made of the commitment as at balance sheet date. This
commitment should then be stated on the basis of an actuarial valuation principle generally accepted in the Netherlands.
ANNUAL ACCOUNTS 2015
50
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
Other deferred employee benefits
For other deferred employee benefits (such as jubilee) provisions are recorded. This provision is recorded at present value. The
calculation of the present value is based on commitments, expected average remaining working period and age of the employees.
PROVISIONSA provision is recorded when:
• There is a present legal or constructive obligation as a result of a past event.
• A reliable estimate can be made.
• It is probable that an outflow of economic benefits will be required to settle the obligation.
The provisions are valued at the discounted expected future cash flows.
NEGATIVE GOODWILLGiven its long-term nature, negative goodwill is presented as a non-current liability. The negative goodwill is recognised in the
profit and loss account in proportion to the weighted average of the remaining useful life of the acquired depreciable assets.
LONG-TERM LEASE OBLIGATIONSAgreements are assessed as to whether they contain a lease on the basis of economic reality on the contract date.
In case of financial lease (where the costs and benefits of the asset leased are borne entirely or almost entirely by the lessee) the
leased asset and the associated debt on the date on which the agreement is entered into are recognised in the balance sheet at the
lower of the asset’s fair value at the date on which the agreement was entered into and the present value of the minimum lease
payments. The initial direct costs borne by the lessee are included in the initial recognition of the asset. Lease payments are broken
down into interest expense and repayment and the outstanding obligation, using a constant rate of interest over the remaining net
obligation.
The capitalised asset leased is depreciated over the shortest period of the lease term or the useful life of the asset if there is no
reasonable certainty that the lessee will become the owner at the end of the lease term.
In case of operational lease, lease payments are charged to the profit and loss account on a straight-line basis over the lease term.
DETERMINATION OF THE RESULTNet turnover concerns the income from goods and services delivered to third parties, less discounts awarded and turnover tax.
Turnover is only recorded if there is reasonable assurance that future benefit will be accrued by the business and that such benefit
can be estimated reliably. Income is recorded when the significant risk and rewards of ownership have been transferred to the
buyer, receipt of the consideration is probable, and the associated costs and possible return of goods can be estimated reliably and
there is no continuing involvement of the legal entity with the goods.
Members receive a members’ bonus for the beet they deliver. The members’ bonus is recognised as cost of raw materials and
consumables.
The share in the result of participating interests represents Cosun’s share in the result of these participating interests (if the
participating interest is valued at net asset value) or the dividend received or other value adjustment (if the participating interest is
valued at cost).
ANNUAL ACCOUNTS 2015
51
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
Taxation on the result comprises both taxes payable and deductible in the short term and deferred taxes, taking account of tax
facilities and non-deductible costs. No taxes are deducted from profits if and insofar as these can be offset against losses from
previous years and a deferred tax asset had not been recognized. Taxes are deducted from losses if these can be offset against
profits in previous years. In addition, taxes will be deducted if and insofar as it may be reasonably expected that losses can be offset
against future profits.
FAIR VALUEFair value represents the amount for which an asset is traded or an obligation settled between properly informed independent
parties prepared to enter into a transaction.
THE USE OF ESTIMATESDuring the preparation of the annual accounts, the management must, in accordance with the general prevailing policies, make
certain estimates and assumptions that co-determine the stated amounts. The actual results may deviate from these estimates.
CASH FLOW STATEMENTThe cash flow statement has been prepared using the indirect method. Cash flows denominated in foreign currencies have been
translated into euros at average exchange rates. The cost of group companies acquired and the selling price of group companies
disposed of are included in cash flow from investing activities.
ANNUAL ACCOUNTS 2015
52
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
(1) INTANGIBLE FIXED ASSETSMovements in intangible fixed assets were as follows:
GOODWILL OTHER INTANGIBLE FIXED ASSETS
TOTAL
At cost as at 1 January 2015 246.6 28.9 275.5
Accumulated amortisation and other value adjustmentsas at 1 January 2015
117.5 20.8 138.3
BOOK VALUE AS AT 1 JANUARY 2015 129.1 8.1 137.2
Movements:
- Investments 0.6 0.6 1.2
- Disposals - -/- 0.3 -/- 0.3
- Amortisation -/- 12.3 -/- 2.0 -/- 14.3
- Exchange differences - 0.1 0.1
BOOK VALUE AS AT 31 DECEMBER 2015 117.4 6.5 123.9
At cost as at 31 December 2015 244.2 28.7 272.9
Accumulated amortisation and other value adjustmentsas at 31 December 2015
126.8 22.2 149.0
GOODWILLThe goodwill related to acquisitions, is amortized over 5 to 20 years. A period of 20 years applies to investments that have a
strategic character and an expected economic useful life of at least 20 years.
OTHER INTANGIBLE FIXED ASSETSThe other items under intangible assets, including software and licensing expenses, are amortised over a period of three to five
years.
ANNUAL ACCOUNTS 2015
53
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
(2) TANGIBLE FIXED ASSETSMovements in tangible fixed assets were as follows:
LANDAND
BUILDINGS
MACHINERY AND
EQUIPMENT
OTHER TANGIBLE
FIXED ASSETS
PREPAYMENTS AND IN
PRODUCTION
NOT USEDFOR
OPERATIONS
TOTAL
At cost as at 1 January 2015 380.8 1,036.8 65.7 9.6 7.0 1,499.9
Accumulated depreciation and impairmentsas at 1 January 2015
193.4
679.3
49.8
-
0.3
922.8
BOOK VALUE AS AT 1 JANUARY 2015 187.4 357.5 15.9 9.6 6.7 577.1
Movements:
- Investments 11.1 69.6 9.3 17.7 0.3 108.0
- Disposals -/- 1.6 -/- 0.6 -/- 0.3 -/- 0.3 -/- 0.7 -/- 3.5
- New in consolidation 5.7 1.7 - - - 7.4
- Transfer -/- 1.0 -/- 2.8 2.2 -/- 0.4 2.0 -
- Depreciation -/- 12.2 -/- 68.9 -/- 5.8 - - -/- 86.9
- Other changes in value -/- 1.5 1.5 - - - -
- Exchange differences 1.0 1.0 0.2 - - 2.2
BOOK VALUE AS AT 31 DECEMBER 2015 188.9 359.0 21.5 26.6 8.3 604.3
At cost as at 31 December 2015 398.8 1,085.9 75.1 26.6 8.3 1,594.7
Accumulated depreciation and impairments as at 31 December 2015 209.9 726.9 53.6 - - 990.4
The expected useful life and associated depreciation period is 10 to 40 years for the buildings, 10 to 20 years for the machinery
and equipment and four years on average for the other tangible fixed assets. The insured value of the buildings, machinery,
equipment and inventories is EUR 3.3 billion (2014: EUR 3.1 billion).
