Greenyard : demonstrates resilience and robustness in profitability and volumes

Greenyard demonstrates resilience and robustness in profitability and volumes

Sint-Katelijne-Waver, Belgium, 14 November 2022

Highlights:

• The market in fruit and vegetables (post-COVID-19) is severely impacted by unprecedented macro-economic and geopolitical turmoil.
• Greenyard has done better than the market trend on both volumes and prices. Versus a (temporary) declining European fresh produce market, the Group increased its market share in its Fresh segment. It equally grew its volumes in its Long Fresh segment during the first half year of Greenyard's financial year 22/23.
• Greenyard sales increased by 7,3% on a like-for-like basis versus last year to € 2 270,2m, even accelerating versus its Q1 4,8% growth. Both the Fresh and Long Fresh segment grew, respectively by 5,9% and 14,5%.
• The Group's Adjusted EBITDA is in line with last year, at € 80,4m versus € 82,6m last year. Thus, it overcame lower market volumes, high inflation, higher energy, transport, and labour costs, all weighing heavily on the entire sector's profitability. Its sustained profitability and increase in market share are important elements to deliver growth as an industry leader, particularly in a new macro-economic normal.
• Positive net result from continuing operations stood at € 7,1m versus € 8,5m last year.
• Net Debt decreased to € 328,4m from € 338,1m for the comparable period of last year, even with higher valued inventory in the Long Fresh segment due to inflation. The leverage ratio (Net Debt/Adjusted EBITDA) equally dropped to 2,7x from 2,8x in the comparable period last year.
• Greenyard has also improved its financing mix thanks to the real estate transaction in Greenyard Prepared in Bree. The Net Debt therefore only includes € 239,8m of bank debt.
• Anticipating the steep increase in interest rates, Greenyard closed the refinancing of its existing bank debt in September. Interest rate margins remained stable, and better terms and conditions were negotiated. The renewed € 420m bank financing provides liquidity room and a stable funding for the Group for a new five-year period.
• The current economy and geopolitical climate make it difficult to give a clear guidance. In the short term we believe that the resilience we demonstrated will continue. In the longer term we believe that the level and speed of growth is dependent on the macro-economic and political developments. The fact that we improved our market share and the clear advantages of our business model will act as a catalyst for an accelerated growth after a new equilibrium will be reached. Our industry was one of the first to have the negative impact of the current situation, but will also be one of the first to pick up together with the incentivization of eating more healthy.
• Interested parties are invited to a live webcast today. This can be accessed by visiting the followingLINK. The call begins promptly at 14h (CET). An audio replay of the conference call will be made available later, on Greenyard's investor relations webpage.

Regulated information - 14 November 2022, 7:45am

2 / 10

Co-CEOHein Deprez said: "The current economic circumstances have led the average per capita consumption to remain well below the WHO minimum recommendations of 400gr/capita/day. Today, we truly have an exceptional momentum to unleash the full power of fruit and vegetables. Favourable policy drivers and strategies are being rolled out, highlighting the essential role of the most healthy and sustainable food category. And at the same time, we see that fruit and vegetables have a minimal impact on purchasing power. In the consumers' food baskets, the inflationary impact on these products has been lagging. Even more than before, now is the time to increase consumption of fruit and vegetables, to the benefit of people and planet."

Co-CEOMarc Zwaaneveld added: "These are unprecedented times. We are living the global consequences of macro-economic and geopolitical turmoil, which is affecting economies, supply chains and businesses across the globe. Despite the pressure on businesses, Greenyard has shown the ability to leverage its strong, central position in the food value chain. In the current circumstances, we notice an increased appetite in our unique and integrated ways of working. With a strengthened relative market position and unaffected profitability, Greenyard is set to reap the benefits both of increasing consumption and its unique approach to the market, as soon as the economic and geopolitical climate comes to a new normal."

