Annual Report 2018

TRANSITION TOWARDS ALTERNATIVE EGGS

The Avril group engaged with its partner livestock farmers as well as its costumers and clients to accompany the transition towards alternative eggs.

What is the idea behind this first “Integrated” Annual Report from Avril?

Arnaud Rousseau : Presenting Avril this way is wholly in line with what we are: a company whose model for 35 years has been based on the ideas of growing the French Farm, not paying dividends and creating value at all levels in the chain. This is an extremely modern model that encompasses the notions of corporate responsibility and business excellence, as well as reflecting all the values that drive our activities. These are values that are held in common by our shareholders in the farming world, our employees, partners and customers, and our consumers. 

Jean-Philippe Puig : Few companies start developing their strategic plan by analyzing their impact on criteria such as creating jobs in rural areas, product traceability or greenhouse gas emissions, etc. But that is what we have done since 2012 by determining our activities as a function of these criteria before even considering their financial aspects. 

Why did you launch a debate on the Group’s vision just four years after it was set up? 

J-P.P : We did this in response to demands from our colleagues: beyond our overall mission, what are the ties that unite Avril employees that might also be relevant to all stakeholders in the sector? These collaborative efforts have not yet been completed, but they have already given rise to the slogan: "Cultivate Tomorrow". It is the idea behind these simple words that is important: a committed vision of agriculture, of growth in the sector and of innovation and corporate responsibility. Quite apart from our five-year strategic plan, these are the ideals we continue to defend. 

A.R : As we did when discussing our values in 2013, we are formalizing what were, and will always be, our guiding principles. This collective approach creates an internal dynamic in which farmers of the “filière” are strongly involved. 

What is your assessment of 2018? 

A.R : After a very difficult year in 2017, our teams made extraordinary efforts to redefine our goals and priorities for the next five years, and to evaluate our model and our risks, strengths and weaknesses. This was a major achievement which gave rise to the Avril 2023 plan that was validated by the Board at the end of the year.

J-P.P : In business terms, the year was clearly one of two halves. During the first half, the Group suffered and focused on its costs, with particular emphasis on increased rigor throughout the organization. The second half was much more satisfactory. 

Could you qualify it as a year of recovery? 

J-P.P : Certain decisions clarified the horizon regarding strategic regulatory issues, such as the future for biodiesel in Europe between now and 2030 or support from the French government for our new fuel, Oleo100. These favorable outcomes have restored a positive dynamic, but we must remain cautious. We are subject to the external risks inherent in agriculture and livestock farming, sectors that continue to experience problems that affect both our customers and suppliers. 

A.R : 2018 clearly marked the laying of new foundations for the Group, and the resilience of our model is a true reason for confidence. Recovery was less marked from an agricultural point of view. The situation remains complicated for both the arable and livestock sectors. We have contributed to the debate on valorization and the need to upgrade French agricultural and food products.  But we need to go further. What do we want to do with our farming model? What about French and European food sovereignty, notably in plant proteins?  Wherever we are active, development of the French Farm and its local sectors, which is one of the Group’s vocations, is central to these questions that require political responses. 

What were the most important events for Avril during 2018? 

J-P.P : I can think of at least five. The first that comes to mind is the acquisition of Costa D'Oro. At a difficult time, we were nevertheless able to seize this opportunity. As well as this emblematic Italian brand, it is the entire olive oil sector that we hope to continue developing. Terrial and its organic fertilizers have become the French leader within just five years, and now offer an important dimension for Avril.  The innovation represented by Oleo100 shows that it is possible to produce a fuel that is 100% renewable and 100% produced by French farmers. As for livestock sectors, the commitment of Matines to alternative eggs is an important milestone in the implementation of our animal welfare policy. We shall be pursuing this dynamic of commitment, while supporting sectors pragmatically and responsibly and respecting the efforts of all actors. I would also like to mention the Avril Campus, which apart from being an architectural exploit symbolizes a different way of working together. Finally, we need to remember all the efforts made to improve health and safety results that were somewhat lacking in 2018. 

What was the mind-set when developing the new Avril 2023 strategic plan? 

J-P.P : We continued our foresight efforts based on criteria on the contribution of the oilseeds and proteins sector, and CSR criteria, and we confirmed the principal orientations that have guided the Group during the past five years: the need for an important international presence and the central role of innovation, with human relations as their driving force. The most important change was to take more account of customer and consumer needs in our progress dynamic, anticipate their demands and their impact on upstream agriculture. 

A.R : Although we are clearly customer-focused, our primary corporate responsibility is to keep our word. We are fully aware of demands from society and will make every effort to respond to them. In the area of animal welfare, we need to advance more rapidly and become a leader. We have made our commitments to our partner livestock farmers, and they trust us in return.  Our responsibility is to support them, work with them to find alternative solutions and funding and help them to adapt to rapidly changing markets. This is a fundamental principle for our Group: those who produce are equally as important as those who buy. 

.

You place great emphasis on human relations in the Avril plan. What progress has there been in this area?   

J-P.P : We have produced a formal code of ethics and good practices which has been explained clearly and sent to the homes of all employees. The Executive Committee and I ensure that all our actions are consistent with our values. This is also the reason why we attract new recruits. Furthermore, we continue to organize our structure so that we can improve our talent management. As a Group, Avril is only four years old, which is very young, but to remain attractive we must foster the development of our colleagues. The Comex for Young People helps us to respond to the needs of the new generation. 

What are your thoughts about the future?

J-P.P : We are still in an unstable position, with uncertainties linked to our political and social environment. However, these years of crisis have given us confidence: we have the talents we need, considerable work has been carried out on the strategic plan, and our governance bodies and partners have renewed their trust in us during a difficult period. 

A.R : The problems we have encountered, as well as current and future questions, make our model even more relevant. Avril’s raison d'être offers a real opportunity, even in terms of international visibility and reputation.

