Greenyard : ends financial year with solid sales growth, stronger balance sheet and increased ambition and guidance for AY 2122

Greenyard ends financial year with solid sales growth, stronger balance sheet and increased ambition and guidance for AY 21/22

Sint-Katelijne-Waver, Belgium, 15 June 2021

Key highlights

• Sales increased to € 4 416,2m, up 8,7% from € 4 061,0m. This strong result is mainly driven by the increased sales in the company's unique integrated customer model.
• Thanks to the solid sales growth, and, moreover, as a result of the existing and new efficiency initiatives, adjusted EBITDA (post-IFRS16) increased from € 133,4m, to € 156,9m, up € 23,5m (+17,6%). For ease of reference and comparison, adjusted EBITDA (pre-IFRS 16) grows from € 95,7m to € 116,6m, up € 20,9m (+21,8%).
• Without leasing debt and in line with the definitions in its credit facilities, net financial debt decreases from € 425,6m to € 339,9m, resulting in a Leverage of 2,9x. A strong cash mindset in combination with balance sheet strengthening measures such as the refinancing of the debt and the € 50,0m capital increase resulted in this swift deleveraging.
• Based on the acceleration in performance in the last quarter, and on current forecasts, Greenyard estimates its adjusted EBITDA (post-IFRS16) for AY 21/22 to grow towards € 165,0m versus its € 160,0m adjusted EBITDA (post-IFRS 16) initial guidance (for ease of reference, € 120m adjusted EBITDA on a pre-IFRS 16 basis). In relation to the divestment of Greenyard Prepared Netherlands, the Group has decided not to make an adjustment to its adjusted EBITDA guidance and ambitions for this divestment, so it is included in the increased guidance. Without leasing debt, the Group's leverage is expected to decrease towards 2,5x by the end of AY 21/22, amongst others supported by the € 17,0m equity value to be received for the divestment of Greenyard Prepared Netherlands.

Interested parties are invited to listen in on a live webcast today by visiting the following link: https://globalmeet.webcasts.com/starthere.jsp?ei=1471195&tp_key=da5df4c192. The call will begin promptly at 2.00 p.m. (CET). A replay of the call will be available on Greenyard's Investor Relations webpagein the coming days.

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2020/2021 results: a milestone year for Greenyard

Deepened long-term relationships with customers and growth in convenience

The acceleration in sales is driven by the ramp-up of the integrated customer models in its Fresh segment, further developing and growing long-term relationships with Europe's largest retailers. In addition, the Long Fresh segment increased its convenience and (frozen) fruit sales.

Healthy lifestyles and mixing categories

These achievements are complemented by a consumer trend of increased awareness to maintain a healthy lifestyle. This resulted in a higher fruit and vegetables spend per capita. At the same time, consumers more frequently combine different categories of fruit and vegetables.

Both market evolutions play into Greenyard's long standing strategy to be a driving force towards healthier lifestyles and more sustainable food value chains. This is achieved thanks to the Group's complementary offering (Fresh, Frozen, Prepared) and its unique position in the food value chain, allowing the company to provide healthy choices to consumers, regardless of the occasion, time or consumption moment, and this while guaranteeing the shortest possible food chain.

Exceptional network of growers and clear sourcing strategy

In order to secure short supply chains, Greenyard is cooperating closely with its growers, by constantly building partnerships with a solid and global network of dedicated growers, ensuring quality and quantity of the products for its customers, all year round. A Group sourcing program has therefore been initiated. This program will allow the Group to further build commercial programs and create efficiencies, by using the Group's scale and experience.

Continuous improvement for increased efficiency

Moreover, Greenyard executed its efficiency improvement plans, tackling, among others, transport flows and contracts, waste reduction and energy saving initiatives, and direct cost optimisations. These efficiency improvements equally integrate sustainability as a key element in the Greenyard culture, by embedding it in its core operations and decision-making processes. These initiatives have already proven to bolster the Group's adjusted EBITDA margin over the past year. While Greenyard turns the page on its Transformation Plan, the continuous improvement program will continue to support Greenyard's ambitions in EBITDA growth.

Strong financials and stability for solid strategy roll-out

Lastly, Greenyard has strengthened its balance sheet by reducing nominal debt and improving the leverage ratio to 2,9x (pre-IFRS 16), thanks to the renewed three-year bank financing that was executed at the end of March 2021, alongside the € 50,0m capital increase. The new three-year financing also provides for a committed € 125,0m tranche dedicated to the refinancing of the outstanding convertible bond, due to mature in December 2021. The new financing provides once more a stable and secure funding for Greenyard for the coming years to execute on its ambitions and growth plans.

