Greenyard outperformed the market regarding fruit and vegetables, thus increasing its market share. That is what the company's annual report states. "Despite an overall reduction in consumption (-10%), volumes at Greenyard fell by only 0.8%, while prices increased by 8.5%," begins co-CEO Marc Zwaaneveld. Annual sales increased by 7.9% to €4,638 billion. That positive result means Greenyard could resume paying shareholder dividends.
Marc says the business owes its stronger relative position primarily to integrated customer relations and complementary divisions. That led to its operating income being 0.5% higher - €167.3 million - than the previous year. The company's financial debt decreased by almost 9% in the past fiscal year to €277.3 million, further lowering its debt ratio from 2.4 to 2.2.
"Profits, however, did decline. Those were €16.9 million the previous year, while this fiscal year's net income is €9.3 million. "That's mainly due to further reorganizations to strengthen the Fresh business model towards the future. As part of this, the Fresh UK wind-down is nearing completion," explains Marc.
Stonger relative position
Marc is not concerned about people eating less fruit and vegetables. "I think they incorrectly perceive fruit and vegetables as incredibly expensive. Those products have generally become less expensive than most unhealthy ones. Also, despite the downturn, we've held up well, with comparable volumes to the previous financial year, indicating that when inflation stabilizes again, we'll benefit from our relatively improved market position."
Greenyard also announced that it would again be paying its shareholders dividends. "We'll present the proposal to resume a dividend policy at the shareholders' annual general meeting on September 15, 2023. That will start with a €0.10 per share dividend payment for the full financial year ending March 2023," Marc states.
Integrated customer relations
He considers Greenyard's integrated customer relations a major catalyst for the company's performance. Earlier this week, it announced that its German branch had taken the first steps toward a customized, integrated client relationship with German retailer Dohle Trading Group. In the coming months, this unique model will be further fine-tuned into a fully customized solution for Dohle HIT, which will be up and running by the end of the summer.
"This special model is increasingly attracting third-party interest. It differs per customer, but the rationale behind it stays the same. There is still too much spread-out trading which puts prices under pressure. Then the entire chain comes under pressure, and nobody earns anything anymore. I think we've proven with this model that if you're willing to genuinely cooperate, everyone can earn an honest living. It also means constantly contacting your partners, allowing you to predict and respond well to product availability."
And these days, that availability is becoming an increasingly thorny issue. At Greenyard, too. "Our international footprint gives us the advantage of not being tied to specific regions. If a product is unavailable somewhere, we look to other areas. We can, thus, guarantee availability. Still, we'll have to accept, in the future, less product will be available in some periods," says Zwaaneveld.
He sees a role for governments in this. "Many countries simply don't manage their water well enough. In Belgian Limburg, good investments have been made, but many regions now have problems. There's been enough rain, yet all that water, which should have been stored, is gone."
"The climate's changing, and if the specialists are to be believed, those changes are only accelerating. That means drastic measures must be taken to deal with that. Store rainwater for use when it's dry. Governments must assist growers in this; they can't do it alone," Marc insists.
VAT must be reduced
He also brings up the discussion around reducing VAT on fresh fruit and vegetables. There is a great debate in the Netherlands about such a reduction's impact and delineation. Nonetheless, Marc reiterated the need to act: "There are always reasons to keep talking, but the fact is, passing on the VAT reduction will be an extra incentive for consumers to eat healthier. We obviously can't know, at this point, exactly how much of an effect that will have, but if you want to encourage healthy eating, you must act now."
Its delineation is a topic for later discussion, Marc argues. "You can start with true, fresh fruit and vegetables. You know a head of lettuce or a banana is healthy so you can reduce those products' VAT. You can talk about other products - where it's questionable whether they're vegetables or fruit - later. The Netherlands and Belgium are ready for this. It will undoubtedly cost plenty of money, but so does healthcare if you don't do it," he explains.
Confidence in the future
Thus, after a good year, Greenyard is confident about the future. Based on its positive results, current forecasts, and outlook, the 2023-2024 financial year's revenue should grow to approximately €4.9 billion and operating profit to €175-180 million. And, by March 2026, Greenyard wants to reach €5.4 billion in sales and €200 to 210 million in operating profits.
"By 2050, there will be ten billion mouths to feed. We'll have to find better, more sustainable ways to produce food - with less impact and more nutritional value - if we don't want to risk our planet's future for our children, grandchildren, and the generations that follow. Pure-plant food is part of the solution, but it must be accessible, affordable, tasty, and easy to use. Greenyard has the scale, the people, and the full year's supply of high-quality products in all segments to enable this irreversible transition," concludes co-CEO Hein Deprez.
Read the full annual report here.
For more information:
Greenyard
Email: info@greenyard.group
Website: www.greenyard.group