AVRIL, CULTIVATE TOMORROW

Avril was set up in 1983 at the initiative of farmers in order to assure long-term markets for the production of French oilseeds, notably rapeseed and sunflower.  In 35 years, Avril has become a major industrial and finance group, present in France and internationally in a variety of activities both upstream and downstream in the sector. It draws strength from a portfolio of strong brands such as Sanders, Lesieur, Puget, Costa d’Oro, Bunica, Matines, Taous, Diester or Oleo100, etc.  Its sectoral organization is consistent with the current and future challenges faced by agriculture.

• A model that is human

We believe in the uniqueness of each person’s talents. The diversity of our activities and the regions where we operate draws strength from our values of Respect, Boldness and Performance.

• A model that is financial

We reinvest most of our profits in the development of the oils and proteins sectors.

• A model that is for growth

We disseminate our know-how and cultivate new sectors beyond our historic activities, in order to create sustainable value in new markets and new regions.

• A model that is for innovation

Throughout the oils and proteins sectors, we give priority to new ideas and to research, thus serving agricultural, food and energy transitions.

• A model that is for alliances

Central to our performance is our role as a partner and investor in innovative and responsible companies active in a variety of agricultural, agrifood and agribusiness sectors.

• A model that is for action

We act today in order to better prepare tomorrow, working closely with all our stakeholders in order to transform our sectors at each level in the value chain from consumers to producers.

A GROUP STRUCTURED AROUND AGRICULTURAL AND INDUSTRIAL SECTORS

Download the diagram

OUR HISTORY

In the space of 35 years, the company initially created by farmers to give the oilseeds and proteins sector a financial tool dedicated to its development has come a long way. It has become a financial and industrial group gathering almost 7 500 employees, with diversified and complementary activities at every stage of the sector: financial support of investment projects, food and feed, development of renewable energy and chemistry. 

• 1983 - 1993

Sofiprotéol was born in Paris in 1983.

Ten years earlier, the American government had caused a global shockwave when it imposed an embargo on soybean exports. The French farming sector became abruptly aware of its dependence on American soybean, an oilseed that was essential to feed livestock throughout the country.

An unprecedented response brought together farmers, the public authorities and industry with a view to creating a French sector for oilseeds and proteins. In order to assure the future for this sector, a new industrial and financial tool was created: Sofiprotéol.

Investments, stake acquisition, implementation of innovative research programs, creation of new markets… On all fronts, Sofiprotéol deploys a double expertise, both financial and industrial, to ensure the development of the oilseeds and proteins sector. 

A major achievement of these objective, at the end of the 80’s, is the creation of a new market for the oilseeds : the biofuels, and the creation of Diester Industrie in 1992.

• 1993 - 2006

Sofiprotéol pursued its strategy with respect to structuring the sector and developed activities in oleochemistry, biotechnologies, animal nutrition and human foods.

At an industrial level, it took a decisive step by taking over direct management of its industrial assets and developing a major production tool for Diester®.

By the mid-2000s, drawing strength from its by-product strategy, Sofiprotéol had become the leading oilseed group in France and one of the main biofuel producers in Europe.

• 2006 - 2015

The 2000s were marked by an acceleration of change for Sofiprotéol in terms of both the financial structure of the Group, a broadening of its activities and its international development.

The time had now come to conquer new horizons to reaffirm the sectoral strategy that had enabled its success since 1983.

Sofiprotéol looked to the future by involving its principals in the compilation of an ambitious strategic plan, CAP 2018.

• 2015 - 2020

A new governance and new organization: the Group moved up a gear and formulated its new ambitions.

TWO COMPLEMENTARY ACTIVITIES TO SERVE AVRIL’S MISSION

AVRIL GROUP PRESENTATION (2015 VIDEO)

TAILOR-MADE GOVERNANCE WITH STRONG ROOTS IN AGRICULTURE

By separating the power of shareholders (the limited partners or associés commanditaires which include the FIDOP*, FOP** and the Fondation Avril) from that of the manager (Avril Gestion, the general partner or associé commandité), this governance structure contributes to ensuring that the founder shareholders – farmers in the sector – remain central to Avril’s plan and ensure its transmission to future generations. The additional presence of the Fondation Avril (recognized as a public utility) among the shareholders guarantees a long-term vision and ensures the continuity of the Group’s mission, broadened to include societal challenges. The partners work through a Supervisory Board and the manager operates through the Board of Avril Gestion. Governance focuses on long-term valorization, as the Avril Group always reinvests most of its profits in the development of the oils and proteins sectors.

* Interprofessional Development Fund for the Oilseeds and Proteins Sector

** French Federation of Oilseed and Protein Crop Producers

Governance highlights in 2018

• Updating of CSR policies

With respect to sustainable palm oil, animal welfare and responsible purchasing, Avril pursued the structuring of its CSR policies in the form of progress initiatives.

• Circulation of an ethical code

A code for ethical conduct was formalized and sent out to the homes of all employees. It presents the standards with which all employees must comply in their everyday activities and relationships with others.

• Sustainable performance indicators

Avril created an index called “Spring” which will use a synthetic score (out of 5) to measure progress in the CSR approach throughout the duration of the Avril 2023 strategic plan.

• Dialogue with stakeholders

Organization of events for regional officials and farmers within the Group’s facilities; these include site visits, meetings with employees and a presentation on the challenges faced by the oilseeds and proteins sector.

• Comex for Young People

Avril’s Comex for Young People appointed its second group of members for two years. Sixteen employees below the age of 35 thus joined the Committee from different entities, activities and countries of the Group. The vocation of this Youth Comex is to ensure active participation of the new generation of managers in Avril’s future.

Download the document

THE FONDATION AVRIL

Recognized as a public utility in December 2014 when it was set up, the Fondation Avril is one of the few such foundations to hold shares in a French corporation. Its vocation is to fund community projects at the heart of rural France, as well as driving a certain number of projects itself. For the next few years, its actions in France have been redirected towards supporting the transition of farming models with particular emphasis on three main themes:

•  Supporting the diversification of agriculture to create social and economic value in different regions,
•  Reinforcing the links between agriculture and society, and
•  Promoting healthy and sustainable foods made using high quality products.

