Annual report: Royal FloraHolland's turnover increased to € 4.8 billion in 2019
April 24, 2020
In the marketplace of Royal FloraHolland, 12.3 billion flowers and plants were traded in 2019, an increase of 1.5%. Product turnover was € 4.8 billion, an increase of 3.1% compared to 2018. There were both higher volumes and higher prices. The flowers and plants were supplied by 5,406 suppliers and purchased by 2,458 buyers. Operating profit amounted to € 5.6 million thanks to lower operating expenses. This is reflected in the annual report 2019 published on 23 April 2020.
Unprecedented impact corona crisis
CEO Steven van Schilfgaarde: "Over the past five weeks the sector has been hit very hard. I am confident that thanks to the government's emergency pack and the € 600 million emergency fund, the sector will be able to get through this difficult period. When the crisis broke out, we were in good shape. I am confident that our sector is resilient. As soon as international demand recovers, we should be able to react immediately. We currently see some bright spots, but there is still a long way to go. We are accelerating the implementation of our strategy. We are fully committed to digitization, with all transactions in the market taking place digitally by the end of the year, and will continue even faster to prepare for the roll-out of "Landelijk Veilen" (national auction) in 2021. These projects are preconditions for bringing our costs structurally down to a lower level.
In response to sharply declining international demand, Royal FloraHolland has introduced a temporary supply regulation for the clock and made agreements with banks on the provision of emergency loans to members. In addition, immediate action was taken to safeguard our own business operations, in the interests of growers and buyers.
Financial starting position
Royal FloraHolland's solid starting position ensures that, despite an expected large loss for 2020, no acute financial problems will arise. Part use is being made of the existing financing capacity. CFO David van Mechelen: "We are well financed and maintain close contact with our banks. We also appeal to government support measures. Continuity of the cooperative and preservation of employment are of paramount importance to us. It goes without saying that the money we borrow under our credit facility must be recouped in the future. We will have to reduce our costs and adapt our business activities to the changes and new levels. Last year we reduced our costs. This year we will continue to do so, with even greater urgency. Investments in strategic programmes will increase our efficiency and accelerate the development of new business models and strengthen our market position".
The annual report shows that the financial ratios are at the same level, with 28.8% for solvency and 60.3% for venture capital. Operating profit (EBITDA) was 90 million euros in 2019. The share of the clock fell slightly to 40.7% of turnover in 2019. This decrease confirms the strategic change of course that Royal FloraHolland initiated a number of years ago.