Quote of the co-CEOs:

Hein Deprez, co-CEOsaid today: "Health is on everyone's agenda, even more so today. For Greenyard,

this is logical: fruit and vegetables play a vital role in moving towards healthier lifestyles. Therefore, we consider it our responsibility to ensure that these products remain available for our consumers, regardless of the challenges and complexities the pandemic created. Together with our partners, we did so successfully, and we now look beyond that point. The intimate and integrated relationship we build with

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our customers, ensuring a short supply chain, and the products we develop together with them, contribute to our goal to improve life, as they cater for more diversity, choice, convenience and quality in the fruit and vegetable assortment."

Marc Zwaaneveld, co-CEOadds: "We had a strong year, on all aspects. The Group's organisation has been tailored and the mindset and culture changed, to meet the changing needs of our customers and end- consumers. The capital structure has been strengthened and the volatility of the profitability significantly reduced. Our performance of AY20/21, the role we have in the food value chain and our scale, are the excellent foundations to accelerate on our ambition to become a driving force for healthier lifestyles and more sustainable food supply chains. Together with all partners in the food value chain, from grower to consumer, we will take the challenge to improve life. Both of the people, and the planet."

Solid topline growth, sustained profitability and deleverage below 3,0x net financial debt/LTM adjusted

EBITDA

Sales. Overall net sales amounted to € 4 416,2m, indicating an increase of 8,7% YoY.

• Fresh sales amounted to € 3 592,7m, showing double-digit growth (+10,1%) versus € 3 263,4m last year (€ 329,3m), whereby sales with integrated customers increased by 22,3% including the ramp-up of some of the latter relationships. In most geographies, parallel to an increasing awareness of consumers for healthy lifestyles, retailer volume was stimulated by COVID-19 induced measures of different local authorities.
• Long Fresh sales increased to € 823,5m, up € 25,9m from € 797,6m (+3,2%), driven by an important volume increase in retail, new sales contracts and better product mix, partially offset by a temporary loss of volumes in food service (from 20% share of Long Fresh sales in AY 19/20 to 13% in AY 20/21), induced by the quarantine measures related to COVID-19, resulting in a shift from out-of-home consumption to at-home consumption.

Adjusted EBITDA recovered. Greenyard's adjusted EBITDA (post-IFRS 16) amounted to € 156,9m. Greenyard did not record any EBITDA adjustments in relation to COVID-19, as margins from extra volumes were more or less compensated by extra costs.

The strong increase of € 23,5m YoY (+17,6%) is attributable to the following elements:

• Fresh: The adjusted EBITDA (post-IFRS 16) continued to grow to € 95,1m from € 76,3m, up € 18,8m (+24,6%), mainly related to strong volume growth realised under the integrated customer relationships. With +70% of Fresh sales earned in a long-term integrated customer relationship, Greenyard secures the future stability of the margin. In addition, the full year impact of the transformation initiatives initiated in the previous year as well as newly defined initiatives in the reporting year, including a strong cost control, workforce resizing, efficiency improvements and waste control contributed to the strong margin development of the Fresh segment.
• Long Fresh: the adjusted EBITDA (post-IFRS 16) amounted to € 62,6m for AY 20/21 versus € 58,4m last year (+7,1%). The further growth is the result of a relentless focus on efficiency improvements, a positive impact of new sales and purchase contracts and an increasing share of sales in higher end products (higher margin convenience and fruit representing around 30% of Long Fresh sales).

For ease of reference and comparison, excluding IFRS 16 impact, adjusted EBITDA amounted to € 116,6m, an increase of € 20,9m YoY (+21,8%).

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• EBIT. EBIT from continuing operations amounted to € 51,5m, compared to a loss of € -2,6m last year, driven by top line growth and cost and efficiency improvement measures in combination with lower non- recurring adjustments (€ 5,5m versus € 28,4m last year).
• Net result. Net result from continued operations returns to a profit of € 1,2m, reversing last year's loss of € -68,0m.
• Net financial debt reducing. Without leasing debt and in line with the definitions in Greenyard's credit facilities, net financial debt (NFD) decreased further by € 85,7m to € 339,9m at 31 March 2021. This translates into a Leverage of 2,9x, down from 4,4x in March 2020. Operationally, the decrease is driven by an increase in operating profit and an active Group-wide working capital management, whilst continuing to invest in the operations and the integrated customer model. Post-IFRS 16, at 31 March 2021, net financial debt (post IFRS 16) amounted to € 572,9m of which € 232,9m lease liabilities.
• Bolstered its capital structure through a refinancing and capital increase. Greenyard has succeeded in refinancing its outstanding bank debt in March 2021 for another three years through its new Amended and Restated Senior Facilities Agreement, which was concluded for a total amount of € 467,5m, including a separate € 125,0m term loan tranche for the repayment of the outstanding € 125,0m convertible bond, maturing in December 2021. In addition, it executed a capital increase for an amount of € 50,0m in March, accelerating Greenyard's deleveraging steps towards a sustainable leverage between 2,0x and 2,5x net financial debt/ LTM adjusted EBITDA ratio within 2 years' time.
• Dividend. The Board of Directors will propose not to pay a dividend for AY 20/21.