In Africa, the Fondation Avril is pursuing its efforts on preserving soils and cultivated biodiversity through the development of different sectors.

Europe in pole position – From a regulatory standpoint, Europe is now much more stringent than other continents (Americas and Asia) regarding sustainability criteria. 

The challenge for Avril: To reconcile these demands with the need to feed the planet.

The response

• Avril’s sectoral model guarantees the traceability of its products and can restore consumer trust.
• The Group has acknowledged expertise in supporting livestock farmers to respond to these new trends (demedicalization, animal welfare, short marketing channels, etc.).
• Avril develops sectors of excellence and supports the conversion of farms.

*Source: Cetelem Observatory, 2013.

Greater demand for food – In terms of both quantity (according to the FAO, +60% between now and 2050) and quality, thanks to a rise in purchasing power and more stringent demands from different populations. This trend is accompanied by an increasing demand for vegetable proteins in all countries.

The challenge for Avril: To produce more and better using fewer resources.

The response 

• By exporting its sectoral model, Avril is contributing to the sustainable structuring of agricultural production, notably in Africa.
• Its Sustainable Health Management approach enables optimization of the performance of livestock units.
• The Group is driving an ambitious strategy of innovation in vegetable proteins.
• Avril is an actor in the circular economy, based on synergies between its different activities.

* Source: BIPE Study 2015

** Source: FAO

Regionally responsible companies – Recent events have demonstrated an increased need for social and regional cohesion. Companies are above all local actors and have essential corporate responsibilities in the areas where they operate. They can become a key element in restoring local communities. 

The challenge for Avril: To restore local value and links between different regions.

The response 

• The Group’s ambition is to restore value and competitiveness to the French Farm.
• A national network in contact with the Group’s 26,000 partner livestock farmers.
• Through its subsidiary Sofiprotéol, an increase in investment in French agricultural and agrifood sectors.

* Source: IFOP Survey of Rural Families in October 2018

Focused European policies – In 2018, Europe defined a 2030 goal for renewable energies used in transportation and confirmed the role that must be played by agriculture in achieving this objective.

The challenge for Avril: To reduce the impacts of agriculture and make it a solution to climate issues.

The response

• Avril is committed to reducing its own industrial impacts. This commitment was reasserted with the French Business Climate Pledge
• The Group supports its partners in making changes to arable and livestock farming practices.
• Avril innovates by proposing new energy sources (Oleo100) with a high capacity to reduce GHG* emissions.

* Greenhouse gases.

Numerous questions concerning the future – In a hyper-connected world, companies are subject to increasingly complex risks affecting political, regulatory, economic and social ecosystems.  What will be the future implications of trade agreements and Brexit, the role of renewable energies in transport and domestic use, or the CAP?

The challenge for Avril: The current context requires caution and consistent skills in understanding, anticipating and adapting.

The response

• Operating in a difficult context in recent years, the Group has demonstrated the resilience of its model.
• Reducing exposure to risk is an important component in the Avril 2023 strategic plan.
• Avril works to improve flexibility throughout its organization (simplification, shorter decision circuits, etc.).

THE AVRIL 2023 PLAN

The guidelines laid down in Avril 2023:

• A mission that is central to Avril’s business model: the levels of contribution to sectoral development and the corporate responsibility of different Group entities modulate their economic and financial objectives. 
• A new sectoral approach according to the principle of a pull flow system based on changes to customer and consumer demands in the future (sectors of excellence, traceable products, French origin, animal welfare, carbon efficiency, etc.) and their implications for upstream agriculture.  
• Projections based on cautious scenarios that take account of uncertainties in particular markets and environments.
• Company values and plans that give a sense to the commitment of employees: to contribute to inventing sectors for the future within a Group that reinvests almost all its profits in accomplishing its mission.

4 STRATEGIC AREAS TO SERVE A SUSTAINABLE AND COMPETITIVE MODEL

STRATEGY AND CSR: AN INTEGRATED VISION

The Avril Group was built just over 35 years ago on two main principles: a general interest mission to serve France’s independence in vegetable proteins and a decision not to distribute dividends to its shareholders but reinvest almost all of its profits in the sector. 

This makes it an atypical business model. Furthermore, from the start in 1983, Avril’s mission was already focusing on developing the sector and protecting the planet. In 2018, Avril made a choice to introduce a single governance structure for its RID* and sustainable development, thus indicating its awareness of the rapid changes ongoing in its environment and of consumer demand for more sustainable agricultural products and practices; today, the CSR dimension forms an integral part of the Group’s innovation process.

* Research, Innovation, Development.

An extra-financial analytical tool to serve the group’s objectives

In the context of the strategic plan, an extra-financial analysis of industrial operations is performed to position each activity according to Avril’s mission.

This mapping is designed around two key areas:

• contribution to the development of the oils and proteins sectors: value creation, markets for oilseed and protein grain, share of traceable/certified products;
• contribution to the Group’s Corporate Social Responsibility: food production, GHG emission levels, innovation, job creation, development in emerging countries.

This analytical approach, introduced initially in 2012, was naturally used for Avril 2023 and enabled the determination of performance goals for each sector.

THE SPRING APPROACH: SUSTAINABILITY PROGRESS INDEX

With its 2023 plan, Avril is reinforcing its CSR approach, first formalized in 2010 with the creation of the Group’s Sustainable Development Department. 

A new CSR framework will accompany these strategic orientations, based on five pillars that reflect the Group’s mission and are deployed under 14 themes. This program will drive the Group regarding some fifty indicators, twenty-five of which include 2023 goals. CSR provides a framework for Avril’s strategy not only in terms of its design but also its execution. An index called “Spring” will therefore use synthetic scores out of five to measure progress in the CSR approach throughout the period of the plan. In 2019, Avril will be publishing its first mandatory Statement on Extra-Financial Performance and has merged its two reports – Activities and Sustainable Development – into a single Annual Integrated Report.