Key Financials - Strong in unprecedented times

Figure 1 - Key Financials

	Key financials (in €'000 000)			H1 22/23			H1 21/22		Difference
	Sales (reported)			2 301,9		2 190,5	5,1%
	Sales (like-for-like)			2 270,2		2 115,6	7,3%
	Adjusted EBITDA			80,4		82,6	-2,7%
	Adjusted EBITDA-margin %			3,5%		3,8%
	Net result continuing operations			7,1		8,5
	EPS continuing operations (in €)			0,13		0,16
	NFD (excl. lease accounting)			328,4		338,1	-2,9%
	Leverage			2,7		2,8

Sales. Greenyard achieved a 7,3% increase in sales (on a like-for-like basis) driven by +9,0% price increases in an inflationary environment (including € +16,6m FX impact on the USD, GBP and CZK). This is partially compensated by a limited decline in volume in the Fresh segment retail business with consumption rebalancing in the post COVID period. Group reported sales increased year-on-year by € 111,4m, up from € 2 190,5m to € 2 301,9m.

Adjusted EBITDA. Despite the unprecedented economic turmoil with the highest inflation in decades, supply chain disruptions and a period of drought, Greenyard managed to keep the absolute Adjusted EBITDA approximately stable (-2,7%) at € 80,4m as compared to € 82,6m last year. The Adjusted EBITDA margin slightly decreased from 3,8% in the same period last year to 3,5% for the first six months of the financial year.

REGULATED INFORMATION - 14 November 2022, 7:45am

			3 / 10
By Segment
1 - Fresh
Figure 2 - Evolution in sales and Adjusted EBITDA
Key segment figures - FRESH
in €'000 000	H1 22/23	H1 21/22	Difference
Sales (reported)	1 911,2	1 811,8	5,5%
Sales (like-for-like)	1 879,6	1 774,5	5,9%
Adjusted EBITDA	49,3	54,5	-9,6%
Adjusted EBITDA-margin %	2,6%	3,0%

The Fresh segment achieved a sales growth of 5,9% on a like-for-like basis (or 5,5% on a reported basis), generating an additional € 105,1m in sales in the first six months of the financial year. The sales increase was mainly attributable to +8,9% sales price increases on fruit & vegetables, compensated by a limited negative volume effect of -3,0% mainly attributable to a revived out of home consumption post-COVID. This limited decline in volume underlines Greenyard's robustness when compared to the market's 10% consumption drop in Europe in fresh produce. The integrated customer relationships continue to represent 74% of sales of the Fresh segment and provide a stable financial basis for the business.

The Adjusted EBITDA decreased by € -5,2m over the same period in the previous year, or down -9,6%, resulting in a margin decrease of -43bps as the accelerating inflation of input costs could not be fully translated into sales price increases given the current high price pressure within retail and declining consumption.

2 - Long Fresh

Figure 3 - Evolution in sales and Adjusted EBITDA

Key segment figures - LONG FRESH
in €'000 000	H1 22/23	H1 21/22	Difference
Sales (reported)	390,6	378,7	3,1%
Sales (like-for-like)	390,6	341,1	14,5%
Adjusted EBITDA	30,9	28,1	9,9%
Adjusted EBITDA-margin %	7,9%	7,4%

Sales in the Long Fresh segment have increased by € 49,5m compared with the same period last year, a 14,5% increase on a like-for-like basis (or 3,1% on a reported basis). The double-digit growth is explained by an increase of +5,4% in volume with food service and industry returning back to the pre-COVID level. The volume growth is the result of growth with both established and new customers. 9,1% of the sales growth is explained by sales price increases to cover inflation affecting all cost categories i.e. energy, packaging, transport, produce and labour.

The Adjusted EBITDA increased from € 28,1m to € 30,9m by 9,9% versus the same period last year. The increase shows the impact of the volume growth and was achieved despite certain production inefficiencies caused by lower crop yields due to drought and scarcity of labour. It also includes a significant one-off recovery of previous years' contributions related to water management. The Adjusted EBITDA margin

REGULATED INFORMATION - 14 November 2022, 7:45am

4 / 10

improved by 49bps to the level of 7,9%, which is also impacted by the divestment of Greenyard Prepared Netherlands in August last year which operated at lower margins.

