Sint-Katelijne-Waver, Belgium-headquartered Greenyard on May 2 announced a 4% drop in REBITA for fiscal year results ending on March 31. While the top line performance of approximately €4,175 million was said to be “in line with consensus,” second-half margins remained under pressure.
The producer and marketer of fresh, frozen and canned vegetables and fruits, flowers, plants and growing media said that it is currently suffering from a provisional setback across all segments.
“Whereas growth in Fresh was temporarily decelerated and upfront investments were initiated which are today not yet fully up and running, Long Fresh (frozen products) continues to be impacted by Prepared, driven by ongoing price pressure further aggravated by high input costs. Additionally, Horticulture suffered from the winter conditions in Q4, which postponed the traditional spring activities.”
Therefore, Greenyard expects FY REBITDA to land at around €140 million. Profit before tax is expected to improve to c. €5 million, compared to €0.8 million last year, mainly due to the savings resulting from refinancing in December of 2016.
This lower operational performance, in combination with capex in excess of € 70 million and some material non-core divestments not yet being realized, is anticipated to result in a normalized net debt/REBITDA at c. 2.8x, in compliance with the covenants under the group’s financing, and already taking into account the payment for the acquisition of Mykogen.
“Greenyard’s preliminary annual results do not meet our expectations, also because of certain external factors. Nevertheless, our confidence in the future remains intact, based on the direction we took at the end of January,” said CEO Hein Deprez.
Together with the board, he added “Management concluded that we need to be even closer to our customers. This resulted in a further strengthening of our management teams at the business segment level. Since this significant change in the organizational structure, we have become more agile and decisions are taken much faster.”
Despite the 2017-18 results, Deprez said that the company “remains confident to realize an increase of 10% in REBITDA for the current year 2018-19, starting April 1, 2018.”
