Fresh-produce firm Greenyard posted a 4.6% decline in full-year sales in its Fresh division in 2018/19, to €3.19 billion, with the retailer citing lower volumes, as well as the impact of ‘extreme summer weather’ on its production.
The group reported that volumes in the division were lower in its key markets, mainly in Germany and, to a lesser extent, Belgium, while price deflation also affected certain categories.
Adjusted EBITDA in the division was down by almost two thirds (-65.7%).
On the positive side, Greenyard reported that its Fresh division has benefitted from its partnership models, both in terms of sales and margin. Since its full-year period ended on 31 March, the group has closed additional partnerships with Carrefour and Delhaize, it reported.
Greenyard’s Long Fresh division, which includes frozen and prepared products, saw a 2.7% decline in sales in the full year, to €722.8 million, while adjusted EBITDA was down by 26.2%.
The group reported that a product recall in its frozen division impacted sales in the division, while the ‘extreme drought’ in Europe was also a factor.
Overall group net sales were €3.91 billion – a year-on-year decline of 4.3%.
‘Transitional Year’
“[The] last accounting year was a transitional year,” said Hein Deprez, co-CEO of Greenyard. “We have put a lot of effort and time in shifting our model further, from a transactional model in fruit and vegetables to a real partnership model with our retailers, and this shift proved to be more challenging than expected.
“Given the unexpected impact of the extremely dry summer in our Fresh and Long Fresh segments, the recall action in the beginning of the summer in Long Fresh, but, in particular, the longer-than-expected market pressure in our key Fresh markets, Greenyard experienced difficult times, which called for decisive actions.”
New Appointment
In February, Greenyard announced the appointment of a new co-CEO, Marc Zwaaneveld, to work alongside Deprez in rolling out the group’s transformation plan.
“By driving a stringent execution of the transformation plan, we can unlock large untapped potential that will improve our efficiency and profitability,” Zwaaneveld commented.
“In addition, various divestments, as well as conversations with potential cornerstone investors, are ongoing. We refocus our footprint whilst continuing to guarantee our customers the service levels they are used to. We are working diligently to improve the profitability of our company again, with a stronger balance sheet that is more robust and built for the future,” he added.
Disposals
In December of last year, Greenyard disposed of its horticulture segment, and this week, it announced the sale of its Greenyard Frozen plant in Baja, Hungary, as part of its streamlining operation. It is also in the process of seeking to offload its Prepared division.
The company added that ‘other divestments are also in well-advanced stages of divestment, while others are currently being prepared for divestment.’
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
