Royal FloraHolland show 8% drop in 2022 sales

Whilst they may have broken the 5 billion euro barrier for the second year (5.2 billion euros) sales at Royal FloraHolland's marketplace were down 8% from 2021. 

In a difficult and unpredictable year for many growers the number of products traded decreased by 7% to a total of 10.8 billion, mainly caused by supply issues due to high energy costs for growers. Whilst 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 use of residual heat from industry.

Head of Royal FloraHolland, Steven van Schilfgaarde said: "The Dutch 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 and the government's policy thus stands in the way of the necessary investments in the energy transition and 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. Cancelled orders by international retail companies unexpectedly increased the supply on the clock, while the labour 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 per cent. 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

Losses aside 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 limited 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 programme. We also took several 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".