(3) FINANCIAL FIXED ASSETSMovements in financial fixed assets were as follows:
PARTICIPATING INTERESTS
RECEIVABLES FROM
PARTICIPATING INTERESTS
RECEIVABLES FROM
MEMBERS
DEFERREDTAX
ASSETS
OTHERRECEIVABLES
TOTAL
Balance as at 1 January 2015 4.9 0.9 4.8 9.6 8.0 28.2
Movements:
- Additions and issuances - - 7.0 0.5 - 7.5
- Repayments and releases - - -/- 0.2 -/- 0.7 - -/- 0.9
- Movements in favour of/charged to the result - - -/- 0.5 -/- 0.5 -/- 0.5 -/- 1.5
- Share in results of participating interests and dividend received
-/- 0.2
-
-
-
-
-/- 0.2
- Changes in consolidation -/- 0.9 -/- 0.1 - - - -/- 1.0
- Reclassified as short-term receivables - - -/- 0.9 - -/- 6.3 -/- 7.2
BALANCE AS AT 31 DECEMBER 2015 3.8 0.8 10.2 8.9 1.2 24.9
ANNUAL ACCOUNTS 2015
54
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
PARTICIPATING INTERESTSThe participating interests relate, among other, to the non-consolidated interest in Aviko Kloosterboer Verpakkingen B.V. and in
the Spanish potato specialities company Eurofrits, S.A. As significant influence can be exercised on these interests, they are stated
based on net asset value. The minority interest in Eemshaven Sugar Terminal C.V. was increased to a majority interest in 2015.
RECEIVABLES FROM MEMBERSThe net present value of the non-interest-bearing receivables from members (EUR 10.2 million) relate to the long-term portion of
amounts still to be deposited for issued shares (2014: EUR 4.8 million).
DEFERRED TAX ASSETSThe deferred tax assets item relates to the recognised available tax losses and temporary differences in the fiscal and commercial
valuations. It is expected that EUR 1.9 million (2014: EUR 2.2 million) of this receivable will be recovered within one year.
The tax loss carry-forwards, insofar as they are not included in the balance sheet under deferred tax assets, amounts to
EUR 6.2 million gross (2014: EUR 2.4 million).
OTHER RECEIVABLESOther receivables consist of capitalised costs incurred for the conclusion of a new financing agreement expiring in June 2020.
(4) INVENTORIES31-12-2015 31-12-2014
Land 10.4 8.8
Raw materials and consumables 69.0 56.7
Finished products and goods for resale 554.4 540.3
633.8 605.8
Of the inventories EUR 1.6 million (2014: EUR 13.9 million) is stated at lower market value. The provision for obsolete
inventories amounts to EUR 6.6 million (2014: EUR 6.1 million). The land included in inventory relates to grounds being
developed for business park AFC Nieuw Prinsenland near Dinteloord.
ANNUAL ACCOUNTS 2015
55
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
(5) TRADE AND OTHER RECEIVABLES 31-12-2015 31-12-2014
Trade accounts receivable 239.0 220.9
Receivables from members 0.9 2.6
Income tax receivable 1.4 6.7
Other tax receivables 21.1 26.0
Other receivables, prepayments and accrued income 28.5 24.2
290.9 280.4
OTHER RECEIVABLES, PREPAYMENTS AND ACCRUED INCOMEPrepayments and accrued income include an interest rate swap to hedge the interest rate risk of a loan with a term of less than one
year. As at 31 December 2015, the fair value of the interest rate swap was EUR 0.1 million negative.
(6) CASH AND CASH EQUIVALENTSAn amount of EUR 0.4 million (2014: EUR 10.0 million) is not available on demand. The blocked accounts at a Slovenian bank were
released in 2015.
(7) CAPITAL AND RESERVESFor a breakdown of capital and reserves, please refer to the notes to the cooperative annual accounts.
The consolidated statement of total recognised gains and losses is as follows:
2015 2014
Net result 45.5 79.1
Translation differences on foreign participating interests 4.3 2.8
Total result recognised by Cosun 49.8 81.9
(8) MINORITY INTERESTS2015 2014
Balance as at 1 January 26.3 17.8
Movements:
- Share in results -/- 0.2 0.3
- Capital movements and change in consolidation 1.1 9.0
- Dividend paid to minority interests and liquidation distributions -/- 3.4 -/- 1.4
- Exchange differences and other movements 0.5 0.6
BALANCE AS AT 31 DECEMBER 24.3 26.3
The minority interests consist largely of third-party shares in the Slovenian sugar factory Tovarna Sladkorja Ormoz d.d. in liquidation,
the potato-processing factory Gansu Aviko Potato Processing Co. Ltd, Rain Biomasse Wärme GmbH, the trading company
Limako B.V., Agri Bio Source Europe B.V.,Martin Amberger Kartoffelverarbeitung Dolli-Werk GmbH & Co. KG and Eemshaven Sugar
Terminal CV.
ANNUAL ACCOUNTS 2015
56
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
(9) PROVISIONS31-12-2015 31-12-2014
Deferred tax liabilities 33.9 41.2
Restructuring and reorganization 4.2 0.5
Pensions and other deferred employee benefits 21.9 21.7
Other provisions 17.0 20.7
77.0 84.1
Of the provisions an amount of EUR 54.6 million (2014: EUR 65.9 million) has an expected term of more than one year.
