Royal FloraHolland turnover in 2020 only reduced by 2.9%
April 23, 2021
In 2020, a total of 11.4 billion flowers and plants were traded via the Royal FloraHolland marketplace. This is a decrease of 7.8% compared to 2019. The prices, however, were 5.3% higher. Product sales, in turn, reduced by 2.9% to an amount of EUR 4.7 billion.
These lower product sales are primarily due to a drop in demand between mid-March and mid-May. This lower supply did lead to reduced income from service provision for Royal FloraHolland. As a result of significant additional savings, this ultimately resulted in a loss of EUR 5.8 million. This is much lower than was feared last year. This is apparent from the 2020 annual report that was published on Friday, 23 April 2021.
In 2020, the floriculture industry was hit by unparalleled events as a result of the coronavirus. CEO Steven van Schilfgaarde: 'Never before, in the long history of our cooperative, have we seen so many flowers and plants left unsold in such a sudden manner. As a result of combining forces, we were the first and almost only sector to realise an Emergency Fund. This safety net allowed growers and buyers to continue to look to the future. Our industry showed its very best side last year. I'm extremely proud of the strong resilience shown by the industry and our cooperative.'
Throughout 2020, Royal FloraHolland continued to invest in strategic projects such as the digital trading platform Floriday and Nationwide Auctioning. Van Schilfgaarde says: 'The essence of the strategy is that we aim to transform a physical floriculture marketplace into a digital, B2B floriculture platform in the coming years. Floriday will ensure that we can preserve the most powerful marketplace in the world, together. With the ongoing implementation of the strategy, we will endeavour to involve more growers and buyers than previously. We will focus on customised solutions and move away from the 'one size fits all' approach. In our cooperative, we will look for solutions together. I have a great deal of confidence in the future: not only in the future of Royal FloraHolland, but also in that of the Dutch floriculture industry as a whole.'
Financial starting point
The dramatic reduction in international demand in March and April 2020 generated a great deal of uncertainty among cooperative members. CFO David van Mechelen: 'In 2020, everyone in the sector was confronted with challenging market conditions. The impact of corona over the first few months negatively impacted everyone and created a high degree of uncertainty. This was followed by a few good months for many people, starting with Mother's day. The market quickly recovered thereafter. As a result, product sales on the marketplace reduced by just 2.9% compared to 2019. This encouraging turnover was realised thanks to reasonable pricing and despite reduced supply. This reduced supply led to somewhat lower income from service provision. We also incurred additional costs in order to set up operations and other services differently to continue functioning within coronavirus limitations; we were also faced with higher absenteeism. These combined factors resulted in a loss of EUR 5.8 million. This loss has been somewhat limited by additional cost savings, some of which are temporary. Corona will also impact on Royal FloraHolland in 2021. Our cautious expectation for this year is that we can break-even.'