The financial year 2022-2023 was marked once again by severe macro-economic circumstances. After navigating through COVID and the global supply chain disruptions of 2021-2022, we were confronted with the shocking war in the Ukraine. A horrible conflict, with unspeakable consequences in the region. And with a severe impact on people and businesses throughout Europe and beyond. It resulted in shortages, unseen inflation rates, equity market volatility and soaring energy prices as from March last year.
People’s purchasing power was clearly impacted, to the point where some needed to make tough choices in their household budgets and their food expenditure. The availability – and in some cases the accessibility – of healthy foods, became more important than ever.
Our colleagues stepped up and truly went the extra mile. Together, we navigated through another unpredictable year. We want to explicitly thank them. They show great passion for our products, find creative solutions and have displayed tireless efforts to do what they promise. Together with our customers and our growers, we all further supported the acceleration towards a healthier future for all.
“With 10 billion people to feed by 2050, we will have to find better and more sustainable ways of producing food - with less impact and more nutritional value - if we don’t want to jeopardise the future of our planet for our children, grandchildren, and the generations after them. The time is now.”
- Hein Deprez, Founder & Executive Director of the Board
Greenyard continues to build a strong track record, with like-for-like net sales increasing to around € 4 638,0m(+7,9%%). Adjusted EBITDA increased to a level just above last year to € 167,3m. In addition, the net financial debt of the group (pre-IFRS 16) has decreased to € 277,3m (from € 303,6m last year), even with higher valued inventory in the Long Fresh segment due to inflation. The leverage ratio further decreased from 2,4x to 2,2x. Net result ended at € 9,3m versus € 16,9m last year.
These are very strong results in such a difficult year and we did it on our own strengths, by improving our operations and being resilient in our price setting. Once again illustrating the strength of our business model, with our Integrated Customer Relationships (ICR) as the catalyst for our performance. Our effective model enabled us to work more cost-efficiently in the supply chain and to better charge through increased input costs, in a transparent manner (even if not fully, and with a limited time delay). This allowed us to capture price increases, based on open and fair communication, which resulted in price increases by 8,5%.
Moreover, where many retailers were struggling with product shortages and empty shelves, we have been able to supply our customers with a full range of products throughout the year. Relying on our global scale with sourcing capacity over the entire world, and our long-term relationships with growers, we were able to adapt and find solutions for our customers.
In these times of volatile markets and product shortage, we are seeing a growing appetite for our way of working. Early 2023, we have concluded another Integrated Customer Relationship with an important retailer, supplying and servicing more than 100 stores in Germany. This will represent more than three quarters of our turnover. Today, we are already working on the next ones.
The market also recognises the value of our sustainable and transparent way of working. Sustainability has always been the cornerstone in our strategy. It is an essential element in all decision-making processes, from sourcing and distribution to our daily operations, and even in finance: last year, we refinanced all our loans into sustainability-linked loans. It’s a decision which clearly illustrates that sustainability is embedded in every layer of our organisation, creating value for our customers, consumers, our supply chain and the environment.
In this fiscal year, we also reaped the benefits of another part of our unique business model – our complementary offering of fresh, frozen and prepared products. The European sector organisation for fresh produce, estimates that the average consumption of fresh fruit and vegetables per capita declined by 10% in the year 2022(*). Contrary to this, Greenyard has seen volumes remain stable, with a slight decrease of - 0,8%. A limited drop in volumes in the Fresh segment (- 1,9%) shows that our Fresh division is performing stronger than the total market of fresh fruit and vegetables. This leads to the fact that we are taking additional market share in this segment. And on top of that, we also see a clear increase in volumes in the Long Fresh segment (+ 4,5%). It sets us apart in the sector and creates a strong steppingstone for future growth.
This evolution shows the power of our unique combination of three divisions. Greenyard was able to absorb the volumes of consumers that have down traded from certain fresh categories into frozen and ambient food categories. And this is exactly where the synergies of our global business lay: at the consumer side. Our complementary product offerings are in line with consumers’ own experiences and expectations and enable us to provide consumers with the right product for any budget, any lifestyle and any eating moment.
During the tough macro-economic circumstances of last year, we did not slow down our search for continuous improvement within our own operations. We see it as our responsibility towards our growers and our customers to be at the forefront of innovation, operational excellence and technology. The roll-out of ERP software in the Fresh division will allow us to capture more and better data and translate them into valuable business information. The same goes for our forecasting tools used to better predict supply and demand. We continue to push our organisation to be mindful of the value of information to better service our customers and consumers.
Based on our performance of last year, we have decided to reinstate a dividend policy. Greenyard's Board of Directors will therefore propose to the general meeting of shareholders on 15 September 2023 to approve a dividend of € 0,10 per share for the full financial year which ended in March 2023.
And we look ahead with confidence. As we move forward, we remain resolute to achieving sustainable growth and creating long-term value for everyone in the food value chain, and for our shareholders. We expect our sales to grow to ca. € 4 900m for the full financial year 23/24 and expect an Adjusted EBITDA of € 175-180m. Also in this new fiscal year, we will continue our journey with a clear focus on additional growth opportunities. We expect further acceleration in our Integrated Customer Relationships (organic growth and new relationships), upcoming product and category innovations and keep looking for relevant and value adding external growth.
Looking to the years to come, we set our ambitions for the longer run at € 5,4bn sales and between € 200-210m of Adjusted EBITDA, by the end of March 2026.
We are confident in our ambitious outlook because we are convinced we are on the right side of history, for people and for our planet. Every indicator shows that fruit and vegetables – even though they have been around since forever – are the food of the future.
With 10 billion people to feed by 2050, we will have to find better and more sustainable ways of producing food - with less impact and more nutritional value - if we don’t want to jeopardise the future of our planet for our children, grandchildren, and the generations after them. The time is now.
Consumers are looking for healthier lifestyles, a search that has been intensified following the worldwide COVID pandemic. Even the most gastronomic restaurants are putting pure-plant food at the centre of their menus. But our renewed appreciation for pure-plant food is not just some hype. What we are seeing today is a cultural transition – we have reached a tipping point and we’re not going back.
Today, as a global leader in this domain, Greenyard is at the heart of this major transition. As a matter of fact, it has been our purpose since the very start of our company – which was founded exactly 40 years ago, in June 1983. Since then, we have gathered all the building blocks we need to realise our purpose. We have the global scale, the footprint and the passionate people to do so. Moreover, our connections with most of the world’s biggest retailers and with the world’s greatest growers further enhance our potential for success.
We have everything we need to be the driving force in the transition to a healthier future and boost the consumption of fruit and vegetables, which is still well below recommended amounts. Our purpose is to improve life through pure-plant food experiences. We believe in the power of natural products, close-to-crop, bursting with nutrients and in the full glory of their authentic taste, colour and texture. Our pure-plant Gigi Gelato and our collaboration with We’re Smart are just two examples of how we want to bring our vision to life and accelerate the transition. We constantly work on creating new ways and new moments of consumption of fruits and vegetables. For instance, by introducing indulgence via guilt free snacking and by educating people on how to prepare pure-plant menus in an easy way, and full of taste.
We would like to take the opportunity to thank all our stakeholders for another strong year and we invite anyone who shares our vision to join us on our exciting journey. In this report, we are happy to take you on a fascinating tour to discover our unique vision and our main accomplishments of the fiscal year 2022-2023. Together we can further improve life, by unleashing the pure power of plants.
