THE NEXT STEP TOWARDS MORE VALUE INTEGRATED ANNUAL REPORT 2019/2020 READING GUIDE ABOUT AVEBE Avebe publishes an annual report each year to inform its stakeholders about its financial results. In mid-2018 we closed the previous strategic OUR RESULTS period and in 2018 our new strategy was brought to the fore: 'Binding GOVERNANCE AND and Building 2.0 – the next step towards more value.' With this new strategic direction we aim to create more value for our most important ASSURANCE AVEBE INNOVATION CENTER stakeholders: members, customers and employees, both now and in the GRONINGEN FINANCIAL STATEMENTS future. This is only possible if, in addition to our financial results, we also In 2018, Avebe opened its new take account of our impact in other areas. Sustainably binding means ANNEXES Innovation Center on the Zernike connecting people, planet and profit together and entering into Campus in Groningen. This center sustainable relationships. Sustainably building means working works on innovations in the field sustainably on a solid and future-proof cooperative with products that of potato starch and potato offer added value for our customers. In short, as a cooperative, we protein. There is also space for believe that the social interest must be in balance with the financial start-ups in the field of agrifood. interest. As well as various laboratories, the building houses a test facility, This integrated annual report is twofold. On the one hand, we account offices and a customer innovation for our financial results for the past year and, on the other, we tell you center. Innovation is in Avebe's all about our ambitions and results in the area of sustainability. We DNA and helps us to achieve a share our progress and tell you about our plans for the future. good return for our members, not only today but also in the future. With this Innovation Center Report on the 101st financial year of surrounded by knowledge and Coöperatie AVEBE U.A., educational institutions, Avebe is Veendam, to be released at now able to do this faster, better the General Members' Meeting and more efficiently. on 10 December 2020 2 Integrated annual report 2019/2020 TABLE OF CONTENTS ABOUT AVEBE OUR RESULTS GOVERNANCE AND 7 50 ABOUT AVEBE GOVERNANCE AND ASSURANCE ASSURANCE FINANCIAL STATEMENTS ANNEXES • About Avebe • Report of the supervisory board (including Binding and • Report of the board of directors Building 2.0) 15 • Risks and uncertainties OUR RESULTS • Materiality • Forecast of the board of • How Avebe adds value, now directors and in the future • Organisational structure 106 ANNEXES • Towards more value • Growth in good food • Market-led sustainable potato cultivation • Materiality analysis • Reducing our ecological 69 • Stakeholder dialogue and footprint FINANCIAL cooperation • Cooperation for the customer STATEMENTS • About the report • GRI table • Financial statements and notes to the balance sheet • Other information • Audit report of the 3 independent auditor Integrated annual report 2019/2020 FOREWORD This is the Royal Avebe's integrated annual report for the financial year 2019/2020. This is the second time we have combined financial reporting with a report on our sustainability strategy. ABOUT AVEBE OUR RESULTS With this new report, we are taking the next step giving our stakeholders even more information about what we have achieved. Much is going well, but there are some aspects that could be improved. Our Binding and GOVERNANCE AND Building 2.0 strategy is in essence a follow-up to the strategy we have pursued since 2013. In the course of time ASSURANCE we have firmed up what we do and do not want to do. We have also become more ambitious. In that respect it is important to focus sharply on market developments and make adjustments on that basis without losing FINANCIAL STATEMENTS sight of our objective. ANNEXES WE ENDED THIS WONDERFUL On 11 November 2019 Avebe celebrated its 100th anniversary with various festive activities throughout the ANNIVERSARY YEAR WITH A SYMPOSIUM ON 14 NOVEMBER DURING WHICH WE year. We ended this wonderful anniversary year with a symposium on 14 November during which we were WERE GRANTED THE ROYAL WARRANT. A granted the Royal Warrant. A title we are very proud of! TITLE WE ARE VERY PROUD OF! During this year, which was also marked by the impact of the corona pandemic, we paid a great deal of attention to communication with our members and employees, but also to our customers, suppliers, works councils and the trade unions. We have always put everyone's health first. I am impressed by the tremendous commitment of our members and personnel to get through this crisis together as best we can. Despite a poor harvest and the outbreak of the Covid-19 virus, Avebe's performance this year has been outstanding. Bert Jansen CEO Avebe 4 Integrated annual report 2019/2020 ABOUT AVEBE OUR RESULTS GOVERNANCE AND ASSURANCE FINANCIAL STATEMENTS ANNEXES ROYAL In honour of Avebe's centenary, His Majesty King