CONTRIBUTION TO THE UN SDGS

Sustainable development: 2023 commitments and objectives

17 sustainable development goals (SDG) were defined by the united nations in the context of the 2030 agenda, an ambitious global program for progress. In view of its activities, Avril can contribute to achieving several SDGs which were identified when the new CSR framework was compiled for the group.

Download the tables

It is essential to innovate in order to construct a sectoral model for the future that will better meet the quality and sustainability demands of customers and consumers, while at the same time offering new solutions.

A multifaceted approach to innovation that will serve the Group’s mission

From the start, for Avril, its sectors and the farming world, innovation was a lever for value creation and transformation and a source of new market opportunities. In-house RID, joint research efforts with other actors in the sector, partnerships within industrial consortia or with start-ups, stakeholdings taken by the finance and development company Sofiprotéol, and contributions to innovation capital funds, etc.

Proteins and biotech, breakthrough innovations

For the past three years, the Group has been working on valorizing the protein fraction of grain. One of the most advanced projects is the new activity of protéochimie® (protein chemistry). In 2019, Evertree (video) will commercialize  an alternative enabling a significant reduction in the presence of mineral resin in wood-based panels, and in the air pollution linked to the volatile organic compounds (VOC) generated by the resins. 

The Group is also pursuing its work on new generations of sunflower and rapeseed-based proteins for future applications in human foods.

The focus on biotech started in 2015 regarding the demedication of livestock units. Avril’s start-up Nolivade has made a further contribution to preventing diseases and ensuring animal welfare (see below). On its side, oleochemistry is participating in the LIPES* program, a European project that involves a consortium of partners from both upstream and downstream; its aim is to develop a new enzyme-based technology that is less aggressive and energy-intensive than chemical hydrolysis processes. 

* Life Integrated Process for the Enzymatic Splitting of Triglycerides

Innovation as vehicle for progress

Among the features of Avril 2023, organic products play a significant role in the Group’s main activities, not so much in terms of opposing conventional methods but responding to increasing demands from customers and consumers.  Following the same logic, and aware of the societal challenges linked to livestock farms, Avril has pursued its progress initiative on animal welfare. This policy is based on the Sustainable Health Management approach adopted by Avril several years ago and now deployed internationally.

Digital innovations to serve upstream agriculture

Preparing the future also means entering the era of connected agriculture. This has involved major advances in terms of digital tools and data processing: a "smartfeed" program for livestock farmers, the first tool (Canopée) being designed to analyze and exploit livestock management data on-farm, or the blockchain technology which in the near future should enable Matines to demonstrate to consumers the complete traceability of the eggs they are buying.

AVRIL GROUP - ORGANIC ON ALL FRONTS

From upstream to downstream, Avril is conducting several projects on organic sectors in response to this strong consumption trend that is giving new potential to agricultural production and practices.  Associated with Suez through its subsidiary Terrial since early 2019, Avril is already confirmed as the leader in organic fertilizers in France. The new joint enterprise aims to offer a complete range of organic fertilizers and soil improvers that notably target organic farms for their use.   The Group is accelerating the development of its organic oils and condiments under the Lesieur and Puget brands (four new products in 2018) and by drawing strength from its acquisition of Costa D'Oro, Italian leader in the organic olive oil market.

  Livestock sectors are also affected by this trend. Upstream, Avril aims to become the leader in organic livestock feeds. By deploying its organic offer throughout France, Sanders achieved 42% growth in this segment in 2018. Downstream, Matines is now committed to supplying 100% alternative eggs by 2025, 20% of them produced organically. Finally, Avril supports its partner livestock farmers in converting their farms.

Initiated in 2015 in the context of the previous strategic plan, the development of specialty products has been confirmed as a core feature of Avril’s success. In other words, the aim is to shift from a volume-based strategy to a value-based strategy that will provide the Group with the leeway it needs to grow. As the spearhead of this transformation, the Avril Specialties Business Line is pursuing its growth in oleochemicals and animal specialties, two activities that are driven by innovation, an international presence and customer proximity.

At the cutting edge of oleochemical technology

Oleon, which has just celebrated ten years as a member of the Group, is pursuing its specialty strategy in global markets such as cosmetics, lubricants, coatings or foods. In 2018, this important actor in renewable chemistry opened a new unit for the production of isostearic acid and dimers in Ertvelde (Belgium), specialties manufactured using a raw material from our sector: high-oleic sunflower oil. This new proprietary technology, which can offer customers highly specific and top quality applications, should confirm Oleon’s leadership in this market segment. As a driver in terms of CSR, it should also be noted that for the second year running Oleon received an EcoVadis Gold rating for its efforts, notably in the areas of the environment and sustainable purchasing, this score placing it amongst the top 1% companies of its sector rated by this international agency.

Innovative solutions for sustainable livestock farming

With the ambition of becoming a recognized actor in the management and optimization of the performance of livestock farms, in 2018 Avril Animal Specialties (AAS) passed the symbolic threshold of achieving 50% of its turnover internationally, with an increasing share of its innovation pipeline being dedicated to the sustainable health management of livestock units. In terms of biosecurity (preventive hygiene) Avril now ranks first in Europe in the pig-poultry sector, and its nutritional solutions to replace medications are attracting increasing interest. AAS is reinforcing its efforts in all its priority growth areas and notably digestive health, prebiotics and probiotics with Nolivade, limiting ruminant waste, and aquaculture which represents considerable potential for growth.

New activities and markets for Avril Vegetal

Among many other projects, 2018 saw the birth of Oleo100 (see below), the first 100% plant-based, renewable and traceable fuel, 100% made in France. Oleo100 can totally replace fossil diesel. Through the acquisition of Lecico, a German company specialized in lecithins and phospholipids, the Group is pursuing the growth of its activities in the sector and has become the leading actor in non-GM lecithin in the European market. Lecico has thus joined Expur, Kerfoot, Lesieur, Novastell and Saipol within Avril’s Oil & Ingredient Solutions, a platform specialized in refined and specialty oils and ingredients, which already offers a vast portfolio of products to industrial customers.

