"In the first half year of AY 19/20, Greenyard’s recovery proved to be faster and stronger than expected, demonstrated by a significant increase of operational results. Therefore, it obviates the need to raise capital or to continue to investigate the sale of Greenyard’s Belgian Prepared activities, thereby respectively avoiding shareholder dilution and safeguarding Prepared’s operational cash flows in the company. Greenyard’s relationship banks confirm their belief in a stand-alone recovery by extending the waiver period and providing the necessary flexibility to implement its Transformation Plan."
Successful start of the recovery leading to significantly improved performance
"Thanks to a clear focus on margin improvement and cash, Greenyard’s financial results are showing encouraging signs of recovery. This recovery is the result of the optimisation of the sales portfolio, strongly influenced by the stringent execution of the Transformation Plan.
The Transformation Plan consists of immediate, short- and longer-term actions, with a revitalisation of volumes and margins, the rationalisation of the Group’s footprint, an improved cost management and operational excellence as cornerstones. The Plan would potentially impact 422 jobs and was expected to deliver an adjusted EBITDA improvement of € 20,0m for AY 19/20. During the first half year, 334 persons have left the Group, and Greenyard has outperformed its half year transformation target.
The result is a regained stability in the Group’s net sales of € 1.968,9m versus € 1.979,7m in H1 last year (-0,5%), and a significant margin improvement resulting in an adjusted EBITDA (pre-IFRS 16) of € 47,6m versus € 41,2m for the same period last year (+15,7%) and even doubling versus the € 23,3m adjusted EBITDA of the second half of the previous financial year.
In addition to the above, Greenyard has announced to expect to yield cash proceeds in a range of € 50 to 75m from further divestments of non-core assets over the different segments, with limited loss of adjusted EBITDA. In the meantime, Greenyard has completed three planned divestments of its list of non-core divestments: its Frozen plant in Baja, Hungary, its UK Flowers business and its Fresh distribution centre in Freiburg, Germany. These assets were identified as no longer being in the focus of the Group, or no longer yielding the required returns. For these divestments, Greenyard has been able to generate the proceeds that were expected in the Transformation Plan and which reflect the market value of these assets.
Several partnerships have been realised in the first half of the financial year as announced in previous press releases. These new partnerships are expected to gradually secure additional sales and decrease margin volatility going forward. They constitute the next step in building close and integrated customer relationships; with a full offering in fruit, vegetables and related services."
Stand-alone recovery
"Due to the continuing and faster than anticipated recovery during H1, sharp focus on the Transformation Plan, combined with the expected positive effects of the new partnerships, are expected to enable Greenyard to further deleverage on its own strength with its current portfolio combining Fresh, Frozen and Prepared activities. This organic recovery obviates the need for a capital increase or sale of the Belgian Prepared activities.
The stand-alone alternative, without capital increase and without sale of the Belgian Prepared activities, is the preferred option as it avoids dilution for Greenyard’s existing shareholders and allows Greenyard to preserve and use the full positive cash generation of its entire portfolio of activities for the further deleveraging of the Group.
Greenyard has reached an agreement with its relationship banks. The main elements are: (i) the extension of the waiver period until the refinancing moment in December 2021, (ii) the confirmation of their trust in management to further deliver the Transformation Plan and (iii) a normalisation of costs related to its facilities."
Hein Deprez, co-CEO Greenyard comments: “Greenyard and our colleagues have shown great resilience and fought back hard. We were able to secure new partnerships with our customers, solidifying our customers’ trust, but also leading the way in changing the traditional way of working in our sector. These partnerships demonstrate that it is possible to work closely together with our customers with a joint focus on the consumer and on sustainability, while at the same time creating value for all stakeholders in the value chain.”
Marc Zwaaneveld, co-CEO Greenyard continues: “The stringent execution of our Transformation Plan, on top of these new partnerships, emphasises the importance we attach to becoming a financially healthy company again. We continue to drive this continuous improvement and transformation process while embedding it in a dynamic and transparent company culture. The Transformation Plan not only entails a cultural change, but it is also fostered by the combination of years of experience, industry knowledge and external new insights. This leads to an improved way of working, enhancing both the quality towards our customers and our internal quality. This will prove to be the stepping stone for Greenyard to take a leading role in the industry. However, we are not there yet. We are still in the midst of our transformation period. A transformation is naturally associated with variability and uncertainty, particularly in the initial phases of transformational periods. Nevertheless, even in this transformational period, we are confident that we can increasingly bolster our Group for the future and will do this gradually over the upcoming periods. We keep working diligently in pursuit of continuous improvements and stable partnerships, revitalising Greenyard while doing so.”
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