Movements in provisions were as follows:
DEFERREDTAX
LIABILITIES
RESTRUCTURING AND
REORGANISATION
PENSIONAND OTHER
DEFERRED EMPLOYEE
BENEFITS
OTHER PROVISIONS
TOTAL
Balance as at 1 January 2015 41.2 0.5 21.7 20.7 84.1
Movements:
- Additions 1.3 4.0 8.9 6.0 20.2
- Withdrawals -/- 8.6 -/- 0.5 -/- 7.9 -/- 8.0 -/- 25.0
- Mutation to profit and loss account - 0.2 -/- 0.8 -/- 1.7 -/- 2.3
BALANCE AS AT 31 DECEMBER 2015 33.9 4.2 21.9 17.0 77.0
DEFERRED TAX LIABILITIESThe provision for deferred tax liabilities arises from the timing differences between fiscal and commercial profit determination.
RESTRUCTURING AND REORGANISATIONThe provision for restructuring and reorganisation relates mainly to the restructuring announced at Aviko and the closure of a SVZ
factory in Poland.
PENSIONS AND OTHER DEFERRED EMPLOYEE BENEFITSSeveral pension plans and other deferred employee benefits apply within Cosun. The life-long pension plans for the staff of Cosun
Holding, Coöperatie Cosun (including Suiker Unie) and Sensus are administered by the Cosun occupational pension fund. As at
31 December 2015, the Aviko pension fund was wound up and the assets and commitments were transferred to the PGB pension
fund. This fund will administer the pension plans of the member companies of the former Aviko pension fund as from 2016.
COMPANY PENSION FUND ESTIMATED COVERAGEAS AT 31-12-2015
BASIC FEATURES PENSION SYSTEM
Pension fund Cosun 110.0 Average pay pension plan
The company pension fund has conditional indexation for inactive employees.
The pension scheme is based on a fixed contribution and average salary with conditional indexation. The employer has guaranteed
the accrual and indexation of the assets for the members of the Cosun Pension Fund to the end of 2023 in so far as they cannot be
funded from the contribution. The guarantee relates to indexation of up to 2% to the end of 2016 and is then lowered in steps to
1.2% in 2023. The additional commitment for the guaranteed indexation as at 1 January 2016 is recognised as a provision
(EUR 7.2 million).
ANNUAL ACCOUNTS 2015
57
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
A number of schemes have also been implemented within an industrial-sector pension fund or own management (long service
award and mortality schemes) by the company concerned. In the implementation of these various schemes, local legal frameworks
are taken into account and the regulations are carried out as described in the terms and conditions of employment.
The main actuarial assumptions were:2015 2014
Discount rate 2.0 % 2.0 %
Future salary increases 2.0 % 2.0 %
The Cosun pension fund applies the AG2014 projection table, adjusted for the High-Medium income class, as its mortality table.
OTHER PROVISIONSThe other provisions have been recorded for risks with respect to environment, obligations for demolition of assets, liabilities for the
disposal of soil tare and other risks amounting to EUR 16.4 million (2014: 20.4 million). In addition, a provision of EUR 0.6 million
(2014: EUR 0.3 million) has been recorded for contractual risks, claims and fines.
The discount rate to discounting the future cash flows applied for is 1.5% to 2% depending on the term (2014: 2% for all terms).
(10) NON-CURRENT LIABILITIES
31-12-2015 EFFECTIVEINTEREST RATE
31-12-2014 EFFECTIVEINTEREST RATE
Debts to credit institutions 1.9 4.6 % 4.9 3.7 %
Debts to institutional investors 31.0 5.3 % 31.0 5.1 %
Debts to members 14.6 2.5 % - -
Negative goodwill 6.8 - 9.0 -
Lease obligation 13.8 7.6 % 14.6 7.6%
68.1 59.5
DEBTS TO CREDIT INSTITUTIONSThe non-current debts to credit institutions have a residual term of between one and five years. None of these debts carries variable
interest.
DEBTS TO INSTITUTIONAL INVESTORSAmounts owed to institutional investors consist entirely of a loan placed with a Dutch financial parity member with a lump-sum
repayment in 2018. The loan is denominated in euros and amounts EUR 31.0 million (2014: EUR 31.0 million). Financing is
provided based on certain financial conditions agreed by the parties. All of these conditions are met.
DEBTS TO MEMBERSThe Debts to members relates to the members’ loan programme introduced in 2015. Members of Cosun can loan to Cosun part of
the payments which they receive from Cosun. The loan has a fixed interest rate and a term of between 2 and 5 years. The loans are
subordinated to other creditors.
ANNUAL ACCOUNTS 2015
58
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
NEGATIVE GOODWILLThe negative goodwill, relating to acquisitions is released to the result based on the weighted average remaining life of the
acquired depreciable assets.
LEASE OBLIGATIONThis relates mainly to lease obligations in respect of a distribution centre and a groundwater treatment plant.
(11) CURRENT LIABILITIES31-12-2015 31-12-2014
Debts to credit institutions 12.5 11.8
Debts to institutional investors - 45.3
Liabilities of a financing nature 0.3 0.5
Short-term derivatives - 3.4
Total debts to credit institutions and liabilities of a financing nature 12.8 61.0
Payables to members 120.2 166.7
Payables to suppliers and trade creditors 181.4 166.6
Income tax payable 14.3 48.1
Other taxes and social security contributions payable 8.9 7.8
Other current liabilities and accruals 125.3 148.6
Total other current liabilities, accruals and deferrals 450.1 537.8
DEBTS TO CREDIT INSTITUTIONSA five-year EUR 400 million financing arrangement was concluded with a bank syndicate in July 2014. The arrangement was
extended for one more year in 2015. As at 31 December 2014 and 2015, no use had been made of this arrangement.
DEBTS TO INSTITUTIONAL INVESTORSAn amount of USD 55 million was repaid on the USPP financing in 2015.
SHORT-TERM DERIVATIVESShort-term derivatives in 2014 included a currency swap to hedge exchange rate risk arising from liabilities to institutional investors.
OTHER LIABILITIES ACCRUALS AND DEFERRALSIncome tax payable at year-end 2015 includes approximately EUR 10 million income tax recoverable in 2016 in respect of the
sugar beet delivery (UB) regulations. This deduction is expected to be made on the payment date and the UB payment will be
charged net to other reserves.
The other current liabilities and accruals relate to production levies, interest, holiday entitlements, bonuses and other
expenses still to be paid.