Upgrading the image of our brands

Another part of the Group’s strategy is to recreate value around B2C brands, notably in the oils market. Avril is reviewing the marketing mix of its own brands in line with its mission. Relaunched in 2018, Lesieur’s ISIO 4 oil has reinforced its health benefits through an optimized formula and contains 95% French grain oil. In 2019, it will be the turn of the olive oil brand Puget to accentuate its membership of the Avril Group as being a competitive advantage that is wholly in phase with consumer demands, offering a Puget oil of 100% French origin, alongside its variants in the Mediterranean basin: 100% Moroccan and 100% Greek. For its condiments and sauces, Lesieur is highly export-driven, based on the concept of French gastronomy; the markets it is targeting as a priority are China (market testing is ongoing in Shanghai), the Middle East and North America.  

The highlight of 2018 was acquisition of the Italian brand Costa d’Oro this has propelled Avril to third place globally in the branded olive oil market and the aim is to develop the olive oil category according to a sectoral structure, the hallmark of Avril.

AVRIL VEGETAL

Oleo100: a new fuel and new activity for Avril

The fruit of joint efforts by farmers, Avril and vehicle constructors, Oleo100 is a new, 100% plant-based, renewable and traceable energy source produced by French agriculture.  Manufactured and sold by Saipol, it is intended for captive fleets, and in the first instance those operated by haulage contractors and local government bodies. It can wholly and simply replace fossil diesel, achieving equivalent performance without extra cost; its carbon balance is more than 2.5-fold better, and it also reduces fine and ultrafine particle emissions by more than 80%. With Oleo100 (see video), Saipol has become a direct supplier of energy and privileges short channel marketing without any intermediaries. This innovation responds to the Group’s deliberate strategy to support the professional haulage sector and local government in their energy transition by providing an immediate and pragmatic solution. It is also a lever to create more value for French agriculture and industry.

For 35 years, Avril has been operating in agricultural and energy commodities markets that are highly exposed to external risks: harvest yields and quality, raw material prices, European regulations on biofuels, health issues in French agriculture and livestock farming, etc. All these factors can have potentially important impacts on the Group’ results.

Avril has just lived through two years of crisis affecting its biodiesel activities. Particularly implicated has been unfair competition from Argentine soybean esters where a European response was only implemented in February 2019 with the introduction of a quota system and minimum price designed not to distort the market.

Drawing on this experience, the Group has now placed risk exposure as a central theme of its 2023 strategic plan. This aims in particular to support and secure commodities that are essential markets for the sector, so that once again they will be profitable and sustainable.

Everything starts with safety

2018 will be remembered for the accident at the Saipol plant in Dieppe which caused the death of two employees of an Avril subcontractor. This tragic event reminds us that safety is never a certainty, even though it has been our number 1 priority since 2013. After years of progress during which the commitment to reducing the number of accidents by 20% a year was achieved, the trend was reversed in 2018. In this context, the Group initiated a new road map which focuses even more on individual behaviors (see below), supplemented by a program to reinforce prevention in an industrial setting. In addition, numerous sites have consolidated their skills and sustained an excellent level of prevention, such as Saipol in Montoir-de-Bretagne, Matines in Montdidier, Sanders in Saint-Thégonnec, Lesieur in Vitrolles, la Compagnie des Saveurs in Noyers-sur-Cher, Oleon in Belgium, Expur in Romania and Kerfoot in the UK, etc.

Combining industrial and environmental performance

Initiated in 2013, the operational and strategic excellence approach (EOS) has already enabled the Group to save more than €100 million. To continue gaining in competitiveness, Avril is modelling its methods and ensuring more rigorous monitoring of their execution. Work on rationalizing the supply chain is ongoing, the aim being to improve sales planning and forecasts, logistical costs and “just-in-time” customer service in all activities. Reducing costs also requires improvements in energy performance, the challenge being to achieve more with less. Six of Avril’s largest plants are now equipped with biomass boilers that supply 95% of their thermal energy needs.

Valorizing the commodities business

The idea is to segment and valorize offers based on demands from customers and consumers.  

For example, Saipol’s strategy regarding biodiesel is to monetize its environmental performance (see below). In the oilseeds meals market, greater emphasis is being placed on the advantages of non-GM feeds for livestock and the supply of tailor-made protein concentrates as a function of demand. The online marketing platform FeedMarket.fr can create direct links with customers that will enhance this valorization (see below).

Restoring value in the egg and table oils branches

Avril’s strategy in the egg market is to shift from a volume-based to a value-based model. For the past two years, the entire branch has been reorganized to adapt to a markedly changing market reflected by decelerating sales of standard eggs. The iconic Matines brand has now committed to supplying 100% alternative eggs by 2025; these will come from hens reared in barns, free range or under organic conditions. In the table oils market, Lesieur’s ISIO 4 and Puget’s oils have been relaunched in the context of Avril’s vision of Cultivate Tomorrow, in order to earn more value.

AVRIL GROUP

A new safety dynamic: the “WE CARE” program

To give new impetus to continuously improving safety, Avril is setting up a program developed jointly with operational staff in its facilities. An audit performed at six production sites resulted in a report of the current situation and was able to define the principal opportunities for improvement. The goals fixed for 2023 include halving the number of injuries in order to work towards a zero accident rate. To address this challenge, existing methods and tools will be enhanced. Furthermore, greater emphasis is now being placed on individual behaviors and personal commitment ; priority is given to prevention and exemplary behavior by managers who will be trained to develop the approach. The aim is that each person should feel responsible at all times for his or her safety. Lesieur Cristal (Avril’s subsidiary in Morocco) was the pilot for the Group regarding the design and organization of computer tools dedicated to managing this safety dynamic.

