Greenyard's revenue for the first nine months of the financial year is disappointing. This was expected, as announced on 28 January. The company's EUR2,9 billion turnover has decreased by 4,2% compared to the same period a year earlier.
This decline is also a more significant drop than the -3,6% of the first half of the year. Greenyard blames this loss of revenue on the disappointing results of their Fresh segment. In this division, retail competition is reflected in the figures.
Fresh sales totalled EUR927,9 million in the third quarter. This is 5,4% lower than at the same time the previous year. The exchange rate had no material impact at group level.
Avocados could not make up for loss of revenue
The Fresh segment, in particular, has lower sales figures. With a result of EUR730,2 million, turnover was 6,6% lower than the previous year's third quarter. Then, EUR782 million in revenue was booked.
In the first nine months of the year, revenue was also lower. It was EUR2,378 billion versus the EUR2,489 billion a year ago. This is a drop of 4,5%.
There is a twofold reason for this decrease in earnings. On the one hand, the sold volume of a large number of products fell. On the other, lower prices were reported.
"This decrease is thanks to a drop in volume and continual pressure on prices. This pressure was created by competition in most of Fresh's most important markets in the retail sector," reads a press statement released by Greenyard.
"The decline in volume was mainly in the case of bananas, apples, grapes, pears, melons and stone fruit. Bell peppers and tomatoes were also affected. This is in contrast to avocados' growing sales volume."
"In general, the price setting in most product categories showed a negative trend. This negative volume trend is continuing in, especially, Germany and Belgium. This is happening in combination with lower prices," the press release continues.
Long Fresh has a flat performance
The Long Fresh division noted a slight 0,4% decrease in sales. Their turnover fell from EUR198,5 million last year to EUR197,8 million this year. This is for the third quarter of the fiscal year. This means the decrease of 4,1% reported over the first half of the year was partially recouped.
In the first nine months of the book year, revenue dropped by 2,8%. “This flat Q3 performance can be attributed to the unrealized price increases. There were also some postponed orders in the Prepared segment," the press statement says.
"There were a few sales contract delays in the Frozen department. This was after the recall that occurred in the summer. Combined with this, the French private labels performed weaker. This led to a lower turnover, for which a better price/mix only partially compensated."
The troubled company had to issue a warning at the end of last month already. They warned that the results would be lower than expected. This resulted in a sharp drop in price on the stock exchange.
Greenyard also exceeded the debt ratio agreed upon with the banks. This happened in September 2018 too. At that time, the company sold its Horticulture branch in an attempt to reduce its mountain of debt.
The financial year's expected REBITDA is sitting at between EUR60 and EUR65 million. This is in line with the previously annouced figures. This means the REBITDA has been halved when compared to the 2017/2018 book year. Then, EUR140,2 million was booked for this item. This was a mere four percent decrease from the previous fiscal year.
Due to these disappointing results, a transformation of the company has been set in motion. In mid-March, Greenyard will provide an update of these plans and their implementation.