ANNUAL ACCOUNTS 2015
59
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
(12) DERIVATIVE FINANCIAL INSTRUMENTS
GENERALCosun’s treasury policy is aimed at hedging exchange and interest rate risks as much as possible. The exchange rate risk on
financing contracts in foreign currency regarding group companies is hedged by currency swaps. Cosun neither holds nor issues
derivatives for trading purposes. Margin calls are not applicable to foreign currency swaps and forward exchange contracts
concluded.
EXCHANGE RATE RISKThe following table shows the contract volumes and fair market value of the contracts outstanding at 31 December all of which
have been concluded with financial institutions with a short term credit rating of A2 or higher.
CONTRACTVOLUME
31-12-2015
BOOK-VALUE
31-12-2015
FAIR MARKET VALUE
31-12-2015
CONTRACTVOLUME
31-12-2014
BOOK-VALUE
31-12-2014
FAIR MARKETVALUE
31-12-2014
Forward exchange contracts and currency swaps:
US dollar 97.9 -/- 1.2 -/- 2.5 122.8 -/- 1.4 -/- 4.7
Pound sterling 73.6 0.1 0.6 53.8 -/- 0.4 -/- 1.3
Polish zloty 0.6 - 0.1 0.2 - -
Australian dollar 9.3 - -/- 0.1 11.8 - 0.2
Swedish crown 1.9 - - 2.7 - -
Canadian dollar -/- 0.4 - - -/- 0.1 - -
Czech koruna 1.7 - - 1.4 - -
Russian ruble 0.9 0.1 0.1 2.2 - -
TOTAL 185.5 -/- 1.0 -/- 1.8 194.8 -/- 1.8 -/- 5.8
The contract volume is the product of the contracted amount and applicable exchange rate as at the balance sheet date. The book
value is the part of the contract volume for which the hedged position has resulted in a financial active or financial liability, and is
carried as the difference between the exchange rate as at balance sheet date and the hedged exchange rate. The fair value pertains
to the total contract volume.
As in 2014, the forward exchange contracts and currency swaps have mainly a term shorter than one year. The contract volume
with a term longer than one year amounts to EUR 4.0 million (2014: EUR 17.3 million).
PRICE RISKBOOK VALUE
31-12-2015FAIR MARKET VALUE
31-12-2015BOOK VALUE
31-12-2014FAIR MARKET VALUE
31-12-2014
Commodity futures contracts - -/- 3.4 - -/- 1.7
As in the previous year, most commodity futures contracts had a term of less than one year. Some of these contracts had not been
exercised as at 31 December 2015.
CREDIT RISKCredit risks differ by country and individual counterparty and are managed by means of credit limits for each country and
counterparty. The credit risk relating to derivatives and other financial instruments is managed by only concluding contracts with
financial institutions with a credit rating of A or higher for long-term or a S&P rating of A2 or higher for short-term.
ANNUAL ACCOUNTS 2015
60
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
INTEREST RATE RISKTo manage interest rate risks the interest on the permanent financing needs is covered by the derivate financial instruments below:
CONTRACT VOLUME
31-12-2015
BOOK VALUE31-12-2015
FAIR MARKET VALUE
31-12-2015
CONTRACT VOLUME
31-12-2014
BOOK VALUE31-12-2014
FAIR MARKET VALUE
31-12-2014
Currency and interest rate swapsconcerning liabilities toinstitutional investors
- - - 48.7 -/- 3.7 -/- 3.7
Other interest rate derivatives 6.0 -/- 0.1 -/- 0.1 6.0 -/- 0.2 -/- 0.2
For the currency and interest rate swaps concerning liabilities to institutional investors the fair value with maturity shorter than one
year amounts to nil (2014: -/- 3.7 million).
The fair value of other interest rate derivatives maturing within 1 year amounts -/- EUR 0.1 million to nil (2014: nil).
(13) OFF BALANCE SHEET COMMITMENTS
SECURITIES PROVIDEDFinancing agreements include negative pledges with pari passu clauses. A number of group companies have given security to credit
institutions and tax authorities in the form of non-possessory pledges on inventories, machinery and business equipment, silent
pledges on receivables and mortgages on a number of properties.
CLAIMSCosun and/or its group companies are involved in a number of legal cases in connection with the group’s ordinary activities.
Although the outcome of these disputes cannot be predicted with any certainty, it is assumed – partly on the basis of legal advice
– that the total obligations arising from these will not have any significant effect on the consolidated financial position. Provisions
have been formed for all third party claims likely to be awarded for which the size of the potential settlement can be reasonably
estimated.
GARANTEESCosun has given guarantees to third parties to an amount of EUR 30.1 million (2014: EUR 29.6 million).
LONG-TERM FINANCIAL COMMITMENTSLong-term unconditional commitments have been entered into in respect of rent and operating lease. The obligations ensuing from
this amount to EUR 21.6 million (2014: EUR 12.6 million). The rental and lease instalments payable within one year amount to
EUR 6.0 million (2014: EUR 3.8 million). Instalments payable after five years amount to 2.5 million (2014: nil). Contingent
investment liabilities amount to EUR 26.2 million (2014: EUR 12.8 million).
ANNUAL ACCOUNTS 2015
61
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
(14) NET TURNOVERThe break-down of net turnover per product group is as follows:
2015 % 2014 %
Sugar activities 734.0 37.7 904.2 42.8
Potato activities 757.3 38.9 730.6 34.5
Other activities 456.4 23.4 479.7 22.7
TOTAL 1,947.7 100.0 2,114.5 100.0
Net turnover per geographical region can be broken down as follows:
2015 % 2014 %
The Netherlands 613.5 31.5 714.8 33.8
Rest of the EU 1,022.5 52.5 1,119.4 52.9
Rest of Europe 39.0 2.0 38.4 1.8
North and South-America 129.4 6.7 112.7 5.4
Rest of the world 143.3 7.3 129.2 6.1
TOTAL 1,947.7 100.0 2,114.5 100.0
(15) OTHER OPERATING INCOME The book profit on sold assets, insurance payments received, grants, reimbursements received for services to third parties and rental
income are included under these revenues.