EBIT

EBIT amounts to € 27,3m which is -€ 4,7m compared to the same period last year, driven by the slightly lower Adjusted EBITDA and the positive result on divestitures in H1 21/22 related to the divestment of Greenyard Prepared Netherlands and Bardsley Fruit Enterprises.

Net Result

Greenyard reports a solid net result from continuing operations of € 7,1m for the first half of the financial year, compared to € 8,5m for the same period last year. In addition to the EBIT result, the finance result improved thanks to a positive result impact originating from the change in fair market value of an interest rate swap contract which is not designated as a hedging instrument partially compensated by transaction costs expensed in relation to the previous financing. On the other hand, income taxes increased slightly due to less positive deferred tax impacts in H1 22/23 compared to H1 21/22.

CAPEX

• 19,7m capex was committed in Fresh in H1 22/23, with some delays in execution due to the economy. The capex investments include the next step in the roll-out of ERP development, investments related to the improvements on the fresh box line and banana ripening expansion capacity as well as a partial renewal of new trailers in the Netherlands and new tandem trucks in the Czech Republic.

In Long Fresh, € 18,6m was committed in H1 22/23. Main project go-live was the new freezing tunnel in Greenyard Frozen France (Moréac), and commitments also include an optical sorting line for Greenyard Frozen Poland.

Financial Position

Net Debt (excluding IFRS 16 lease liabilities, and in line with the definitions in Greenyard's credit facilities) decreased to € 328,4m from € 338,1m for the comparable period of last year, despite significantly higher inflationary impact in a strong inventory build-up in the Long Fresh segment. Greenyard has also improved the financing mix thanks to the € 88,6m real estate transaction in Greenyard Prepared in Bree. The Net Debt therefore only includes € 239,8m of bank debt. This translates into a leverage of 2,7x, down from 2,8x in September 2021, despite an important increase in the Long Fresh inventory value with similar quantities at a higher price.

Thanks to its refinancing in September, as well as its lease operation at the beginning of the summer, Greenyard has liquidity to face unexpected headwinds in these uncertain times. Furthermore, Greenyard notes that 86% of its financial debt on 30 September 2022 was on a fixed rate, based on an interest rate swap structure spanning the coming 5 years. The interest rate swap was already closed at the beginning of the summer at interesting interest rates, protecting Greenyard against further interest rate hikes.

***

REGULATED INFORMATION - 14 November 2022, 7:45am

5 / 10

Greenyard Contact

Cedric Pauwels, Group Communications Director T + 32 15 32 42 00 [e-mail]

Dennis Duinslaeger, Investor Relations and Treasury Director T [phone] [e-mail]

Disclaimer

This press release may contain forward-looking statements. Such statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Greenyard is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release in light of new information, future events or otherwise, unless as required by applicable law. Greenyard disclaims any liability for statements made or published by third parties (including any employees who are not explicitly mandated by Greenyard) and does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third parties in relation to this or any other press release issued by Greenyard.

About Greenyard

Greenyard (Euronext Brussels: GREEN) is a global market leader in fresh, frozen and prepared fruit and vegetables, flowers and plants. Counting Europe's leading retailers amongst its customer base, Greenyard offers efficient and sustainable solutions to customers and suppliers through best-in-class products, market leading innovation, operational excellence and outstanding service.

Our vision is to make lives healthier by helping people enjoy fruit and vegetables at any moment, easily, quickly and pleasurably, whilst fostering nature.

With around 8 500 employees operating in 19 countries worldwide, Greenyard identifies its people, and customer and supplier relationships, as the key assets which enable it to deliver goods and services worth around €4 billion per annum.

www.greenyard.group

REGULATED INFORMATION - 14 November 2022, 7:45am