In the early 2010s, Avril was still a grouping of SMEs. The profound transformation initiated in 2012 has led to fundamental consolidation of the Group.  The shared services center, the Group intranet, integrated computer system and Avril Academy, etc., are all concrete achievements that illustrate how far we have come. As a major element in this consolidation, the Avril Campus was opened at the end of 2018. In Bruz (Ille-et-Vilaine) it now assembles all animal sectors and services that were previously spread between different sites in the Rennes area (see below).

Our colleagues, actors in this transformation 

The creation of a common management culture is one of the objectives of the Avril Academy, the Group’s in-house university that is continuing to increase its offer of qualifying management training. Skills courses focused on the priorities of the Group’s transformation are also being set up and helping to drive this culture shift.

Another major change with respect to talent management is that career interviews have become Career Development Conversations, a special moment that is separate from the annual performance interview and offers employees an opportunity to look to the future with their manager.

Ongoing modernization of industrial assets 

More than €180 million have been committed by the Group since 2015 to developing and modernizing its industrial facilities in order to adapt to changing markets. Lesieur, which has just opened a new mayonnaise factory in Algeria – where the brand is market leader – is planning a three-year program of renovations to its French sites. The Abera pig slaughtering and butchery facility has reorganized its export packaging workshop to include new automated technologies. Finally, the 4.0 industry model introduced in 2017 at the pilot site in Mériot (Aube) is now being deployed in other Saipol plants, and by Oleon and Sanders. The aim is to reduce variability in process and product quality while facilitating the work of operatives.

A further step forwards in corporate social responsibility 

Pursuing this transformation also means continuing to advance with respect to sustainable development, a highly differentiating feature of the Group. A new CSR framework supports the 2023 plan in the form of five pillars that reflect Avril’s mission. The Group is taking another step forwards by creating an indicator, “Spring”, which will measure its progress through a score for each CSR pillar and a global score.  Actions by Avril subsidiaries and Sofiprotéol are also aligned with this framework; for Sofiprotéol this will involve reinforcing its policies on appraisals of its stakeholdings in terms of CSR. 

AVRIL GROUP

A new Campus that is very Avril

Opened officially in December 2018, the Avril Campus marks a symbolic stage in the Group’s growth. It federates and assembles 450 employees who are now working in a space imagined to foster new collaborative and interactive methods. As well as the Comex for Young People and the managers concerned, more than 70 employees were involved in the steering committees that drove the project at each stage. The new campus also has a company restaurant that offers fresh, local produce, and sports facilities are available to staff.

The circular, light-filled space, whose design was inspired by a clock, reflects the cycles that drive the activities of the sector and recall the shape of grains: the building has a diameter of 84 meters and three levels, with an indoor, covered and bioclimatic atrium in the center covering more than 2000m2.  Resolutely focused on sustainable development and with HQE certification, the building’s roof is home to a photovoltaic power plant that meets all its needs and also generates sufficient electricity to supply a further 60 households every year.

The diagram representing the breakdown of financial flows enables to highlight some of the Group's special features:

• About 75% of Avril's tunrover goes back upstream turnover its suppliers. This proportion is mostly due to agricultural rough material supply, which generates employment in rural areas.
• The employee remuneration represents the second item with 7% of the turnover by 67% of the added value.
• Avril pays very few dividends. These are mainly granted to financial partners and minority stakeholders of the Group.
• Finally, the Group reinvest the equivalent of 28% of its added value, which notably includes external growth investments (mainly the acquisition of Costa d’Oro), the ongoing investments (CAPEX) and the sectorial investments by Sofiprotéol.

BREAKDOWN OF FINANCIAL FLOWS GENERATED BY THE GROUP IN 2018

Download the diagram

AVRIL, A GROUP COMMITTED TO THE SUSTAINABLE VALORIZATION OF ALL ITS RESOURCES

Download the diagram

TO PARTICIPATE IN THE DEVELOPMENT AND GROWTH OF RESPONSIBLE SECTORS

Avril’s DNA is to place its know-how at the service of structuring agricultural production according to a sectoral model by helping its partners to improve their response to demands from society. Having contributed to relaunching non-GM soybean production in France, Avril is now involved in structuring the sector. The aim is to valorize the production of 100% French soybean in local sectors. In Maghreb countries, Avril and Lesieur Cristal have successfully contributed to the creation of rapeseed, sunflower and olive sectors in Morocco, and rapeseed in Tunisia, by involving upstream agriculture and supporting local partners. Using the same model, the Group aims to structure an olive oil sector in Italy and around the Mediterranean basin. 

Through its commitment to valorizing the French Farm, Avril also plays a structuring role in national livestock sectors. Through Avril’s Livestock Sectors Business Line, and working in close collaboration with its 26,000 partner livestock farmers, Sanders has supported their personal projects regarding their installation or conversion to other management methods. Secondly, through its investment activities, Sofiprotéol subscribed in 2018 to an increase in capital of the LDC Group (brands such as Loué, Le Gaulois, Maitre Coq, etc.) to a value of €30 million, its aim being to become involved with a major French actor very close to Avril’s sectors.