(16) EU LEVIES Production levies are imposed by the EU to finance the sugar market regime.
(17) COST OF RAW MATERIALS AND CONSUMABLES This item includes the cost of raw materials and consumables, purchased finished goods and production-related energy costs.
Sugar beet purchases from members amounted to EUR 230.2 million (2014: EUR 282.9 million). This amount includes
EUR 69.3 million payable as members’ bonus (2014: EUR 107.7 million).
(18) COST OF OUTSOURCED WORK AND OTHER EXTERNAL COSTS This expense item includes, among other things, rental costs, research costs, repair and maintenance costs, indirect energy costs,
transport costs, office expenses, selling expenses, insurance costs and IT costs, insofar as such expenses are charged by third
parties.
The total Research & Development costs, including staff costs, amounted to EUR 15.3 million (2014: EUR 14.1 million).
ANNUAL ACCOUNTS 2015
62
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
(19) STAFF COSTS 2015 2014
Wages and salaries 188.8 182.3
Social security contributions 32.2 32.7
Pension costs 34.0 35.9
255.0 250.9
NUMBER OF EMPLOYEESExpressed in full-time equivalents, the average number of employees at Cosun during the 2015 financial year was 3,912
(2014: 3,799). The employees were engaged in the following product groups (average number of employees):
2015 2014
Sugar activities 851 845
Potato activities 2,055 1,943
Other activities 1,006 1,011
TOTAL 3,912 3,799
Of whom employed outside the Netherlands 1,875 1,758
(20) OTHER CHANGES IN THE VALUE OF INTANGIBLE AND TANGIBLE FIXED ASSETSIn 2015 the impairment on tangible fixed assets amounts to nil. The change in value in 2014 amounted to EUR 2.4 million.
(21) FINANCIAL INCOME AND EXPENSE Financial income and expenses include interest on interest bearing receivables and debts.
(22) TAXATION ON RESULTS FROM ORDINARY ACTIVITIES The corporate income tax disclosed in the profit and loss account amounts to EUR 7.8 million (2014: EUR 27.4 million) on a result of
EUR 53.1 million (2014: EUR 106.3 million). The effective tax rate was 14.7% (2014: 25.8%). The difference from the nominal tax rate
can be specified as follows:
2015 % 2014 %
Profit before taxation 53.1 106.3
Income tax based on Dutch tax rates 13.3 25.0 26.6 25.0
Effect of different / foreign tax rates -/- 1.4 -/- 2.6 1.5 1.4
Non-deductible charges / permanent differences -/- 1.0 -/- 1.9 -/- 0.2 -/- 0.1
Effect of change in valuation of tax losses, assets or temporarily differences -/- 1.4 -/- 2.7
0.2 0.2
Adjustment for prior periods -/- 1.4 -/- 2.6 -/- 0.8 -/- 0.8
Other -/- 0.3 -/- 0.5 0.1 0.1
TOTAL TAX BURDEN 7.8 14.7 27.4 25.8
ANNUAL ACCOUNTS 2015
63
COSUN ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
The impact of changes in the valuation of tax losses is attributable to the realisation of a tax gain on the liquidation loss of
L. P. Boots Deutschland GmbH.
The adjustment to prior years relates partly to the outcome of the discussion between the Dutch and the U.S. tax authorities on
transfer pricing methodology to be used for one of the activities. Prior year corrections also relate to adjustments for the final
returns for prior years.
(23) FEES OF THE AUDITOR The following fees have been charged by Ernst & Young Accountants LLP to the company, its subsidiaries and other consolidated
companies, as referred to in Section 2:382a (1 and 2) of the Netherlands Civil Code.
In the year 2015 the following fees were charged to the company:
ERNST & YOUNG ACCOUNTANTS LLP
OTHER ERNST & YOUNG NETWORK
TOTALERNST & YOUNG
Audit of the financial statements 0.3 0.2 0.5
Tax advisory services - 0.3 0.3
TOTAL 0.3 0.5 0.8
In the year 2014 the following fees were charged to the company:
ERNST & YOUNG ACCOUNTANTS LLP
OTHER ERNST & YOUNG NETWORK
TOTALERNST & YOUNG
Audit of the financial statements 0.2 0.3 0.5
Tax advisory services - 0.3 0.3
TOTAL 0.2 0.6 0.8
(24) CASH FLOW STATEMENT Movements in the cash flow statement can be derived largely from the movements in the relevant balance sheet items. The balance
sheet movement and the cash flow statement movement of certain items are reconciled below:
WORKING CAPITAL PROVISIONS NON-CURRENTLIABILITIES
Balance as at 1 January 2015 348.4 -/- 84.1 -/- 59.5
Balance as at 31 December 2015 474.6 -/- 77.0 -/- 68.1
Balance sheet movements -/- 126.2 -/- 7.1 8.6
Adjustments for:
- Changes in consolidation -/- 0.9 -/- 0.8 -/- 2.8
- Changes in income tax 28.5 8.1 -
- Release negative goodwill - - 3.6
- Reclassification 7.2 - -
CASH FLOW -/- 91.4 0.2 9.4
ANNUAL ACCOUNTS 2015
64
COSUN ANNUAL REPORT 2015
COOPERATIVE BALANCE SHEET
Notes 31-12-2015 31-12-2014
ASSETS
Fixed assets
Intangible fixed assets (25) 77.2 85.0
Tangible fixed assets (26) 258.3 253.0
Financial fixed assets (27) 609.0 548.6
944.5 886.6
Current assets
Inventories (28) 335.0 323.0
Trade and other receivables (29) 199.5 286.8
Cash and cash equivalents 74.4 329.2
608.9 939.0
Total assets 1,553.4 1,825.6
EQUITY AND LIABILITIES
Shareholders’ equity (30)
Share capital 7.0 7.1
Share premium 53.4 53.5
Reserve for participating interests 5.6 5.3
Reserve for exchange differences 5.0 0.7
Other reserves 1,070.8 1,165.1
1,141.8 1,231.7
Provisions (31) 41.0 48.8
Non-current liabilities (32) 55.3 40.9
Current liabilities (33)
Current liabilities to credit institutions and liabilities of a financing nature 0.1 49.4
Other current liabilities, accruals and deferrals 315.2 454.8
315.3 504.2
Total equity and liabilities 1,553.4 1,825.6
COOPERATIVE BALANCE SHEET (after profit appropriation; in EUR million)
ANNUAL ACCOUNTS 2015
65
COSUN ANNUAL REPORT 2015
COOPERATIVE PROFIT AND LOSS ACCOUNT
For the financial year 2015 2014
Cooperative result after taxation 11.0 39.9
Profit of participating interests after taxation 34.5 39.2
NET RESULT 45.5 79.1
APPROPRIATION OF PROFIT IN ACCORDANCE WITH ARTICLE 1OF THE SUGAR BEET DELIVERY PAYMENT REGULATIONS
Result of participating interests less dividends received 14.8 10.9
Cooperative result including dividends from participating interests 30.7 68.2
(in EUR million)
COOPERATIVE PROFIT AND LOSS ACCOUNT
ANNUAL ACCOUNTS 2015
66
COSUN ANNUAL REPORT 2015
NOTES TO THE COOPERATIVE ANNUAL ACCOUNTS
NOTES TO THE COOPERATIVEANNUAL ACCOUNTS (in EUR million)
GENERALInsofar as notes on items in the cooperative balance sheet and profit and loss account are not provided below, reference is made to
the notes to the consolidated balance sheet and profit and loss account.
