In the first half of Greenyard's new fiscal year, its adjusted operating income and net sales increased by 12.3% (€90.3 million) and 11.2% (to €2.49 billion), respectively. The company announced these results on Tuesday. In contrast, net income was almost flat (€7.1 million to €7 million). That reports co-CEO Marc Zwaaneveld is mainly due to higher interest expenses and depreciation. He considers integrated client relations vital for the future.
Greenyard's rise in revenue is primarily thanks to volume growth in the fresh segment and inflation compensation measures in the fresh and long-fresh ones. Volumes increased by 1.7% and prices by 9.5%. Also, Marc says, the debt ratio kept falling in the new financial year's first half, going from 2.7x to 2.4x. "That, despite an inventory build-up requiring several dozen million more in the summer," the co-CEO states with satisfaction.
In June, Greenyard announced its intention to suggest reinstating its dividend policy to its shareholders. That would start with a €0.10 per share divided payment for the whole financial year ending in March 2023. "We decided that then and will, naturally, continue. There's no discussion about that. We want to increasingly build that up in the coming period, too."
Integrated client relations
According to Marc, the fresh segment's expansion is primarily down to revenue from the company's integrated client relations. That is where Greenyard sees excellent potential. These business partners' turnover percentage has also increased from 74% to 78%. "With the challenges in product availability, I think a move to long-term collaborations is inevitable. This summer's weather may have been nicely varied, but we're moving more and more toward longer periods of drought and rain. Then you need products," he says.
"We can accommodate that with long-term collaborations with, say, producers and retailers. We do everything in concert within these integrated customer relationships, from chain optimization to transport logistics and cultivation. Then, you know what product to expect, and together, you can respond to market issues. We recognized this potential quite early on and have fully committed to it. That will also become a must for many because otherwise, you miss out."
Not pricier than meat
Marc confirms that inflation remains an important issue for their sector, too. "People worry about the product affordability. We're doing relatively better than the market trends, mainly because people realize our products are nice meat alternatives."
"They have similar nutritional value, but fruits and vegetables are much cheaper than meat. People must be made aware of that, though. That's also something we must keep working at; we must use great products to make the step to meat substitutes attractive," Zwaaneveld says.
Greenyard is, thus, always looking at ways to make fruit and vegetables attractive in other forms besides fresh products. "Our convenience products are catching on well. We also have our fruit- and vegetable-based Gigi-gelato, which you can now find at several retailers. Meat alternatives like beet burgers also continue to grow in popularity."
"Pure plant is also becoming increasingly important among chefs. There are more opportunities to do something delicious with it. A noticeably huge change is coming in the transition to these kinds of alternative products. I feel we're on the front end of this, and there's still plenty of potential in that part of the market," Marc says.
Greenyard confirms it wants to achieve an adjusted operating profit of €175m - €180m and a net sales of €4.9bn. The company also confirms its ambition to achieve sales of €5.4 billion and an operating profit between €200m - €210m by March 2026.
Promoting health
Marc explains that they expect to achieve this because the fruit and vegetable sector is the answer to several issues facing society. Besides affordability, Greenyard talks about health and climate. "I believe we can address these themes well with our products. You see that when you compare our products with meat or processed products. Also, fruits and vegetables clearly positively affect the climate."
"We're committed to pure plants and pure foods. It's not for nothing that consumers, organizations, and politicians are looking at ways to promote fruit and vegetable consumption or penalize unhealthy ingredients like sugar. It's also an argument to help products already well-suited to that," Marc explains.
Here, he refers specifically to abolishing VAT on fruits and vegetables and again calls for a move to tax-free fruits and vegetables as soon as possible. "It remains strange that people struggle to determine which products should be covered by this. You can stop with unprocessed fruits and vegetables tomorrow. It seems like an A-brand lobby is trying to stop this, but politicians must have the guts to do it. You can then see later whether more should eventually be covered."
The company is generally optimistic about the future again. That is something recently appointed CFO Nicolas De Clercq points out, "It's good to see the company posting strong results. Volumes have continued increasing, and inflationary effects are being mitigated within the Group."
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Greenyard
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Website: www.greenyard.group