GREENYARD NV Greenyard posts positive H1 net result on back of continued profitable growth
Sint-Katelijne-Waver, Belgium, 16 November 2021
- Greenyard realises further profitable growth, on top of last year's double-digit growth.
- Adjusted EBITDA increases by 8% to € 82,6m for the first half of the year, with the adjusted EBITDA margin improving by 24bps.
- Net result positive at € 8,5m versus €1,1m for the same period last year.
- Net debt (excluding lease accounting) and leverage decreasing significantly versus H1 last year resp. to € 338,1m and 2,8x.
- Adjusted EBITDA Guidance of € 165,0m for AY 2021/2022 and ambition for € 190,0m by AY 2024/2025 re-confirmed.
Highlights
- Further to last year's already double-digit H1 increase in sales (+10,3%), Greenyard added another € 38,1m like-for-like sales, reaching € 2 151,6m (+1,8% versus the same period last year). This sales growth reflects positive trends in both Fresh and Long Fresh segments.
- The adjusted EBITDA for H1 continued to increase from € 76,9m last year to € 82,6m this year (+7,5%). This resulted in an improved margin by 24bps to 3,8%, mainly driven by the integrated customer relationships and further profit improvement plans. Sales from integrated customer relationships represent 74% of sales in the Fresh segment (versus 71% last year) and therefore provide stability to the margin.
- Net result from continuous operations for the first half of the year increased from € 1,1m last year to € 8,5m thanks to a stronger EBIT and reduced financial costs post the March 2021 refinancing.
- Alongside the increase in operational results, the recent divestments and further working capital improvements, have led to a decrease in nominal financial debt (excluding lease accounting) from € 407,4m in September 2020 to € 338,1m (-17,0%) for the first half of this year. As compared to March 2021, a debt reduction of € -1,8m has been achieved while over summer inventories are built up (i.e. +€ 71,2m versus year-end).
- Leverage decreases from 3,9x H1 last year to 2,8x in H1 of this year. Greenyard is well on track to meet the earlier guidance of around 2,5x by the end of the financial year.
- Working capital improvements resulting in a better cash conversion cycle, and a decrease in factoring usage, which dropped € 50,4m from € 282,5m at the end of September last year to € 232,1m for H1 of this financial year.
- Greenyard re-confirms its earlier adjusted EBITDA guidance of € 165,0m for the full financial year ending 31 March 2022, and its ambition to grow to € 190,0m by 2024/2025.
- Greenyard will host its virtual Capital Markets Days on 7, 8 and 9 December 2021, for which more information is available throughhttps://capitalmarketsdays.greenyard.group/
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- On the H1 financials, a live webcast will be hosted today. This can be accessed by visiting thefollowing linkor via telephone: +32 2 588 50 96, Passcode: 44019026#. The call begins promptly at 2:00pm (CET).
Hein Deprez, co-CEO: "The financial results of this first half year underpin the successful roll-out of our strategy. We will continue to build and leverage our unique position in the healthy food ecosystem. Greenyard is in both segments right at the heart of the current transition towards more- plant-based diets. Our integrative commercial strategy is the way of the future, and combined with our permanent efficiency improvement programs, leads to stable financial performances. Going forward, we truly have a unique opportunity to contribute to an enhanced health for current and future generations, and for the planet."
Marc Zwaaneveld, co-CEO: "This first half year, we continued the same path of sustainable and profitable growth, further building on last year's double-digit growth. We demonstrated strong cost leadership, and at the same time we committed to impactful investments to ensure long-term and relevant growth for our company. We will accelerate investing in further digitisation and automation, fully embedding it into our operations. Greenyard is well-positioned to add value in the entire value chain, and to further unlock the power of plant-based food. We are set to reach our earlier guidance of adjusted EBITDA, for the current accounting year, of €165,0m, and stable growth in the years to come."
1. Key financials - continuing progress Figure 1 - Key financials
Key financials (in €'000 000) | H1 | 21/22 | H1 | 20/21 | Difference | ||||||
Sales (reported) | 2 | 190,5 | 2 | 172,6 | 0,8% | ||||||
Sales (like-for-like) | 2 | 151,6 | 2 | 113,5 | 1,8% | ||||||
Adjusted EBITDA | 82,6 | 76,9 | 7,5% | ||||||||
Adjusted EBITDA-margin % | 3,8% | 3,5% | |||||||||
Net result continuing operations | 8,5 | 1,1 | |||||||||
EPS continuing operations (in €) | 0,16 | 0,02 | |||||||||
NFD (excl. lease accounting) | 338,1 | 407,4 | -17,0% | ||||||||
Leverage | 2,8 | 3,9 | |||||||||
Sales. Greenyard achieved a 1,8% increase in sales (on a like-for-like basis) after last year's double- digit sales growth. Group sales increased year-on-year by € 38,1m, up from € 2 113,5m to € 2 151,6m.
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Like-for-like sales | ||
328,0 | 341,1 | |
Long Fresh | ||
Fresh | 1.785,5 | 1.810,5 |
H1 20/21 | H1 21/22 |
Adjusted EBITDA. As a result of growth in sales, particularly arising from integrated customer relationships, and a continued focus on profit improvement initiatives, the adjusted EBITDA increased beyond the level of sales growth by 7,5%, up from € 76,9m to € 82,6m. Consequently, the adjusted EBITDA margin increased from 3,5% in the same period last year to 3,8% for the first six months of the financial year.
adjusted EBITDA | ||||||||||
27,1 | 28,1 | |||||||||
Long Fresh | ||||||||||
Fresh | 50,2 | 54,5 | ||||||||
H1 20/21 | H1 21/22 | |||||||||
adjusted EBITDA margin | ||||||||||
7,4% | ||||||||||
7,1% | ||||||||||
Fresh | ||||||||||
Long Fresh | ||||||||||
Group | 3,5% | 3,8% | ||||||||
2,8% | 3,0% | |||||||||
H1 20/21 | H1 21/22 |
EBIT. EBIT amounts to € 32,0m, indicating an improvement of € 4,9m compared with the same period last year, driven by the increase in adjusted EBITDA, while depreciation and amortisation are slightly above the level of the first six months of last year (+€ 0,8m) following an increased
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investment level. Net adjustments are almost 'nil' i.e. limited reorganisation and claim costs are compensated by the gain on disposals as well this year as in the first half of previous financial year.
