Greenyard : confirms positive financial year - reinforcing its market position and looking ahead with confidence

Greenyard confirms positive financial year, reinforcing its market position and looking ahead with confidence

Sint-Katelijne-Waver, Belgium, 14 June 2023

Key highlights

Greenyard outperformed the market in fruit and vegetables. The average consumption of fresh fruit and vegetables per capita declined by 10% in 2022. Nevertheless, Greenyard's Like- for-Like sales increased by 7,9% vs last year to € 4 638,0m, despite the current adverse economic and macro-politicalcontext. Contrary to the general consumption trend, Greenyard volumes only decreased by a minor -0,8%,while prices increased by +8,5%.

• In the Fresh segment, Greenyard notes a limited volume drop (-1,9%), proving the resilience of its integrated customer relations. On the other hand, volumes in the Long Fresh segment increased (+4,5%), demonstrating the high complementarity of both segments for consumers.
• Adjusted EBITDA further increased to € 167,3m versus € 166,5m last year (+0,5%). The limited increase was realised thanks to the robust business model of building an integrated long-termrelation with the customer. In addition, Greenyard applied an agile approach in a highly inflationary environment that experienced disruptions in the supply chain and consumer behaviour.
• Net financial debt (pre-IFRS 16) strongly decreased to € 277,3m versus € 303,6m last year, resulting in a continued drop in leverage from 2,4x last year to 2,2x.
• Net result ended at € 9,3m versus € 16,9m last year. This is mainly due to further reorganisations to strengthen the Fresh operating model towards the future. As part thereof, the wind-down of Fresh UK has almost been completed. Furthermore, it has been decided to operationally serve the French market from the Greenyard organisations in the neighbouring countries.
• For full year 2023/24, Greenyard communicated to reach € 175m - 180m of Adjusted EBITDA and € 4 900m of net sales. Greenyard also confirms its ambitions of reaching € 5,4bn of sales and between € 200m - 210m of Adjusted EBITDA by March 2026.
• At the same time, Greenyard communicated that it will present to its shareholders at the
  Annual Shareholders' Meeting on 15 September 2023 its proposal to re-initiate a dividend policy, starting with a dividend payment of € 0,10 per share for the full year ended March 2023.
• Greenyard believes that industry trends (product availability, quality and affordability, sustainability as leading factor, increased digitisation, and transparency in the supply chain to have the best proposition for the end-consumer) will drive further consolidation in the sector. Such evolutions are expected to be an accelerator for growth and to lead to clear benefits for customers, consumers, growers, and all other stakeholders. Greenyard intends to play a leading role in such evolutions and analyses strategic consolidation or partnership options with like-minded sector players.
• Interested parties are invited to listen in on a live webcast today by visitingthis link. The call will begin promptly at 2.00 p.m. (CET). A replay of the call will be available on Greenyard's Investor Relations webpage in the coming days.

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2022/2023 results: a growing appetite for Greenyard's unique business model: outperforming the market

in tough economic times

The fiscal year 2022-2023 was marked once again by severe macro-economic circumstances: shortages, unseen inflation rates, and soaring energy prices dominated last year's global economy. Consumers' purchasing power was impacted, forcing them to make choices in their food expenditures. The average consumption of fresh fruit and vegetables per capita declined by 10% in the year 20221.

In these hard times, with volatile markets and product shortages, Greenyard continued to build its track record, for people seeking healthy food options, for customers and consumers in need of affordable high- quality products and added-value solutions all year round and for its stakeholders alike.

Positive results in tough times: Greenyard outperforms the market

Greenyard's 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 significantly stronger than the total market projections in terms of per capita consumption of fresh fruit and vegetables. As a result, the company is gaining 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%). Greenyard was able to absorb the volumes of consumers that have traded down from certain fresh categories into frozen and ambient food categories, creating synergies at the consumer side. This unique combination of three divisions provides additional stability and creates a steppingstone for future growth.

Sales phased per Q

Sales phased per Q

Fresh

Long Fresh

952 982

822 897

842 874

9261009

172 196

170 195

199 238

215 247

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

AY 21/22

AY 22/23

AY 21/22

AY 22/23

A growing appetite for Greenyard's unique business model

Integrated Customer Relationships (ICR) are one of the catalysts for Greenyard's performance. The company also sees a growing appetite from customers for this unique business model. This unique model allows to work more cost-efficiently in the supply chain, fully leverage the transparent and open dialogues to the benefit of all parties and ensure the full adoption of sustainability throughout the food value chain, while guaranteeing the availability of the best assortment for the consumer. Existing ICRs are highly successful, with satisfied customers, growing alongside Greenyard in the fruit and vegetable categories. Today, already 75% of the Fresh sales originate from Integrated Customer Relationships.

