Background
Report of the Executive Board

The most significant
developments highlighted

Financial developments

HZPC was able to increase the volume of seed potatoes sold and grown under licence this year as well. The turnover and gross margin increased further. Our seed potato growers with variable price contracts received a relatively high price. In combination with the kilogramme yields this means that these growers have achieved one of the best financial yields of the last decade.

 

Essential data

 

2011/12 2012/13 2013/14 2014/15 2015/16
x 1 million euro          
           
Results          
Consolidated net turnover 229.2 280.0 282.7 241.6 289.5
Gross margin 39.1 45.8 47.5 41.3 48.1
Net income for financial year 4.4 1.0 9.2 4.5 7.0
Depreciation tangible fixed assets 2.2 2.4 2.6 2.7 2.9
Investments in tangible fixed assets 2.9 2.1 2.8 3.4 3.0
           
Balance sheet          
Shareholders’ equity 38.6 38.8 42.3 44.0 46.3
Cash flow from operating activities 0.5 12.3 18.6 5.8 5.8
Cash and cash equivalents 12.4 17.8 32.9 27.6 19.7
Growers’ deposits 16.6 20.8 23.8 20.9 20.7
Total assets 82.9 91.1 96.4 94.1 106.5
           
Group equity as % of total assets 46.6% 42.6% 43.9% 46.8% 43.5%

HZPC has a solid capital position with a solvency of 43.5%. With a net turnover of 289.5 million euros and a result of 7.0 million euros after tax, we can definitely be satisfied with the result for 2015/2016. The return on shareholders’ equity is 15.9%. The liquidity of the company is also strong, with the quick ratio amounting to 1.3.

The certificate holders have allowed the stock exchange value of HZPC to climb further by over 20% to over 100 million euros in the last year. We are proud of this valuation, which reflects confidence in the current strategy and the implementation of it.

Organisational developments

Investment in the future is every bit as important as the business of today. This is why HZPC has chosen a new organisational structure which is based on growth and conduct of business with a focus on the future.

The most significant change is the formation of three business units under HZPC Holding. The first, Strategic Business Area Europe, entails the familiar business activities within Europe and export from Europe to other countries. The aim of this business unit is to increase the market share in various countries in the next few years.

The second business unit, Strategic Business Development Area, has been added to scale up promising projects, like business developments in areas outside Europe or the marketing of innovative products and concepts. The new business unit is a nursery for selected products which require lots of management attention if they are to fulfil their potential. These projects will be transferred to regular business operations once they have been developed and are running well.

The third business unit is Stet Holland B.V., which contains the companies which work within Europe and from Europe to other countries under the label Stet. The aim of this business unit is to increase the market share in various countries in the next few years.

What has changed

  • HZPC Holding has been created as an umbrella organisation.
  • The Strategic Business Area Europe (SBAE) is a new business unit which is made up of all HZPC’s European locations.*
  • The Strategic Business Development Area (SBDA) is a new business unit which develops and scales up selected promising projects. The SBDA also includes HZPC’s non-European locations.
  • Stet Holland B.V. is a new business unit made up of all the Stet locations.
  • HZPC Research & Development is accommodated in a separate private company.
  • Intellectual Property Rights (IPR) B.V. has been set up.

•  This also applies for HZPC Holland. The Dutch branch is thereby officially a sister company within the Strategic Business Area Europe and there can be no more confusion about the parent company (HZPC Holding). The new organisational structure has been operational since 1 July 2016. We have been working towards this new structure since 1 January 2016.

 

Company expansion

Our company has not only grown intrinsically to enable us to achieve our growth objectives; we have also acquired business activities.

In April 2014 HZPC started a joint venture with the Mahindra group to build up our market share in the fast emerging professional seed potato market in India. Cooperation with a local partner is an important step on the road to success in the Indian market. We are therefore pleased that we have found a strong partner in Mahindra and we worked together on a strategic plan for market development in the recent period. 

The first visible result of this co-operation is the construction of a new production facility in Mohali (close to Chandigarh) which will be completed before the end of 2016.

As the Russian government is aiming to become self-sufficient, we expect that the import of seed potatoes will decline further. In anticipation of this we acquired all the shares in the joint venture in Russia which we already had a minority interest in on 1 January 2016. The majority of the seed potatoes sold by HZPC in Russia will be produced on an increasingly local basis.

On 11 April 2016 Stet Holland B.V. confirmed the purchase of KWS Potato’s seed potato activities. Stet Holland doubled in size following this purchase. As a fresh produce specialist, the purchase also means access to new segments of the market for Stet Holland and a welcome addition to the portfolio with a few strong crisp and fries varieties.