Figure 1 - Key financials

	Key financials (in €'000 000)	AY 20/21		AY 19/20		Difference
	Post-IFRS 16 key financials
	Sales			4 061,0		8,7%
	4 416,2
	Adjusted EBITDA (post-IFRS 16)	156,9		133,4		17,6%
	Adjusted EBITDA-margin % (post-IFRS 16)	3,6%		3,3%
	Net result continuing operations	1,2		-68,0
	EPS continuing operations (in €)	0,01		-1,59
	NFD (post-IFRS 16)	572,9		660,1		-13,2%
	Pre-IFRS 16 key financials
	Adjusted EBITDA			95,7		21,8%
	116,6
	Adjusted EBITDA-margin %	2,6%		2,4%
	NFD	339,9		425,6		-20,1%
	Leverage	2,9		4,4

Sales increased by 8,7% to € 4 416,2m in AY 20/21. The growth in sales is coming from both the Fresh and Long Fresh segments. The increasing volumes linked to the intensification and ramp-up of the integrated customer models are the main driver of this growth. At the same time, thanks to increased consumer awareness to maintain a healthier lifestyle, and a shift to at-home cooking, due to lockdowns consequent to COVID-19, the retail volumes increased. This was however at the expense of the food service sector which significantly slowed down.

Organic growth amounted to 9,9%, slightly counterbalanced by foreign exchange headwinds (-0,8%) and the effect of the recent divestitures and divestments (-0,4%).

Also adjusted EBITDA (post-IFRS 16) shows a strong increase by 17,6% to € 156,9m, (for reference, pre-IFRS 16 increased by 21,8% to € 116,6m) directly linked to the growing volumes under the integrated customer

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models, positive price and mix variances as well as the full year impact of transformation initiatives initiated last year and new continuous improvement actions being implemented mainly in the domains of sourcing, transport and procurement. Greenyard did not record any EBITDA adjustments in relation to COVID-19, as margins from extra volumes were more or less compensated by extra costs incurred to secure sourcing and operations.

Net result from continued operations shows the return to profit of € 1,2m versus a loss of € -68,0m last year. This improvement is mainly driven by the operational and commercial transformation, moreover, last year was highly impacted by impairments/losses on sale of subsidiaries and non-recurring transformation costs.

Without leasing debt, net financial debt decreased further by € 85,7m to € 339,9m at 31 March 2021. This translates into a leverage of 2,9x, down from 4,4x last year. The decrease is driven by an increase in operating profit and an active Group-wide working capital management, whilst continuing to invest into the operations and long-term commercial relationships. As to indebtedness and leverage, Greenyard succeeded in securing a stable financing for the coming years by refinancing its bank debt in March 2021, including a capital increase of € 50,0m and a reserved tranche of € 125,0m for the repayment of its outstanding convertible bond, maturing in December 2021.

Post-IFRS 16, at 31 March 2021, net financial debt amounted to € 572,9m of which € 232,9m lease liabilities.

Segment review

1. Fresh

Figure 2 - Sales and adjusted EBITDA evolution

Key segment figures - FRESH

	in €'000 000		AY 20/21		AY 19/20		Difference
	Post-IFRS 16 segment figures
	Sales			3 263,4		10,1%
		3 592,7
	Adjusted EBITDA (post-IFRS 16)		95,1		76,3		24,6%
	Adjusted EBITDA-margin % (post-IFRS 16)		2,6%		2,3%
	Pre-IFRS 16 segment figures
	Adjusted EBITDA			43,4		37,4%
		59,6
	Adjusted EBITDA-margin %		1,7%		1,3%

Fresh sales increased by +10,1% YoY, whereby sales within the integrated customer model increased by 22,3%, including the ramp-up of some of these more recent long-term relationships. Retail sales growth was in most geographies stimulated by COVID-19 induced measures of different local authorities, resulting in a shift to at-home cooking, in parallel to increased consumer awareness to maintain healthy lifestyles.

The segment showed an organic growth of +11,2%, with slight foreign exchange headwinds of -0,6%, and M&A and divestitures impact of -0,5%.

Greenyard was able to accelerate the positive trend in its adjusted EBITDA by realising efficiency gains on the back of strong topline growth, reinforced by the full year impact of the transformation initiatives initiated in the previous year as well as newly defined continuous improvement actions in the reporting year. Together with volume growth, this has resulted in a clear recovery of the margin from 2,3% to 2,6%. The adjusted EBITDA (post-IFRS 16) increased by +24,6% YoY.

REGULATED INFORMATION - INSIDE INFORMATION - 15 June 2021, 7.45am