Greenyard Foods Group Sales Up 2%, REBIDTA Soars 22%

Gent, Belgium-headquartered Greenyard Foods, a producer of frozen and canned vegetable, fruit and ready-to-eat food products, has reported strong operational results for the fiscal year ending on March 31, 2015. Consolidated sales growth increased to €635.4 million, while recurring earnings before interest, taxes, depreciation and amortization (REBITDA) rose by €11.1 million to €62.6 million. The net result was an increase from -€3.5 million to +€10.8 million, as equity rose to €221.8 million.

“Group sales grew by 2%, while REBITDA surged 22%,” said CEO Marleen Vaesen. “Greenyard Foods has completed its strategic plan to acquire all production facilities, and continues to optimize its international excellence program while realizing efficiency improvements. These results demonstrate that the company is following the right strategy. The expected business combination with Univeg and Peatinvest is the next step in our long term strategic development.”

A breakdown of the Group’s performance follows:

Sales
NolikoThe increase in consolidated sales compared to previous accounting year (+2.0%) reflects the combined effect of a slight increase of +1.1% in the frozen division (Pinguin) and a solid increase of +3.7% in the canning division (Noliko). Exchange rate evolutions had a positive effect on the consolidated sales of 1.3%.

Operating Result
Consolidated REBITDA grew by €11.1 million (+21.6%) compared to the previous year. Approximately €5.9 million of this increase was due to commercial and operational results in both divisions following better operational efficiencies and a stronger focus on portfolio mix. Ending the rent of production facilities following their acquisition had an impact of €5.2 million on REBITDA.

Consolidated REBIT advanced by €4.3 million year on year. This increase can be nearly entirely explained by commercial and operational results both in the frozen and canning divisions.

Non-recurring Elements
Pinguin logoThe consolidated non-recurring charges amounted to €2.3 million, of which €1.4 million was due to the deconsolidation of assets located in Manschnow, Germany, and at Pinguin Aquitaine, France. The consolidated results of the previous year mainly included a €65.3 million gain realized on the sale of the potato division.

Financial Result
The consolidated net financial result improved by €9.8 million from -€16.7 million to -€6.9 million. This can be mainly explained by unrealized positive exchange results (mainly on GBP) of €9.5 million.

Taxes
The consolidated tax cost over the year amounted to -€9.9 million, or a tax rate of 47.9%. This consists of -€9.1 million in income taxes and -€0.8 million in deferred taxes without cash impact. The tax rate of 47.9% was mainly due to profits that could not be offset against tax losses carried forward.

Year on Year Comparisons
The €17.3 million rise of tangible fixed assets by can be explained by the impact of the acquired production facility in King’s Lynn, UK, during July of 2014 (+€19.8 million) and the other investments of the accounting period (+€31.0 million). This increase was partially compensated by depreciation charges (-€29.3 million), positive foreign exchange rate fluctuations (+€4.0 million) and the remaining combined impact of transfers, capital grants, disposals (-€8.2 million).

g 2Inventories increased by €9.1 million compared to March 31, 2014, of which €12.4 million was in the frozen division while the canning division posted a decrease of -€3.3 million.

Equity (including non-controlling interests) amounted to €221.8 million, or 35.2% of the financial position statement total as per March 31, 2015. This increased by €9.9 million, which was mainly due to the realized net results over the year.

The financial debt increased by €14.5 million compared to end of March of 2014, primarily as a result of increases in working capital financing.

Performance by Division
The frozen division accounted for 65.2% of consolidated turnover. The sales increase of 1.1% was the combined effect of a volume decrease (-2.6%), a positive portfolio mix effect (+1.8%) and a positive exchange rate effect (+1.9%) mainly related to the British pound. Sales were impacted for eight months by an embargo imposed by Russia, which became effective in August of 2014. Thus Russia represented 1.7% of the sales of the frozen division, compared to 3.6% last year.

Approximately €3.3 million of the REBITDA increase of €7.5 million in the frozen division was attributed to commercial and operational results. These consist of efficiency improvements and focus on portfolio mix. The termination of rents previously paid for production facilities had a positive impact of €3.7 million on REBITDA, while €0.5 million came from the exchange rate differences of the British pound.

The REBIT growth of €2.6 million can mainly be explained by the commercial and operational results of the division.

g 5The canning division accounted for 34.8% of the consolidated sales, which increased by +3.7% compared to previous year.

REBITDA increased by €3.7 million, of which €2.2 million was mainly due to commercial results, and to a lesser extent attributed to operational efficiencies. Termination of the rent following the acquisition of the production facilities had a positive impact on REBITDA of €1.5 million.

The REBIT growth of €1.7 million can almost entirely be explained by the commercial and operational results of the division.

Outlook
Looking ahead, the company’s board of directors and management team believe that the foundations are in place for further profitable growth. The intended business combination with Univeg and Peatinvest is designed to allow Greenyard Foods to become a global market leader in both the fresh and prepared vegetables and fruit sectors. Completion of the transaction is targeted for the summer of 2015.