Looking forward with confidence

Following this performance, Greenyard decided to reinstate a dividend policy. The Board of Directors of Greenyard will therefore propose to the Annual Shareholders' Meeting on 15 September 2023 to approve a dividend of € 0,10 per share for the full financial year which ended in March 2023 as a first dividend since October 2018.

1Projections by Freshfel, the European fresh fruit and vegetable association.

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Based on Greenyard's positive results and today's estimates and projections, for the financial year 2023- 2024, sales are expected to grow to around € 4 900m and the Adjusted EBITDA is expected to increase to

• 175 - 180m. Furthermore, Greenyard has set its ambitions for March 2026 at € 5,4bn of sales and between
• 200 - 210m of Adjusted EBITDA.

With a strengthened relative market position, Greenyard is set to reap the benefits both of increasing consumption and its unique approach to the market, particularly with the tailwinds of a normalised economic and geo-political climate.

Quote of the co-CEOs:

Hein Deprez, co-CEOsaid: "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. Pure- plant food is part of the solution, but should be accessible, affordable, pleasurable and convenient. Greenyard has the scale, the people and the full-year offering of high quality products in all segments to help drive this irreversible transition."

Marc Zwaaneveld, co-CEOadds: "These are very positive results in such a difficult economic year, once again proving the unique strength of Integrated Customer Relationships and the complementarity of our divisions. We look ahead with confidence, even in uncertain times. 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 all our stakeholders. With a strong relative market position, we are ready for a healthy future for all."

Figure 1 - Key financials

Key financials (in €'000 000)	AY 22/23	AY 21/22	Difference
Sales (reported)	4 690,1	4 400,5	6,6%
Sales (like-for-like)	4 638,0	4 297,5	7,9%
Adjusted EBITDA	167,3	166,5	0,5%
Adjusted EBITDA-margin %	3,6%	3,8%
Net result continuing operations	9,3	16,9
EPS continuing operations (in €)	0,16	0,32
Net financial debt (excl. lease accounting)	277,3	303,6	-8,7%
Leverage	2,2	2,4

Sales. Greenyard sales increased with 7,9% or € 340,5m on a like-for-like basis, from € 4 297,5m to € 4 638,0m. The growth is driven by price increases (+8,5%) to cover inflated input costs comprising FX tailwinds of 0,5%, partially offset by a limited volume decrease of (-0,8%) and 'other' impacts (+0,2%). Long Fresh benefited from volume growth thanks to food service picking up post-COVID and a trend of down trading from branded to private label and from Fresh to Long Fresh. Moreover, despite volume pressure in the fresh F&V retail, we managed to keep the decline of volumes very limited thanks to our integrated customers relations.

Adjusted EBITDA. The Adjusted EBITDA increased with € 0,8m from € 166,5m to € 167,3m which represents a growth of 0,5% in an inflationary economic context. The Adjusted EBITDA margin dropped slightly by 20 bps from 3,8% to the level of AY 20/21 being 3,6%. AY 22/23 was an extremely difficult year due to the

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unforeseen economic headwinds following the conflict in Ukraine, the impact of drought and scarce labor on production efficiencies and high inflation rates. The latter impacted consumer spending and put pressure on margins. Nevertheless, Greenyard was able to stabilize its operational profitability in absolute terms thanks to a frequent review of sales prices, tight cost control and a strong co-operation with the integrated customer relationships.

Net result. Greenyard reports a net result from continuing operations of € 9,3m compared to € 16,9m for the same period last year. Although the Adjusted EBITDA is slightly above last year, the net result ended just below € 10m due to higher reorganization costs and increased interest rates. The reorganization costs, which are non-recurring in nature, are linked to the fact that the group continued to take organisational measures to adjust to the new market situation, and at the same time strengthen the organisation to fully take advantage of its improved competitive position. Furthermore, the interest rates on the Group's indebtedness which are EURIBOR-linked, have risen. The impact for Greenyard has however been mitigated by the interest hedging applied by the Group before summer 2022.

Leverage. Excluding lease accounting cfr. bank covenant definitions, net financial debt (NFD) was significantly reduced by € 26,3m compared to March 2022, to € 277,3m on 31 March 2023. This translates into a leverage of 2,2x, down from 2,4x in March 2022. This result was achieved thanks to the successful management of the cash conversion cycle with increased factoring efficiency and whereby inflation increased the accounts payable position despite price inflated values of stock.