Willem-Alexander granted the company the Royal Warrant. The Royal Warrant was presented during a celebratory symposium on 14 November 2019 by René Paas, the King's Commissioner in the Province of Groningen, to Chairman of the Board Bert Jansen. From left to right: Mayor of the municipality of Veendam Sipke Swierstra, CEO Avebe Bert Jansen, Chairman of the supervisory board Avebe Marijke Folkers, CFO Avebe Rob van Laerhoven and King's Commissioner in the Province of Groningen René Paas. 5 Integrated annual report 2019/2020 Cooperative of BIGGEST AND 1,326 MOST INNOVATIVE SUSTAINABLE 2,280 PRODUCER OF POTATO EMPLOYABLE AND GROWERS STARCH AND PROTEIN COMMITTED IN THE WORLD EMPLOYEES ABOUT AVEBE DUCAM up and OUR RESULTS running in Ter 7% Apelkanaal Animal feed 23% GOVERNANCE AND THE VALUE OF THE ASSURANCE FOOD INGREDIENTS USED IN THE PLANT- FINANCIAL STATEMENTS BASED AND ENVIRONMENTALLY ANNEXES WATER USAGE 26% Industrial 67% FRIENDLY END PRODUCTS market Food IS NOW 23% OF CARBON EMISSION 16.2 Mm³ industry IN TONNES ALL FOOD 207,605 PRODUCTS CARBON EQ PER TONNE OF PRODUCT Malmö Sweden The Neth- 0.200 Germany China USA Turkey Foxhol Dallmin Japan Lüchow Taiwan Ter Apelkanaal Gasselternijveen € 96.15 Singapore per tonne Our locations PERFORMANCE PRICE Sales offices Locations & sales offices 6 Integrated annual report 2019/2020 ABOUT ABOUT AVEBEAVEBE OUR RESULTS GOVERNANCE AND AVEBE ASSURANCE FINANCIAL STATEMENTS STATEMENTS • ABOUT AVEBE (INCL. BINDING AND BUILDING 2.0.) ANNEXES • MATERIALITY • HOW AVEBE ADDS VALUE, NOW AND IN THE FUTURE 7 Integrated annual report 2019/2020 ABOUT AVEBE Avebe is an international cooperative of starch potato growers. Our ABOUT AVEBEAVEBE innovation is aimed at developing high-value ingredients based on potato starch and potato protein for the food industry, animal feed and OUR RESULTS industrial applications. Our ambition is to contribute in this way to GOVERNANCE AND making these sectors more sustainable. Together with our employees, members, growers, customers and other stakeholders, we work on this ASSURANCE every day. FINANCIAL STATEMENTS ANNEXES OUR MEMBERS Our members are potato growers in the Netherlands and Germany that we work closely with to achieve the best quality starch potatoes. Cooperative Avebe focuses on the economic and ecological continuity of the business and on its members’ farming operations. OUR CLIENTS Avebe develops and produces ingredients based on potato starch and protein for three markets: food, feed and industrial applications. This is how we meet the need for sustainable and healthy products for humans and animals. OUR PRODUCTS Potato starch is by far our most important raw material. But the potato contains much more, such as protein, which is a valuable raw material for many products. For example, it is a plant-based substitute for meat and dairy products and confectionery. It is also an alternative to soy in food and animal feed products. Go to www.avebe.com/producten for a complete overview of all brands and ingredients. 8 Integrated annual report 2019/2020 our customers in food, animal feed and industrial applications. This collaborative foundation has three pillars: growth in good food, market- ABOUT AVEBE led sustainable potato cultivation and reducing our ecological footprint, with clear objectives for 2023. Our purpose, foundation and pillars REFINEMENT AND CROP OPTIMISATION together form the Avebe House in which all pillars worked together in To achieve all sustainability ambitions for the market and the 2019/2020 to pursue the Binding and Building 2.0 strategy. From page 15 environment, our growers need the best varieties of starch potatoes that onwards, our efforts for each pillar are described in this annual report. are suitable for their soil, cultivation processes and are resistant to ABOUT AVEBEAVEBE external weather conditions and the presence of diseases and pests. To OUR RESULTS meet this need, Averis Seeds B.V. - a subsidiary of Avebe - focuses on the development, propagation and sale of starch potato varieties most GOVERNANCE AND suitable for cultivation in the Netherlands and Germany. ASSURANCE Avebe also supports growers with the Optimeel crop optimisation THE FINANCIAL STATEMENTS AVEBE program. By means of crop registration, study groups and trial and HOUSE ANNEXES demo fields Optimeel focuses on improving the yield of starch potato cultivation. Together with the new starch potato varieties developed by 1 | HEADING FOR MORE VALUE Averis, Avebe is working on making cultivation more sustainable and achieving good business results for its members. 2 | GROWTH IN 3 | MARKET-LED 4 | REDUCING GOOD SUSTAINABLE OUR POTATO ECOLOGICAL BINDING AND BUILDING 2.0. CULTIVATION FOOTPRINT The need to reduce the footprint of food production is prompting more and more people and companies to consciously choose plant-based foods and ingredients. This is an important stimulus for the value creation 5 | COOPERATION FOR THE CUSTOMER that Avebe aims to achieve.