Greenyard Logs Solid Growth; Frozen France ‘Normalizing’

A "significant increase" in first-half profits has been reported by Sint-Katelijne-Waver, Belgium-headquartered Greenyard (which formerly conducted business as Greenyard Foods, and trades as GREEN on the Euronext Brussels stock exchange). Sales of more than EUR 2.1 billion were up 8.6% year-on-year for the six-month period ending on September 30, 2016, while net profit of EUR 6.8 million translated to earning per share of 15-cents.

"We continue to focus on our strategic priorities to drive profitable growth. As evidenced by the smooth integration of Lutèce with synergies continuing to come in. The expansion in Lipno, Poland, became operational this summer and supports our operational excellence program in Frozen,” said Marleen Vaesen, chief executive officer.

Marleen Vaesen Greenyard CEOMarleen Vaesen

The ceo announced that a new facility is scheduled to open in the United States next year. While not providing details about the expansion, she commented: “This is illustrative for our ambitions in the growth markets.”

Vaesen added: “Finally, the operations in Frozen France are normalizing. We continue to strengthen the corporate culture under our new name ‘Greenyard,’ a powerful umbrella for the future.”

Highlights of first-half results were reported as follows:

  • Fresh segment sales grew by 6.9% mainly due to growth in the German, Dutch and Polish markets. Both pricing and volumes continued to contribute positively, with ongoing strong product mix driven by strong demand in exotics and ready-to-eat and mixes. The growth markets for Fresh (UK, France, and USA) grew in line with the segment’s internal sales growth.
  • Long Fresh segment sales (which were previously posted under Prepared segment receipts generated from frozen products packed by Pinguin manufacturing units and Noliko canned items) were up 19.6%, supported by solid internal sales growth (4.1%) and incorporation of the Lutèce mushroom processing operation (18.2%). Internal growth was driven by volume growth, pricing and an improved price/mix. The latter was particularly present in the frozen segment, showing that the company’s persistent efforts to improve its portfolio are paying off. Nevertheless, overall market conditions remain challenging – especially the pricing environment in the prepared sector.
  • Horticulture sales were slightly down (-2.5%) due to a planned product discontinuation.

Net Debt

Greenyard PhotoNet debt as of September 30, 2016, amounted to EUR 379 million, which implies a year-on-year drop of EUR 36.5 million, or 8.8%. As a consequence, net debt/REBITDA fell to 2.7x vs. 3.1x in September 30, 2015 . This drop is regarded as “a strong achievement in view of the ongoing investments throughout the group and the acquisition of Lutèce.

Outlook Statement

Looking ahead, Greenyard’s board of directors and management stated: “After a solid start of the year, the company continues to be well positioned to deliver profitable growth and to unlock the synergy potential going forward of the business combination.”