Greenyard Foods Reports Stable Sales Despite Challenges
Greenyard Foods posted a “solid performance” in the fiscal year which ended on March 31, according to Marleen Vaesen, chief executive officer of the Sint-Katelijne-Waver, Belgium-headquartered company, whose holdings include the Pinguin frozen products operation. Turnover during the period totaled €3,976.3 million, down 1.1% compared to the previous year.
“We managed to deliver stable sales, despite the discontinuation of a key customer in Fresh, representing over €300 million in turnover. REBITDA was down by 5.5%, mainly driven by Prepared due to the ERP implementation issues in France and price pressure,” she said. “Encouragingly, there was a recovery in Prepared in the second half. The solid performances in Fresh and Horticulture have been in line with expectations, helping to strengthen the overall results.”
The results reflect the first full year of operations since the incorporation of Univeg (Fresh) and Peatinvest (Horticulture) into Greenyard Foods on June 19, 2015. Integration of the corporate teams has been completed, financial reporting is aligned, and key strategic priorities and initiatives have been identified, said Vaesen.
The company detailed past year results in its each market as follows:
Sales of €3,248.8 million were flat, notwithstanding the loss of a large German client. Solid growth took place among the existing client base in the core markets, and sales in the United Kingdom, France and he USA resulted in an 11% sales increase in turnover. Throughout the year, new investments were made which are expected to drive further growth and profitability in the future.
Pricing was generally healthy in Europe and the product mix continues to be positively impacted by strong demand for exotic products, ready-to-eat items and mixes.
Divestments of The Fruit Farm Group and other farming operations impacted the top line negatively by -2.1%, whereas FX was slightly positive at +0.6%.
REBITDA was relatively flat (-0.5%) at €75.4 million. The Fresh segment almost fully compensated the margin drop resulting from the discontinuation of a German customer within 12 months’ time. This was achieved thanks to a very strong performance at the existing client base, combined with restoring profitability of underperforming activities.
After a drop of 7.4% during the first half of the fiscal year, REBITDA was up more than 9% in the second half.
Turnover in the Prepared segment, much of which was generated by frozen vegetable sales, rose 1.7% to €646.1 million. On a full year basis, organic sales growth was up 0.7% and FX contributed 1.0% to top line growth as well. Market conditions in Prepared remained challenging in Europe, also in the second half. However, volume growth and continued efficiency efforts with a lean focus and improvement in product mix were partially able to compensate ongoing price pressure in the market.
REBITDA dropped by 13.9% year-on-year due to temporary operational transition issues following ERP implementation in France and price pressure. However, gradually REBITDA evolution benefited from prior-year investments to improve operational efficiencies and the phasing. As a result, a 9.4% increase was realized in the second half, resulting in a € 2.1 million surge in REBITDA. This firm growth mitigated the fiscal year decline to 13.9%, an improvement compared to the 27.4% decrease reported in the first half.
The issues associated with the ERP transition in France were the driver for the overall decrease in the Prepared segment, with an impact over the fiscal year of € -8.0 million. Various recovery and improvement initiatives have been implemented. Operational efficiencies more than doubled their impact towards € +4.1 million (vs. € +1.9 million in the first half).
Horticulture business turnover of €72.4 million reflected a solid growth rate of 9.2%, in line with first half growth of 10.5%. The gain was the result of ongoing solid organic sales growth driven by innovative products (+4%) combined with new anti-cyclical winter products, launched in August, which added 5% to top line. REBITDA improved by 9.2%.