ACCOUNTING POLICIES The cooperative balance sheet and profit and loss account are prepared using the same accounting policies as applied for the
consolidated balance sheet and profit and loss account.
(25) INTANGIBLE FIXED ASSETS Movements in intangible fixed assets were as follows:
GOODWILL OTHERINTANGIBLE
FIXED ASSETS
TOTAL
At cost as at 1 January 2015 174.6 6.0 180.6
Accumulated amortisation and other changes in value as at 1 January 2015 93.0 2.6 95.6
BOOK VALUE AS AT 1 JANUARY 2015 81.6 3.4 85.0
Movements:
- Amortisation -/- 7.6 -/- 0.2 -/- 7.8
BOOK VALUE AS AT 31 DECEMBER 2015 74.0 3.2 77.2
At cost as at 31 December 2015 174.6 6.0 180.6
Accumulated amortisation and other changes in valueas at 31 December 2015 100.6 2.8 103.4
ANNUAL ACCOUNTS 2015
67
COSUN ANNUAL REPORT 2015
NOTES TO THE COOPERATIVE ANNUAL ACCOUNTS
(26) TANGIBLE FIXED ASSETSMovements in tangible fixed were as follows:
LANDAND
BUILDINGS
MACHINERYAND
EQUIPMENT
OTHERTANGIBLE
FIXED ASSETS
PREPAYMENTS AND IN
PRODUCTION
NOT USEDFOR
OPERATIONS
TOTAL
At cost as at 1 January 2015 138.8 392.9 7.6 7.6 5.2 552.1
Accumulated depreciation and other changes in value as at 1 January 2015 63.7 229.5 5.9 - - 299.1
BOOK VALUE AS AT 1 JANUARY 2015 75.1 163.4 1.7 7.6 5.2 253.0
Movements:
- Investments 4.2 41.1 0.8 2.6 - 48.7
- Divestments -/- 0.2 -/- 0.2 - - - -/- 0.4
- Disposals -/- 4.0 -/- 35.9 -/- 1.3 - - -/- 41.2
- Other changes in value -/- 3.6 1.9 - - -/- 0.1 -/- 1.8
- Transfer -/- 0.4 -/- 0.9 0.9 0.4 - -
BOOK VALUE AS AT 31 DECEMBER 2015 71.1 169.4 2.1 10.6 5.1 258.3
At cost as at 31 December 2015 142.4 431.6 9.3 10.6 5.1 599.0
Accumulated depreciation and other changes in value as at 31 December 2015 71.3 262.2 7.2 - - 340.7
(27) FINANCIAL FIXED ASSETS 31-12-2015 31-12-2014
Participating interests in group companies 267.8 245.1
Receivables from group companies 329.7 290.6
Receivables from members 10.2 4.8
Deferred tax assets 0.1 0.1
Other receivables 1.2 8.0
609.0 548.6
ANNUAL ACCOUNTS 2015
68
COSUN ANNUAL REPORT 2015
NOTES TO THE COOPERATIVE ANNUAL ACCOUNTS
Movements in financial fixed assets were as follows:
PARTICIPATINGINTERESTS IN
GROUP COMPANIES
RECEIVABLES FROM GROUP
COMPANIES
RECEIVABLES FROM
MEMBERS
DEFERREDTAX
ASSETS
OTHERRECEIVABLES
TOTAL
Balance as at 1 January 2015 245.1 290.6 4.8 0.1 8.0 548.6
Movements:
- Share in result of participating interests 34.5 - - - - 34.5
- Additions and issuances 3.7 84.3 7.0 - - 95.0
- Repayments and releases - -/- 45.3 -/- 0.2 - - -/- 45.5
- Dividend -/- 19.7 - - - - -/- 19.7
- Exchange results 4.2 0.1 - - - 4.3
- Movements in favour of/charged to the profit and loss account - - -/- 0.5 - -/- 0.5 -/- 1.0
- Reclassification to current - - -/- 0.9 - -/- 6.3 -/- 7.2
BALANCE AS AT 31 DECEMBER 2015 267.8 329.7 10.2 0.1 1.2 609.0
PARTICIPATING INTERESTS IN GROUP COMPANIESSuiker Unie GmbH & Co. KG is a subsidiary and is included in the consolidated financial statements of Royal Cosun as of
31 December 2015. Suiker Unie GmbH & Co. KG uses the exemption to prepare, audit and disclose the financial statement in
accordance with section 264b German Commercial Law.
RECEIVABLES FROM GROUP COMPANIESReceivables from group companies are mainly long-term loans granted to Cosun Holding B.V. (EUR 175 million), Anklam Bioethanol
GmbH (EUR 15 million), Aviko B.V. (EUR 40 million), Sensus B.V. (EUR 15 million), SVZ International B.V. (EUR 15 million) and Duynie
Holding B.V. (EUR 15 million).
