Greenyard Performance Analysis
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Greenyard, on the road to recovery?

Floris van der Pijl published on September 9, 2022

A-INSIGHTS is specialized in analyzing company figures, which captures detailed information on the activities of companies and explains the drivers behind their performance. This blog contains a combination of financials and news sources.

  • Net sales development (2021): below average
  • Operational profit (2021): below average

In 2018, news broke that one of the largest fruit and vegetable supplier for retailers in Europe, Greenyard, was struggling with its debt position. Market pressures combined with unexpected events led to a loss, forcing the company to take measures. Did these measures have the desired effect? And what does the way forward look like?

Greenyard is working hard to reduce its debt

Greenyard has taken several measures, including restructuring its core business, abandoning value chain integration ambitions by selling its newly acquired horticultural business (+ €120 million), divesting non-performing assets such as its Hungarian frozen food division and its Dutch preserved vegetable division (+ €100 million), and recently selling and leasing back its processing facility in Belgium (+ €90 million). To further reduce debt, the company also plans to divest its fresh business in the UK (€70 million sales).

More importantly, Greenyard has already achieved a turnaround in 2019, and through yearly improvements, the company is achieving an operating profitability (EBIT) of 1.3% in 2021. But the company still has work to do. With more than €30 million in interest payments and only €60 million in operating profitability (excluding interest), a large part of the company's profits in 2021 will go to interest.

Greenyard Net Sales DevelopmentFigure 1: Greenyard's net sales development vs. the European fruit and vegetable trader landscape

Room to improve profit margins

Greenyard has already reduced its debt load from €785 million (2019) to €627 million (2021) and is taking additional measures (such as divestments and sale-and-lease-back constructions) to reduce it further. Moreover, with market profitability for traders consistently above 2%, there seems to be room for Greenyard to further improve its margins. And since the company also has approximately 20% of its business in processing, of which the market average profitability is 3-4%, improving profit margins is not unrealistic.

Greenyard EBITFigure 2: Greenyard's %EBIT vs. the European fruit and vegetable trader landscape

Is Greenyard on the road to recovery?

Greenyard seems to be on its way, slowly but steadily. The company is positioning itself as an integrated supplier ('Integrated Customer Relationships') for retailers and it now has 74% of sales with its top 10 clients, up from 66% in 2018. Greenyard's main growth focus seems to be to supply these customers with a broader variety of products (fresh, frozen and prepared). With trends towards health and convenience, Greenyard could well be in the driver seat here.

Greenyard Sales to top 10Figure 3: Greenyard's % of sales to top 10 largest customers

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* To make a comparison to the industry, we analyzed the 50 largest fruit and vegetable traders in Europe.

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Floris van der Pijl

Associate / floris.van.der.pijl@a-insights.eu