Segment review

1. Fresh

Figure 2 - Sales and Adjusted EBITDA evolution

Key segment figures - FRESH
in €'000 000	AY 22/23	AY 21/22	Difference
Sales (reported)	3 814,5	3 607,4	5,7%
Sales (like-for-like)	3 762,4	3 542,0	6,2%
Adjusted EBITDA	95,1	101,9	-6,7%
Adjusted EBITDA-margin %	2,5%	2,8%

Like-for-like (LfL) Fresh sales increased by +6,2% YoY or € 220,4m, to € 3 762,4m. Sales within the integrated customer relationships thereby continues to represent 75% of the Fresh segment sales which provides a stable financial basis in these volatile economic times. The sales growth is explained by price increases amounting to 7,8% including +0,8% FX tailwinds, partially offset by a limited negative volume effect of -1,9% related to the re-balancing of out-of-home consumption post-COVID, and consumers hesitating to consume fresh fruit and vegetables due to loss of purchase power. Please note that price dynamics in Fresh are not only driven by input cost inflation but also by supply-demand volatility in the different F&V categories caused by elements like weather, geopolitical changes, etc.

The Adjusted EBITDA of the Fresh segment is -€ 6,8m lower than in AY 21/22 due to margin and volume pressure. Not all inflation could be passed on as not all retailers fully adapted their prices to protect their market share. In some countries Greenyard took additional reorganization measures to strengthen the organization and focus on key activities. Greenyard's long-term oriented customer relationships were very resilient in the current volatile economic environment and generated volumes and margins that proved to be more robust than the overall market. These ICR relations are at the heart of Greenyard's strategy, and Greenyard is fully committed to its long-term strategy to further expand this collaborative way of working, with existing and future customers.

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2. Long Fresh
Figure 3 - Sales and Adjusted EBITDA evolution
Key segment figures - LONG FRESH
in €'000 000	AY 22/23	AY 21/22	Difference
Sales (reported)	875,6	793,1	10,4%
Sales (like-for-like)	875,6	755,6	15,9%
Adjusted EBITDA	72,3	65,8	9,9%
Adjusted EBITDA-margin %	8,3%	8,3%

LfL Long Fresh sales increased by +15,9% YoY to € 875,6m, up € 120,0m from € 755,6m. This double-digit Sales growth is driven by 4,5% volume growth in retail and food service both exceeding pre-COVID levels. Moreover, we noticed a positive shift from branded to private label products, benefiting Greenyard. Down trading also took place from Fresh to Long Fresh as latter products are relatively less expensive. This makes Greenyard more resilient in uncertain and/or inflationary times being present in both segments. 12,0% of the sales growth is explained by sales price increases to cover inflation and comprises -0,8% FX headwinds. Furthermore, net sales related to transport activities decreased with -0,6%.

In absolute terms, the Adjusted EBITDA rises with € 6,5m thanks to the volume increases and a one-off recovery of previous years' contributions related to water management. The margin remains stable at 8,3% as Greenyard was able to manage production inefficiencies caused by lower crop yields due to drought and scarcity in labour, and high-cost inflation by several waves of sales price increases (albeit slightly delayed).

Adjustments

Figure 4 - Adjustments made for one-off items from operating activities

	EBIT - Adjusted EBITDA					AY 22/23						AY 21/22
				Fresh		Long		Unallocated		TOTAL			Fresh		Long		Unallocated			TOTAL
						Fresh									Fresh
				€'000		€'000		€'000		€'000			€'000		€'000		€'000			€'000
	EBIT			11 609		38 914		-1 815		48 709			28 560		32 425		-2 701			58 283
	Depreciation and amortisation			67 077		33 239		1 041		101 358			64 883	33 818	1 128	99 828
	Impairment other			-		-		-		-			430	-	-	430
	EBITDA			78 686		72 154		-773		150 067			93 872	66 243	-1 573	158 542
	Reorganisation costs and reversal of
	provision for reorganisation costs (-)			4 693		44		319		5 056			2 171	368	324	2 862
	Corporate finance related project costs			1		-		362		363			111	20		66	197
	Costs related to legal claims			1 412		1 023		25		2 460			3 540	-769	36	2 807
	Income related to legal claims			-640		-		-		-640			-	-	-	-
	Result on sale of assets			-		-977		-		-977			-	-	-	-
	Other			1 424		13		28		1 465			491	37		32	559
	Adjustments			6 890		102		735		7 727			6 312	-344	458	6 426
	Result on sale of divestitures			-		-		-		-			-2 961	307	-	-2 653
	Current year EBITDA of divestitures			9 505		-		-		9 505			4 670	-447	-	4 223
	Divestitures (not in IFRS 5 scope)			9 505		-		-		9 505			1 709	-140	-	1 570
	Adjusted EBITDA		95 081		72 256		-39		167 298			101 894		65 759		-1 116			166 537

REGULATED INFORMATION - 14 June 2023, 7.45am