RECEIVABLES FROM MEMBERSThe non-interest bearing receivables from members (EUR 10.2 million) relates to the market value of the long-term portion of
amounts still to be deposited for issued shares (2014: EUR 4.8 million).
OTHER RECEIVABLESThe other receivables relate to capitalised costs for the conclusion of a new financing agreement expiring in June 2020.
(28) INVENTORIES31-12-2015 31-12-2014
Land 10.4 8.8
Raw materials and consumables 7.3 7.9
Finished products and goods for resale 317.3 306.3
335.0 323.0
The land included in inventory relates to grounds being developed for business park AFC Nieuw Prinsenland near Dinteloord.
The valuation of inventories takes account of obsolete stock. The provision for obsolete stock amounts to EUR 1.5 million
(31 December 2014: EUR 2.1 million).
ANNUAL ACCOUNTS 2015
69
COSUN ANNUAL REPORT 2015
NOTES TO THE COOPERATIVE ANNUAL ACCOUNTS
(29) TRADE AND OTHER RECEIVABLES 31-12-2015 31-12-2014
Trade accounts receivable 63.6 58.2
Receivables from group companies 115.5 205.0
Short-term portion of amount still to be paid up for issued shares 0.9 2.6
Recoverable Income tax - 0.1
Other tax receivables 6.0 11.2
Other receivables and accrued income 13.5 9.7
199.5 286.8
(30) CAPITAL AND RESERVES
ISSUED SHARE CAPITAL AND SHARE PREMIUM
CAPITAL ANDRESERVES
SHAREPREMIUM
TOTAL2015
TOTAL2014
Balance as at 1 January 7.1 53.5 60.6 60.7
Movements:
- Shares issued 1.7 5.3 7.0 1.1
- Shares redeemed and withdrawn -/- 1.8 -/- 5.4 -/- 7.2 -/- 1.2
BALANCE AS AT 31 DECEMBER 7.0 53.4 60.4 60.6
The total number of issued shares is 154,856 (2014: 155,578), with the nominal value amounting to EUR 45.40 per share.
In 2015, 38,674 shares were issued and 39,396 shares were redeemed and withdrawn. Based on RJ 620, EUR 1.2 million
(2014: EUR 1.2 million) has been presented as liability in the consolidated annual accounts.
STATUTORY RESERVES, OTHER RESERVES AND RESULTS
RESERVE FOR PARTICIPATING
INTERESTS
RESERVE FOR EXCHANGE
DIFFERENCES
OTHERRESERVES
TOTAL2015
TOTAL2014
Balance as at 1 January 5.3 0.7 1,165.1 1,171.1 1,099.0
Movements:
- Profit appropriation - - 45.5 45.5 79.1
- Paid to members - - -/- 139.5 -/- 139.5 -/- 9.8
- Exchange differences - 4.3 - 4.3 2.8
- Transfer 0.3 - -/- 0.3 - -
BALANCE AS AT 31 DECEMBER 5.6 5.0 1,070.8 1,081.4 1,171.1
The net result 2015 of EUR 45.5 million has been added to the other reserves.
RESERVE FOR PARTICIPATING INTERESTSThe reserve for participating interests is that part of movements in equity that are not freely disposable as from the moment of
consolidation.
ANNUAL ACCOUNTS 2015
70
COSUN ANNUAL REPORT 2015
NOTES TO THE COOPERATIVE ANNUAL ACCOUNTS
OTHER RESERVESOn the basis of section 46 of the articles of association, payments take place to members and contracted parties. Effective from
January 2000, these payments are in accordance with the Sugar Beet Delivery Payment Regulations; previously the Cessation
of Business Regulations had been applicable. The payment amount depends on the average number of tonnes of sugar beets
delivered, the average cooperative result including the dividend from participating interests per tonne of sugar beet for the three
previous financial years, and a factor per campaign. Payments are deducted from the other reserves.
Until 2017 the payments will also be made based on the Cessation of Business Regulations, for which the amount depends on
the number of shares possessed by the members, the number of financial years that the shares have been in the possession of
the members, and the average cooperative result including dividend from participating interests per share for the three previous
financial years. The payment takes place from the moment business operations ceased, or after a delivery period 30 consecutive
campaigns at the moment the member uses the Cessation of Business Regulations or 2017 at the latest.
Some of the members were entitled to a payment on the termination of their businesses in 2015, having supplied beet for
15 successive campaigns. The gross payment in 2015 based on the cooperative’s results including the dividend received from
participating interests for the period 2012-2014 amounted to EUR 179.0 million (net amount: EUR 139.5 million, charged to other
reserves). This amount is included in the right to business termination payments under the transitional rules.
The former CSM Suiker growers will be eligible to a payment under the Beet Delivery Regulations after delivering beet for a
period of ten years in 2016. If all eligible members exercise this right, the gross payment in 2016 based on the cooperative’s
results including dividends from participating interests for the period 2013-2015 will amount to approximately EUR 50 million
(approximately EUR 38 million net charged to other reserves).
If all members eligible to payment under the Cessation of Business Regulation and the Beet Delivery Regulation, the total payment
as at 31 December 2015 would amount to EUR 89.8 million (2014: EUR 298.0 million).
DIFFERENCE BETWEEN CONSOLIDATED AND COOPERATIVE EQUITYPursuant to Guideline 620 of the Dutch Accounting Standards Board, the part (2%) of the paid-up capital that is payable on
demand by the members is recognised as a liability in the consolidated annual accounts. As a result the consolidated equity differs
from the equity in the cooperative annual accounts.
31-12-2015 31-12-2014
Consolidated capital and reserves 1,140.6 1,230.5
Impact RJ 620 1.2 1.2
COOPERATIVE CAPITAL AND RESERVES 1,141.8 1,231.7
ANNUAL ACCOUNTS 2015
71
COSUN ANNUAL REPORT 2015
NOTES TO THE COOPERATIVE ANNUAL ACCOUNTS
(31) PROVISIONS 31-12-2015 31-12-2014
Deferred tax liabilities 19.6 26.6
Restructuring and reorganisation 0.1 0.4
Pensions and other deferred employee benefits 14.6 14.8
Other provisions 6.7 7.0
41.0 48.8
EUR 30.3 million (2014: EUR 37.7 million) of the provisions is long term in nature.