TO OFFER PRODUCTS AND SERVICES WHICH MEET DEMANDS FOR QUALITY AND SUSTAINABILITY

As a responsible actor in the agrifood industry, Avril guarantees the excellent health safety, traceability and quality of its products. All its food processing units have obtained ISO 22000 or OQUALIM-RCNA* certification. However, the Group goes even further and strives to propose foods that will meet new demands from consumers for local, red label or organic products, etc. This trend requires the development of livestock sectors of excellence with partners both upstream and downstream so that they can offer meat of French origin that is free of antibiotics, organic or produced under short channel conditions, such as Canard du Périgord (duck) or the Cochon des Halles brand from PorcGros. On its side, Matines has undertaken to offer 100% alternative eggs (from hens reared in barns, open range or under organic conditions) between now and 2025.  And because the good health and welfare of animals are prerequisites for the quality of food products, Avril supports its partner livestock farmers in the sustainable health management of their farms. In its different plant sectors, Avril proposes a broad range of sustainable innovations, such as non-GM sunflower lecithin, biosourced additives for resins to be used in wood-based panels, and organic, unfiltered or 100% Italian olive oil from Costa d'Oro.    * Certification standards for Animal feed plants

TO PROTECT THE PLANET AND ITS RESOURCES

Avril is a responsible industrial actor committed to improving its environmental balance and creating new energies that can contribute to sustainable mobility in the future. To reduce its footprint, the Group has focused its efforts on developing biomass boilers. The boilers in six production facilities now prevent the emission of 130 kt of CO2 per year. In partnership with E.ON, Oleon invested in a new combined heat and power plant in Ertvelde (Belgium) which produces all heat for its site in the form of high-pressure steam. By 2018, it had already generated a reduction in GG emissions equivalent to the energy used by more than 2,000 households in a year.

Avril is thus contributing to mitigating climate change as an actor in energy transition; through circular economy, with Terrial and Adonial; through innovations such as Oleo100, the first 100% plant-based fuel made using French rapeseed, which can completely replace diesel; through its close local ties with upstream agriculture it is encouraging farming practices that can markedly reduce GG emissions, such as no-till methods and the introduction of livestock and organic wastes, thus restoring to agriculture its role as a carbon sink.

A CIRULAR ECONOMY LOGIC

The Group is promoting a circular economy through its subsidiaries Adonial and Terrial. The former processes by-products and production rejects from the agrifood industry, transforming them into ingredients for livestock feeds. In 2018, Adonial processed near 27 kt. Terrial on its side, recycles livestock waste and organic wastes generated by industrial activities into compost or methane to produce fertilizers and renewable energy, with near 284 kt produced in 2018. In 2019, Terrial becomes a leader in organic fertilizers in France as Suez became a stakeholder, contributing its compost activities (see press reslease). The new joint enterprise aims to offer a broader range of fertilizing products throughout France for farmers who are seeking to reduce their use of chemical and artificial inputs; organic farmers of course, but also market gardeners, wine growers and arable farmers.  

In the same spirit, since May 2019, three of Lesieur’s products have been present on the e-commerce platform Loop (see video). Developed by TerraCycle, this enables consumers to order everyday products that are delivered to their homes in returnable packaging. The packaging of Lesieur’s organic mayonnaise, Puget’s organic olive oil and organic ISIO4 oil is thus retrieved, washed and reused. This circular project aims to reduce the use of single-use packaging and forms part of Lesieur’s strategy with respect to responsible packaging management.

CULTIVATING OUR VALUES SO WE WORK BETTER TOGETHER

In 2018, Avril implemented several initiatives to enhance its collective dynamic while enabling all employees to develop their skills and look to the future. Building a Group where all skills work in synergy requires a shared culture and common values. The opening of the Avril Campus in Bruz near Rennes is thus a strong symbol, because on a single site it has brought together several activities that were previously dispersed. Beyond this geographical grouping, sharing was a key feature of the year. Avril initiated collaborative efforts around its vision of Cultivating the Future which is continuing in 2019: first through the Comex for Young People and then with all colleagues. The objective is to enable the Group’s 7,490 employees to share its vision while enriching their everyday experiences. 

Another way to federate teams is to consolidate a common managerial culture. This requires training opportunities and these are growing from year to year; for example, 2018 saw a course on leadership for top managers. At the level of individual development, a new interview should help each employee to reflect on his or her future within the organization: the Career Development Conversation. For the fourth consecutive year, Avril is deploying an employee share ownership plan; in 2018 participation reached 40%*, a sign of trust in the future. And finally, in 2019, the Group will be carrying out its third in-house opinion survey entitled “And how is it for you?”

* 1831 employees among those eligible

ACTIONS FOR THE INTEGRATION OF PEOPLE WITH DISABILITIES

A momentum in favor of the integration of people with disabilities was initiated in 2012, with the goal to exceed the regulatory threshold of 6% in each of the Group subsidiaries by 2020.  Actions to raise awareness among the Group’s employees, supported by the Chief Executive Office, were launched, notably with the circulation of a guide for all the employees.  Some subsidiaries implemented more specific actions: Saipol, which employs 600 people, worked with the AGEFIPH (French agency promoting the employment of disabled people) to conduct a diagnosis in order to formalize its disability policy.  Training sessions for managers were held in 2018, as well actions among the employees to raise awareness about disability in the workplace thanks to cooking workshops organized by Kialatok, an entreprise dedicated to professional integration (a hundred Saipol and Lesieur employees participated in 2018). More and more subsidiaries of the Group lead awareness campaigns. For example, the companies of the activity "Avril Animal Specialities" have regularly engaged in actions such as the initiative "One day, one job", which consists in integrating a worker with disabilities in one of their departments during a whole day. On its side, Adonial started a collaboration with an actor from the sheltered sector (ESAT) of Château-Gontier by the means of contracts enabling the ESAT employees to work within the company. Eight workers with disabilities and a instructor has joined the Adonial team since January 1st 2019. In 2018, 38% of the Group French subsidiaries employed more than 6% of disabled workers.

A COMMITMENT TO OUR STAKEHOLDERS

Avril’s regional roots are a specific feature of its DNA. They are inherent to the close relations that bind the Group with its partners in upstream agriculture – 110,000 farmers and 26,000 livestock breeders – and its 84 locally-based production sites. Avril’s different entities develop initiatives that make them partners in local life. To celebrate its 90th birthday, Abera organized a series of events that ranged from a drawing competition to a football tournament for children in Coglais (Ille-et-Vilaine). Oleon organized numerous projects in favor of local communities, such as the initiative shared with its customer, Christeyns, to offer care products to underprivileged people, or with EPIC Homes to help build houses for indigenous families in Malaysia - Selangor region - (see video). Avril also seeks to increase local awareness of its model; for example by organizing visits to its industrial sites. 

