Fresh produce firm Greenyard has recorded what it has described as a 'faster and stronger' recovery than expected in the first half of its financial year, boosted by the group's Transformation Plan.
The group saw net sales down 0.5% in the period, to €1.97 billion, compared to the same period last year (€1.98 billion), however adjusted EBITDA was up 15.7%, to €47.6 million.
'Clear Focus'
'Thanks to a clear focus on margin improvement and cash, Greenyard’s financial results are showing encouraging signs of recovery,' the group said in a statement. 'This recovery is the result of the optimisation of the sales portfolio, strongly influenced by the stringent execution of the Transformation Plan.'
The group's Fresh segment saw a 2.1% decrease in sales in the first half, due to the 'termination of certain loss-making transactions', the group said, while in its Long Fresh segment, sales were up 7.4%, boosted by higher volumes.
In the period, Greenyard has completed three planned divestments of non-core assets, in line with its plan to streamline operations, including its frozen plant in Baja, Hungary, its UK flowers business, and a fresh distribution centre in Freiburg, Germany.
It has also cut its workforce, with 334 employees leaving the firm in the first half. According to the group's Transformation Plan, a total of 422 workers are expected to leave the business, in order to deliver an adjusted EBITDA improvement of €20 million for the 2019/20 full year.
The group has also announced several partnerships, with which it expects to 'gradually secure additional sales and decrease margin volatility going forward', it said.
“Greenyard and our colleagues have shown great resilience and fought back hard,"commented Hein Deprez, co-chief executive, Greenyard. "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.”
Full-Year Outlook
The group said that it is anticipating full-year EBITDA to land between €88 million and €93 million, while it has also eyed the sale of its Belgium-based prepared foods activities, in order to 'preserve and use the full positive cash generation of its entire portfolio of activities for the further deleveraging of the group'.
"We are still in the midst of our transformation period, added co-chief executive Marc Zwaaneveld. "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.”
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