Movements in provisions were as follows:
DEFERREDTAX
LIABILITIES
RESTRUCTURINGAND
REORGANISATION
PENSIONSAND OTHER
DEFERREDEMPLOYEE
BENEFITS
OTHERPROVISIONS
TOTAL
Balance as at 1 January 2015 26.6 0.4 14.8 7.0 48.8
Movements:
- Additions - - 6.3 4.9 11.2
- Release to profit and loss account - - - -/- 0.7 -/- 0.7
- Withdrawals -/- 7.0 -/- 0.3 -/- 6.5 -/- 4.5 -/- 18.3
BALANCE AS AT 31 DECEMBER 2015 19.6 0.1 14.6 6.7 41.0
(32) NON-CURRENT LIABILITIES
31-12-2015 EFFECTIVEINTEREST RATE
31-12-2014 EFFECTIVEINTEREST RATE
Debts to institutional investors 31.0 5.3 % 31.0 5.1 %
Lease obligation 9.7 8.4 % 9.9 8.4 %
Debts to members 14.6 2.5 % - -
TOTAL NON-CURRENT LIABILITIES 55.3 40.9
The item Debts to members relates to the members’ loan programme introduced by Cosun in 2015. The amount loaned bears
interest, has a fixed term between 2 and 5 years and is subordinated to other creditors.
ANNUAL ACCOUNTS 2015
72
COSUN ANNUAL REPORT 2015
NOTES TO THE COOPERATIVE ANNUAL ACCOUNTS
(33) CURRENT LIABILITIES
31-12-2015 31-12-2014
Liabilities of a financing nature 0.1 49.4
Payables to group companies 84.3 129.1
Payables to members 120.2 166.7
Payables to suppliers and trade creditors 41.4 36.5
Income tax payable 10.8 46.8
Other taxes and social security contributions payable 2.0 2.0
Other current liabilities and accruals 56.5 73.7
TOTAL OTHER CURRENT LIABILITIES AND ACCRUALS 315.2 454.8
SHORT-TERM DERIVATIVESLiabilities of a financing nature in 2014 included currency and interest rate swaps to hedge interest and exchange rate risk arising
from liabilities to institutional investors to an amount of EUR 3.4 million.
(34) OFF BALANCE SHEET COMMITMENTS
Several liability and guarantees
Cosun has given guarantees to third parties to an amount of EUR 31.5 million (2014: EUR 31.0 million).
Long-term financial commitments
Long-term unconditional commitments have been entered into in respect of rent and operating lease. The obligations ensuing from
this amount to EUR 4.3 million (2014: EUR 4.6 million). The rental and lease instalments payable within one year amount to
EUR 1.3 million (2014: EUR 1.2 million). Instalments payable after five years amount to nil (2014: nil). Contingent investment
liabilities amount to EUR 22.8 million (2014: EUR 11.4 million).
(35) OTHER INFORMATION The remuneration, including pension costs as referred to in Section 2:383(1) of the Netherlands Civil Code, of members of the
Board amounted to EUR 0.6 million (2014: EUR 0.8 million) and that members of the Supervisory Board to EUR 0.1 million
(2014: EUR 0.1 million). The remuneration was charged to the result.
Board Supervisory Board
D.H. de Lugt J. Bartelds
G.M. van Tilburg J.L. van Driel
A.J.B.P. Bossers W.A. Blijdorp
B.R. van Doesburgh E.H.W.J.E. Michiels
J.M. Klompe Ms J.P. Rijsdijk
Ms. G. Prins B.T. Visser
J.A. Smid
J.H.D. Voncken
S. Wijkstra
Breda, 17 March 2016
OTHER INFORMATION
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COSUN ANNUAL REPORT 2015
PROVISIONS IN THE ARTICLES
PROVISIONS IN THE ARTICLES OF ASSOCIATION GOVERNING THE APPROPRIATION OF PROFIT The appropriation of the profit for the year is laid down in the Articles of Association (Article 42, paragraphs 1 and 2) as follows:
the Board shall determine what proportion of the cooperative’s profit for the year shall be added to reserves. Unless the Members’
Council resolves otherwise on the Boards’ recommendation, the amount remaining after the above addition shall be distributed
among those members who were A members or B members at the end of the financial year in question, or who had ceased to
be A members or B members during or at the end of that financial year; with regard to B members, the distribution shall be made
with due regard for the Membership Agreement and at the direction of the relevant C members in accordance with the quantity of
produce supplied to the cooperative in that financial year and in accordance with the method of payment stipulated in the Sugar
Beet Regulation.
PROPOSED PROFIT APPROPRIATIONThe net result for the 2014 financial year (EUR 79.1 million) is added to the other reserves, in accordance with the decision of the
Board on 11 March 2015.
The Board intends to decide that EUR 45.5 million be added to the other reserves.
The above has already been included in the cooperative’s 2015 annual accounts.
OTHER INFORMATION
OTHER INFORMATION
74
COSUN ANNUAL REPORT 2015
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORTTo: the Supervisory Board of Coöperatie Koninklijke Cosun U.A.
Report on the financial statements
We have audited the accompanying financial statements 2015 of Coöperatie Koninklijke Cosun U.A., Breda, which comprise the
company and consolidated balance sheet as at 31 December 2015, the company and consolidated profit and loss account for the
year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.
MANAGEMENT’S RESPONSIBILITYManagement is responsible for the preparation and fair presentation of these financial statements and for the preparation of
the management board report, both in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is
responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free
from material misstatement, whether due to fraud or error.
AUDITOR’S RESPONSIBILITYOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of
the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OPINION WITH RESPECT TO THE FINANCIAL STATEMENTSIn our opinion, the financial statements give a true and fair view of the financial position of Coöperatie Koninklijke Cosun U.A. as
at December 31, 2015 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements
Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to
report as a result of our examination whether the management board report, to the extent we can assess, has been prepared in
accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has
been annexed. Further we report that the management board report, to the extent we can assess, is consistent with the financial
statements as required by Section 2:391 sub 4 of the Dutch Civil Code.
Naaldwijk, 17 March 2016
Ernst & Young Accountants LLP
Signed by M.A.M. Kester
© Royal Cosun 2016