Sales at Royal FloraHolland's marketplace reached 5.2 billion euros in 2022, down 8% from 2021. For the second consecutive year, the 5 billion mark was broken. This is despite the fact that last year was difficult and unpredictable for many growers. The number of products traded decreased by 7% to a total of 10.8 billion. The decrease in supply was mainly caused by high energy costs for growers. The average price was 2% lower than in 2021. This was offset by high inflation rates. Royal FloraHolland's operating profit, after tax, was a loss of 4 million euros. The main causes were a 5.7 million euro write-off on the bankrupt Floriworld and 11.4 million euro higher energy costs. Substantial cost savings limited the loss while at the same time continuing full speed ahead with implementing the strategy and investing in the future. Investments amounted to 90 million euros.
Concerns about progress on energy transition
Floriculture has the ambition to become CO2 neutral in the long run. This requires substantial investments in wind and solar energy, geothermal energy, and the use of residual heat from industry. Steven van Schilfgaarde: "The cabinet's plans to adjust energy taxes for greenhouse horticulture have major financial consequences for our sector. Wageningen University calculated that, based on these measures, greenhouse horticulture will face a huge increase in costs from 2025. For ornamental horticulture, this amounts to hundreds of millions more every year. The government's policy thus stands in the way of the necessary investments in the energy transition. Especially at this stage. This puts unnecessary further pressure on the international position of the Dutch floriculture sector. The same applies to the Netherlands' role as the hub of the global floriculture sector. With all parties, we are jointly taking action to ensure that the cabinet does not implement this proposed burden increase."
Unpredictable year
Both demand and supply were unpredictable in 2022. Canceled orders by international retail companies unexpectedly increased the supply on the clock, while the labor market, especially for logistics staff, was very tight. This caused bottlenecks in the logistics operation at Royal FloraHolland, resulting in logistics services being less than intended. Against the trend, the clock share increased slightly to 40 percent. The growth of the digital platform Floriday continued. In 2022, an average of 33% of direct transactions went through Floriday, with a visible upward trend during the year accelerating further in 2023. By week 10 of 2023, the percentage was already 56%. Every week, 5,500 growers and buyers from 45 countries use Floriday. Royal FloraHolland has over 600 international members. They account for 18.2% of sales on the marketplace and, on the clock, as much as 29.1%.
Financially solid
Royal FloraHolland has a solid financial balance sheet. That makes it possible to invest in the future. CFO David van Mechelen: "In April last year, based on the insights at the time, I did not rule out that we would make a big loss in 2022. Despite sharply increased energy costs and the write-off on Floriworld, we managed to limit the loss to 4 million euros. We managed to make substantial cost savings last year. The house is in good shape thanks to our Basics Right program. We also took a number of additional measures, such as a hiring freeze on non-logistics positions. But at the same time, we consciously took care not to hamper the speed of strategy implementation. Last year, we invested 90 million euros in our future, in Floriday, new logistics, IT renewal, property maintenance, and the development of Aalsmeer-Oost, among others. That is 22 million more than in the previous year".
New in this annual report
In this annual report, we take an important first step towards reporting according to the requirements of the Corporate Sustainable Reporting Directive (CSRD). We thereby anticipate the obligation to do so per Annual Report 2025. Sustainability in all its facets is embraced by Royal FloraHolland. In addition, for the first time, Floriway has been fully included for the entire financial year (in 2021, Floriway was only consolidated for a period of two months). Floriway is an amalgamation of three transport companies, with Royal FloraHolland as a major shareholder. As a result, for example, Royal FloraHolland's operating turnover and number of employees are a lot higher than in 2021.
For more information:
Royal FloraHolland
www.royalfloraholland.com