Greenyard, the Sint-Katelijne-Waver, Belgium-headquartered company specializing in vegetable and fruit production and marketing, aims to increase sales of fresh, frozen and prepared products by approximately €650 million to generate annual turnover of approximately €5 billion and raise growth adjusted EBITA as much as €35-40 million by the 2024-25 calendar year. If the targets are met, compound annual growth rates will amount to 5% and 6-7%, respectively.
“More and more, people recognize the power and the importance of a healthy, plant-based diet. For our health and for the planet, close-to-crop food offerings are the cornerstone of our collective future. We have delivered this from the start,” said Greenyard Co-CEO Hein Deprez on December 7, as the company kicked off three days of capital market Q&A sessions. “We have a unique capability, through our scale and through our integrated relations with customers and growers, to capture a vital part of this fast-growing market. We are plant-based, by nature. It gives us a head-start and a competitive advantage.”
Including sales of flowers and plants, Greenyard rang up sales of about €4.4 billion last year. The company employs upwards of 9,000 workers at factories, distribution centers and offices in 19 countries. Its customer base of retail, foodservice and industrial accounts spans the globe from Europe and the Americas to the Middle East, Africa, Asia and Oceania.
“Now, as a next step we will push through in what is clearly the right direction,” said Deprez. “We will step up our investments in innovation and technology, leveraging the data in the value chain to provide even better products and services to our customers and consumers.”
Co-CEO Marc Zwaaneveld added: “Ahead of schedule, Greenyard has delivered what we promised. Performance has improved significantly. We demonstrate stability and strength. The Strategy 2030 we announce today is the next big step. We look ahead and will reconnect with growth. Greenyard is plant-based at its core and we already have more than 1000 plant-based convenience products in our portfolio. We are at the heart of change and will accelerate our activities in these products, supported by ongoing digitalization and strong sustainability ambitions.”
Improve, Increase, Imagine
The company’s Strategy 2030 is built on three stages: Improve, Increase and Imagine. The first stage will see Greenyard focus on further deepening integrated relationships with existing and new customers. At the same time, it will continue to increasingly develop its grower relationships, applying the same way of working.
In the “Increase” stage, which has started immediately, Greenyard is enhancing its convenience offerings, leveraging the window of opportunity for low processed healthy products and tapping into this category’s growing consumer demand.
In making this happen, the company will deploy a one-off €30-35 million CAPEX over the next three years. On the one hand, investments will be focused on further increasing capacity for convenience products to enable a swift acceleration of plant- based offerings. On the other hand, investments will furthermore be made within the integrated customer relationships realm. CAPEX is expected to be cash flow neutral, given the expected short payback terms, and further expectations of operational and working capital improvements.
In light of the strategy, Greenyard may also consider M&A opportunities in a very targeted and strict way, in Europe and potentially the USA, and only to the extent that a clear and strong integration process is feasible. Additionally, the plan is to put dividends back on the agenda for consideration by the board of directors based on 2022-23 results.
Building on the first two levels and realizing these ambitions, while safeguarding a leverage ratio of 2.0x-2.5x (pre-IFRS 16), will create headroom to further invest in other plant-based product development, expanding the company’s already 100% plant-based current offering in a universal market that Bloomberg estimates will grow to by around €150 billion by 2030.
“Greenyard firmly believes that there is a lot of additional potential to capture there,” said the company in a statement issued on December 7. “As plant-based products are the core of our business, an established global footprint paves the way to expand offerings in that segment, resulting in further growth and profitability.”
The enabler for unlocking additional value will be digitalization. Already today, a lot of data is available in the chain on quality, taste, transparency, origin, etc. Both in terms of automation and additional online services, there are many possibilities. Greenyard will therefore boost innovation within the group, allocate additional CAPEX and support for this and cooperate with disruptive companies in well-structured and controlled growth units starting next financial year.
