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Strategy

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Despite all the hurdles the last year has brought, our cooperative model has demonstrated its strength and its ability to adapt. The Group is now structured as two divisions, Agriculture & Processing Channels on one hand and Malting on the other, and we continue to pursue sustainable growth as we support the agricultural and nutrition transition.

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In today’s increasingly fluid and uncertain environment, what are Axereal’s ambitions?

Jean-François Loiseau: More than ever, we are supporting our 11,000 cooperative members, who co-own our means of production, through the transitions in our environment. In a spirit of collaboration, we are pulling together and working continuously to produce safe grain in quantity and add value as we pass it on to our customers in France and across the world by adapting to their needs and to changes in consumption habits amplified by the pandemic. This ability to adapt our model is an integral part of the Axereal philosophy, and as a Group we are committed to respecting the land and the men and women who work on it. Consequently, we aim to grasp all the opportunities with the potential to open up new future markets for our cooperative members.

How have the teams come through the last year?

Paul-Yves L’Anthoën: The dedication shown by our staff has been exemplary and outstanding, and we really must congratulate them for that. They have adapted to this unprecedented time and brought the business to high levels of performance that meet our customers’ expectations, despite the limitations imposed due to the pandemic. The business continued to run throughout, thanks to the teamwork between the cooperative’s elected officials and the operational teams: commercial relationships with our customers, suppliers and members and deliveries to them were maintained, across all our businesses. All orders were honoured and we’ve actually added new digital processes to the Agriculture & Processing Channels supply chain so that it has come out of the crisis modernised.

 

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We want to make Axereal a catalyst for a shift towards sustainable agricultural models.

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Jean-François Loiseau, Chairman, Axereal
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Changes within the Group have accelerated this year. In what ways is this transformation preparing the Group for the future?

JFL: We have indeed made some major changes in the past to adapt Axereal to transitions in society. We are continuing on this path, and this year we have embarked on a strategic shift in the way our agricultural businesses are organised, to adapt to a rapidly changing business environment. We are now structured into two balanced and complementary divisions: an Agriculture and Processing Channels division and a Malting division. The former includes our agricultural, milling and livestock businesses in the Centre region and nearby, where our French roots lie. This division is growing in strength because the activities are being led more effectively through optimised management of skills, logistics and supplies, as well as increased investment capacities. Ultimately, this makes us more agile and reduces operational risks. Our major aim is to structure production into channels. This will enable us to increase the amount of value we distribute to farmers while giving them access to better technical performance and the latest innovations in agronomy. Our Malting division will capture growth in what is clearly a buoyant market. Malting is a profitable activity that creates value and will bring a high degree of stability to the Group’s income, especially thanks to our strong presence in emerging countries’ growing markets. Because we work across a number of different production regions, we can draw inspiration from best practices and innovations to boost the performance of our business. All these avenues are part of a long-term strategic path with three focuses: striving for performance and excellence, diversifying sources of value creation, and prioritising sustainable growth. We are implementing this strategy transparently and efficiently, and in line with our duty to achieve excellence in operations and safety standards for our cooperative members, customers and consumers.

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What is your evaluation of the year 2020-2021?

PYL: In addition to the 10% fall in the global beer market during the pandemic, the 2020 harvest matched 2016’s historic low. So we’ve suffered two bad years in the last five! Nevertheless, our Group has not wavered from the sustainable growth trajectory it is following and has posted robust financial results and solid operational and sales performance. We have hit €165M in EBITDA and significantly improved operating cash flows, and so are able to maintain our published forecasts. Alongside this, we continue to implement our CSR commitments within the Group. Time has shown that our past decisions were the right ones, and we are in a position to maintain our trajectory and look to the future with confidence. Our progression in the malting sector is producing very positive results: we are now running production operations on five continents. Axereal has become a world-class producer and processor of grain, and in particular malting barley. The industrial malting facilities we have recently added to our portfolio, taking the Group to a total of 27 malting plants, are proving to be a strategic success in terms of growth generated for the business. In addition, during the pandemic, our strong commercial presence in the southern hemisphere helped us weather the temporary fall in sales in Europe. Lastly, across both our divisions we have strengthened our close links with our customers and suppliers. We are working together and innovating to meet the challenges of the food industry transition, take a new approach to production and serve society’s needs, without losing sight of the importance of delivering measurable results.

What are your objectives as regards sustainable development?

JFL: We want to make Axereal a catalyst for a shift towards sustainable agricultural models. That is the reasoning behind the channels that we are setting up to create more shared value between our customers and our farmers. We have accelerated this process over the last year: in 2021, we originated 700,000 tonnes of grain under channels. With this performance, we are on track to achieve our 2022 objective (1 million tonnes under channels). We are also leading the field in terms of channels, sustainable agriculture and reducing our environmental footprint, with our work to set up an ambitious carbon strategy. In addition, we are continuing our efforts to reduce the greenhouse emissions generated by our activities.

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Our Group has not wavered from the sustainable growth trajectory it is following and has posted robust financial results and solid operational and sale performance.

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Paul-Yves L’Anthoën, CEO
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What actions are you putting in place as regards innovation and agronomy?

PYL: As pioneers of the agricultural and nutrition transition, we are constantly searching for new ways of adding value to our cooperative members’ production that will make it a better fit for our customers’ needs. Agronomy support, and in particular solutions to reduce the use of inputs, lies at the heart of our innovation and growth strategy. Our aim is to develop, in partnership with all our stakeholders, more sustainable and collaborative alternatives that set us apart. As regards food processing, we can use new technologies to connect more directly with consumers, both to share information about what life is really like in our sectors and to demonstrate that our practices are responsible, in the fields of animal breeding or processing channels for example. In addition, thanks to the mass adoption of digital tools, we have been able to boost the performance of our teams in the field and the quality of their work. These tools have produced measurable improvements in areas such as logistics and production flows, e-commerce platforms and staff working conditions.

What have you done to reinforce Group governance?

JFL: The Group Executive Committee, the Board of Directors and the Regions share an identical vision, which gives us strength and stability to progress a shared plan. In particular, we have a shared understanding of the risks we face and what we need to do to mitigate them. We recently reinforced this common vision by setting up a Risks and Audit Committee. It brings together elected representatives and members of the management team to concentrate on assessing the risks and future challenges we face, and in doing so to increase the Group’s ability to adapt. Lastly, we have created a Remuneration and Appointments Committee, to look in particular at succession planning for our governance bodies, which sends very reassuring signals to our stakeholders.