Greenyard has announced its Transformation Plan. This is in response to ongoing market pressure and their massive burden of debt. The Transformation Plan consists of three parts: selling factories, scrapping 422 jobs, and getting rid of their vegetable preservation department.
Attracting extra capital
With this plan, Greenyard wants to reduce its debt ratio. At the moment it is five to six times their gross profit (EBITDA). They want to cut this number to three. In this way, Greenyard intends to raise its REBITDA to between EUR60 and 65 million. This must be achieved within three years. Greenyard has also appointed the merchant bank, Lazard, to help find an investor. This is in order to attract additional capital.
These measures should lead to an improvement in the underlying EUR20 million operational result in this dismal financial year. These measures should improve these figures by EUR44 million in the next year. This means that, within two years, the total operational result could increase to EUR100 million.
In the fresh fruit and vegetable division - Fresh - 422 positions will be scapped. Most of these will be in Germany and the United Kingdom. However, some job losses will occur in Belguim and the Netherlands too. These will be in all levels of the company. To start things off, Carl Peeters, who is the Operational Director, will be let go in May already. Greenyard is looking into the possibility of relocating the affected personnel elsewhere in the company.
Prepared division to be sold
At the same time, Greenyard will sell its fruit and vegetable cannery, Prepared. This is in order to further reduce its debt. BNP Paribas Foritis and KBV Securities will try and find possible buyers for this division. This department has three large factories. Two are in Bree and Rijkevorsel in Belgium; the third is in Velden, the Netherlands.
The company's two CEOs, Hein Deprez and Marc Zwaaneveld, also announced that the business' frozen goods factories will also be put up for sale. This is because the company wants to 'optimize, rationalize, and consolidate' its size and organizational structure. Their Hungarian factory is already on this list. It does not contribute enough to Greenyard's EDITDA. By selling such 'non-essential branches' this fruit and vegetable giant hoped to generate EUR50 to EUR75 million.
Hein Deprez, co-CEO's reaction:
“Last year's extremely dry summer and recall action, but also, mostly, the continued market pressure demanded we make important decisions. After years of intensive growth, Greenyard now has to consolidate its strength and size. We have to forge closer bonds with our clients."
"We want to remain a strong, efficient partner for the retail sector. Even become stronger than we are today. We want to be a partner that is ready to face the future, together with its clients. Now, with these initiatives we have already made great progress toward this."
“Unfortunately, this also means a transformation of the organization. We are convinced that these measures are needed for a healthy future for Greenyard, its employees, clients, suppliers, as well as its shareholders."
Marc Zwaaneveld, co-CEO's reaction:
“We believe Greenyard has a bright future ahead of it. By ensuring strict implementation of the Transformation Plan, we can exploit our large, untapped potential. This will vastly improve our efficiency and profitability."
"Moreover, our analysis of the renewed organization of the company's various divisions, ensures we can deliver our clients the same quality of service they are used to. At the same time, we will optimize Greenyard. This will be done by divesting assets that are no longer essential and by improving our cost structure."