The Group also draws on the expertise of an NGO to progress its sustainable development policies. Supported since 2016 by the Earthworm Foundation, in 2018 Avril achieved almost 100% traceability for its palm oil purchasing and in 2019 is supporting a local initiative in Indonesia designed to put an end to deforestation while at the same time enabling viable agricultural production. Avril also signed a partnership with CIWF which is supporting the Group in its progress initiative on animal welfare. More generally, the Group wishes to involve increasing numbers of its stakeholders in its thinking and actions.  A committee will be created for this purpose in 2019.

OPENING UP TO THE WORLD OF EDUCATION

Since 2016, Avril has been a partner in the Professeurs en Entreprise (Teachers in Companies) project organized by the Fondation C.Génial. In November 2018, eight industrial sites opened their doors to 80 teachers, most of them working in technical and vocational sectors. The aim was to improve their knowledge of jobs in the agri-food and agribusiness sectors so that their teaching and career advice could be based on their practical experience. In a 4-year period, 21 visits were organized on 14 industrial sites of the Avril group, enabling 212 teachers to discover Avril's activities, along with the curriculum and diversity of jobs performed by the employees.

As for Expur,  this Avril's Romanian subsidiary is parter in "Capital Filles" (Women as Assets), an association that enables secondary school students from difficult backgrounds to receive support from female employees at the Slobodzia site in discovering their activities and developing their own career plans. This program allows young girls to boost their self-confidence, and enables employees to valorize their profession and experiences. In Lesieur Cristal, ten executives have become Volunteer Consellor of Injaz Al-Maghrib dedicate time to help students of middle and high school and college to create their own Junior Entreprises and to understand the mechanisms of the market and work places. More generally, Avril pursue an active policy regarding the integration of young people in apprenticeship trainings, aiming at 8% of interns and apprentices within the average number of staff by 2023.

2018, A RECOVERY YEAR FOR THE GROUP

The Group ended the year with an EBITDA at €154 million (26% higher than the goal) and achieved recovery, notably in its core activity (grain processing and biodiesel production).  Although some doubts persist, the regulatory landscape is becoming clearer. Europe has confirmed a long-term future for the biofuel market until 2030, with an incorporation rate stabilized at 7%. Some European countries made up for their delays in incorporating biodiesel as soon as the second half of 2018, causing a marked rise in demand. Europe has also declared its aim to place a ceiling on high-emitting biofuels and put an end to unfair competition from Argentine soybean esters by fixing a quota and minimum price.

All Avril’s Business Lines achieved their financial goals, or more After a difficult year for Lesieur in France, 2019 is seeing benefits for its table oil activities from a repositioning of its Puget and ISIO4 brands and the launch in French supermarkets of the Italian olive oil brand Costa d'Oro, recently acquired by the Group. In terms of specialties, the downturn in the performance of oleochemicals, impacted at the end of the year by the European economic slowdown, was offset by the international dynamism of animal specialties. Animal nutrition and livestock products, now combined within the Livestock Sectors Business Line, remained under pressure but ended 2018 in a positive position, driven by the performance of the pork branch. Matines, currently in its transition towards alternative eggs, should see growth and profitability once again in 2020.  On its side, Avril’s finance and development company, Sofiprotéol, almost doubled its commitments in 2018 and has confidence in a successful 2019 through its excellent portfolio of investments.

SALES & ACQUISITIONS 

In 2018, Avril announced its sale of Sopral, one of the companies in its incubator, Avril Développement. To enable this expert in nutrition for dogs, cats and horses to accelerate its penetration of international markets, Sopral was sold to Parquest Capital. However, Avril retains a minority holding in Sopral through Sofiprotéol, so that it can continue to provide support. Avril also signed an alliance with the Sabatini and Santirosi families who founded the Italian olive oil brand Costa d'Oro; this has resulted in the birth of the third largest olive oil brand in the world. To achieve this operation, Avril received support from the Castel Group, its historic partner in the structuring of oilseed sectors in Africa. 

FINANCIER

EXTRA-FINANCIAL PERFORMANCE GAINING IN MATURITY AND TRANSPARENCY

The Group’s progress in terms of CSR has been shared between the different stakeholders – shareholders, customers and NGOs – with which Avril is in regular contact. Avril’s Communication on Progress (COP) report, compiled in the context of its membership of the Global Compact, was indeed qualified as “Advanced”, the highest level possible. In 2019, Avril will be publishing its first statement on extra-financial performance (SEFP) in compliance with the new regulations.  Similarly, Oleon has launched a campaign to evaluate its suppliers, in partnership with the EcoVadis rating agency.   

CSR policies are progressing and becoming more refined The sustainable palm policy was updated in 2018; the level of supply traceability to the mills reached almost 100%, with a slight downturn compared to 2017 because a new subsidiary joined the Group. In 2019, Avril will be involved in transformative field actions in Indonesia by supporting a program on the preservation of natural habitats driven by the NGO Earthworm.  Regarding the major issue of animal welfare, Avril is sustaining its responsible change dynamic based on its partnership with the NGO CIWF which provides support in its discussions and actions to target the Group’s partner livestock farmers. In terms of energy performance, Avril progressed in 2018 with more sites obtaining ISO 50001 certification; this now brings the total to 34, or 40% of the Group’s industrial sites. Finally, the Avril Campus which opened in Bruz in December 2018 is strongly symbolic of the attention paid by Avril to its employees and its ambition to create more synergies between its activities. 

EXTRA-FINANCIAL

PILLAR 1 – OUR VALUE CHAINS

PILLAR 2 – OUR PRODUCTS & SERVICES

PILLAR 3 – OUR PLANET

PILLAR 4 – OUR PEOPLE

PILLAR 5 – OUR STAKEHOLDERS

Download the tables

SELECTED FINANCIAL DATA

INDUSTRIAL PRODUCTION

COMMITMENTS OF THE FINANCE AND DEVELOPMENT COMPANY

Download the tables