The year 2023 was difficult and unpredictable for many growers. Volume was 3.2% lower than in 2022. The average price, at 2.2%, was slightly higher than in 2022, but well below the inflation faced by the whole sector. Margins were under pressure throughout the floriculture chain. Royal FloraHolland's operating profit, after tax, was a loss of 17 million euros. At the same time, this was the year with many successfully implemented milestones and historic cooperative changes. This made 2023 a year with two faces.

In 2024, the main priority is to return to black figures as the large-scale strategic changes enter the final phase. The expectation for 2024 is a break-even result, thanks to a tight budget, an already implemented rate increase and cost savings - both short- and long-term. This is according to Royal FloraHolland's annual report published 2 April 2024. 

Milestones

Steven van Schilfgaarde: "As a cooperative, we are proud of achieving a number of crucial strategy milestones in 2023. We have made great strides in harmonising our logistics hubs. With this, we are now in the very last phase of completing the 2008 merger. We are phasing out the old IT. There is now an innovative and much more robust IT infrastructure with digitally driven logistics, the prelude to the Royal FloraHolland platform, digital and logistics. Our digital platform Floriday is growing with supply and demand and in functionality. Last year, more than two billion euros of direct sales already ran through Floriday on an annual basis. With our logistics platform, we are focusing on high delivery reliability from logistics optimisation, which allows us to deliver efficiently from grower to buyer. And we have launched time period delivery, which has been made possible thanks to order picking, allowing customer choice in terms of delivery time." Another milestone was the start in November of central auctioning Roos. "We have been talking about central auctioning since the merger in 2008. Back then we still called it national auctioning. Rose is the largest product group. By the end of 2023, almost 30 per cent of clock sales were auctioned centrally." By bringing together more supply and demand, we encourage optimal pricing. With this, we are working step by step towards location-independent auctioning, in which our three logistics hubs play a crucial role. For the cooperative, the Member Council's decision to exchange standard membership for four types of Member Packages was a special milestone. These were introduced with effect from 1 January 2024. On the important topic of sustainability, the decision was taken at the end of March 2024 that from 2027 all growers trading through Royal FloraHolland must have a sustainability certificate. 

Strong financial basis

Royal FloraHolland has a strong financial base. CFO David van Mechelen: "It was anticipated that we would make a loss in 2023, but it is higher than we originally thought. 2023 again saw high inflation, rising energy and raw material prices, with higher labour and transport costs also being felt. The combination of economies of scale (growth) and productivity improvements is needed to offset inflationary effects. However, growth failed to materialise. Due to challenging market conditions in 2022 for our members and in the market, we previously opted for relatively limited rate increases for 2023, which consequently did not break even. In 2023, our total operating income increased by only €7m partly as a result. Our wage costs rose by 16 million euros in 2023 - partly due to the new collective labour agreement - compared to 2022. Due to energy already purchased, energy costs were 6 million higher. As a result, the operating result before interest and depreciation (EBITDA) was 51 million euros, down 21 million compared to 2022." Royal FloraHolland is almost exclusively indebted to its own members in the form of certificates. Van Mechelen: "The structure and conditions of member financing give a lot of comfort and stability. I also notice a lot of confidence from banks in Royal FloraHolland's strategy and position. We have now come to terms with new bank financing for the coming years."