Net result. Greenyard reports a net result from continuing operations of € 8,5m for the first half of the financial year, compared to € 1,1m for the same period last year. In addition to a higher EBIT, interest expenses have been considerably reduced (-€ 6,2m) as interest margins decreased because of the refinancing at the end of last accounting year and decreasing debt levels. However, income taxes have increased in line with the increase of profit before tax and depleted carried forward tax losses in some entities.
Leverage. Excluding lease accounting and in line with the definitions in Greenyard's credit facilities, net financial debt (NFD) was significantly reduced by € 69,3m compared to September 2020, to
- 338,1m on 30 September 2021. This translates into a leverage of 2,8x, down from 3,9x in September 2020. Apart from the higher operational cash generation, the improvement is driven by the successful execution of a capital increase in March 2021 and non-core disposals of Greenyard Prepared Netherlands and Bardsley Fruit Enterprises in July 2021. These steps accelerated Greenyard's deleveraging path towards a sustainable leverage between 2,0x and 2,5x, with around 2,5x already achievable by March 2022.
Net Financial Debt and Leverage
500,0
400,0
300,0
200,0
100,0
-
5,0x | |||||||||||||
4,0x | |||||||||||||
3,9x | |||||||||||||
3,0x | |||||||||||||
2,8x | |||||||||||||
2,0x | |||||||||||||
407,4 | 338,1 | 1,0x | |||||||||||
0,0x | |||||||||||||
H1 20/21 | H1 21/22 | ||||||||||||
Net Financial Debt (excl. Lease accounting) | Leverage | ||||||||||||
CAPEX. In H1, we have committed € 36,4m of the € 60,0m group capex program in the current accounting year.
This includes the next step in the roll-out of ERP/Infor, automation of packing and sorting lines and additional ripening and assembly capacity in the Fresh segment, with a new 'state-of-the-art' citrus sorting line in the Ridderkerk DC as the main project go-live.
In the Long Fresh segment the planned investments comprise a packing line, mixing and light coating line, sorting line and freezing tunnel, with packing automation in Poland and a new engine room in France with 100% heat recovery being the main project go-lives.
However, the capex paid amounting to € 23,9m in H1, is slightly delayed a.o. due to focus on the operational business. There will be a capex catch-up towards the end of the accounting year.
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By segment1 - Fresh
Figure 2 - Evolution in sales and adjusted EBITDA
Key segment figures - FRESH
in €'000 000 | H1 | 21/22 | H1 | 20/21 | Difference | ||||||||
Sales (reported) | 1 | 811,8 | 1 | 792,2 | 1,1% | ||||||||
Sales (like-for-like) | 1 | 810,5 | 1 | 785,5 | 1,4% | ||||||||
Adjusted EBITDA | 54,5 | 50,2 | 8,6% | ||||||||||
Adjusted EBITDA-margin % | 3,0% | 2,8% | |||||||||||
The Fresh segment achieved a sales growth of 1,4% on a like-for-like basis (or 1,1% on reported basis), generating an additional € 24,9m in sales in the first six months of the financial year. The sales increase was mainly attributable to an expansion of the product and service offering within the integrated customer relationships which continues the growth path after the double-digit growth realised last year and which currently represents 74% of sales of the Fresh segment.
The adjusted EBITDA increased by € 4,3m over the same period in the previous year, up by 8,6%, a considerable uptick resulting in a margin improvement of 21bps. Besides the stable and profitable growth with long term integrated customer relationships, a continued focus on profit improvement initiatives in sourcing, transport and operational efficiency is driving this margin improvement. The growing share of sales in the Fresh segment earned from long-term integrated customer relationships results in a robust adjusted EBITDA margin with reduced volatility.
2 - Long Fresh
Figure 3 - Evolution in sales and adjusted EBITDA
Key segment figures - LONG FRESH
in €'000 000 | H1 21/22 | H1 20/21 | Difference | ||||||
Sales (reported) | 378,7 | 380,4 | -0,4% | ||||||
Sales (like-for-like) | 341,1 | 328,0 | 4,0% | ||||||
Adjusted EBITDA | 28,1 | 27,1 | 3,5% | ||||||
Adjusted EBITDA-margin % | 7,4% | 7,1% | |||||||
Sales in the Long Fresh segment have increased by € 13,2m, compared with the same period last year, a 4,0% increase on a like-for-like basis (or -0,4% on a reported basis). The sales are growing steadily, due to a partial revival of food service (from 13% to 17% of Long Fresh sales), further growth with higher-end convenience and fruit categories and additional business unlocked by convenience investments. Nevertheless, sales in the UK were slowed down due to important post-Covid disruptions in the economy, and more specifically within supply chains.
Adjusted EBITDA increased by 3,5% versus the same period last year. Moreover, the adjusted EBITDA margin improved by 29bps to the level of 7,4%, thanks to the continued focus on operating
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Greenyard NV published this content on 16 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 November 2021 06:55:05 UTC.
