Vegetables & Fruits

Profitability Improves, Leverage Ratio Decreases for Greenyard

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Sint-Katelijne-Waver, Belgium-headquartered Greenyard on November 17 announced a 10.3% improvement in sales and adjusted EBITDA (18.9%) has been achieved in the first half of the 2020/21 financial year. The producer and marketer of fresh, frozen and canned fruit and vegetables reported that it is returning to a positive net result and is on track to meet its adjusted EBITDA outlook (€106 million to €110 million).

Adjusted EBITDA margin has grown to 2.6% mainly, but not exclusively, through higher efficiency and investing in added value services.

The leverage ratio dropped below 4.0x six months earlier than anticipated, down from 7.2x in the previous year. Based on current information and forecasts, Greenyard estimates that the leverage ratio will be around 3.7x by the end of the 2020/21 financial year, be close to 3.0x by the end of the subsequent financial year and evolve permanently below 3.0x thereafter.

Greenyard’s syndicated loan facility and convertible bond both mature in December 2021, and the company aims to refinance its debt before the end of the current financial year.

In the frozen segment of the business, identified as “Long Fresh” in the company’s report, sales increased by €24.1 million (6.8%) in the first half of the financial year – up from €356,3 million to €380. 4 million. Despite the temporary drop in sales to foodservice customers, who were hit hard when out-of-home consumption ground to a halt in the second quarter of the calendar year due to the Covid-19 pandemic, the sector continues its steady growth. Meanwhile, the volume dip has been offset by increased sales to retail customers.

 Hein Deprez

Commenting on the overall market situation, Co-CEO Hein Deprez remarked: “Greenyard is demonstrating that its strategy of long term, sustainable and stable relationships in the value chain of both segments works. This strategy ensures balance and certainty across the entire value chain. It reinforces the trust placed in growing together with the customer, even in uncertain times. For growers too, we will accelerate our investment, with the same level of intensity and integration, in professional, innovative and integrative collaborations, ultimately leading to a further shortening of the supply chain. At group level, we are therefore taking the next steps in group sourcing.”

Marc Zwaaneveld

Fellow Co-CEO Marc Zwaaneveld added: “The objective to deepen our close collaboration in the value chain with customers and growers demonstrates our clear determination to add value to improve the entire supply chain in terms of availability, quality and cost. It forces us to adapt our organization every day, making it better, more efficient and more sustainable, growing with every step. It is already leading to a significant shift towards more stable and higher volumes and margins, partly through more added value services, but also through structural process transformation, for example in sourcing and transport. Above all, we are accelerating our sustainability ambitions, with four concrete commitments and laying the foundation for strong and stable growth over the next years.”