The Greenery reports disappointing year for net profit, announces future plans

April 12 , 2019

Dutch fruit and vegetable company The Greenery reports a notable decrease in both its net turnover and net profit for 2018 from the previous year.

Specifically, its net turnover fell €11.3 million (USD$12.7 million) from 2017, resulting in a final total of EUR€991.9 million, while its net profit fell over €10 million, giving it a final figure of €2 million.

According to The Greenery, the drop is partly the result of the year’s extreme summer weather. Many product groups were negatively affected by the long, hot season, experiencing higher costs in the supply chain due to the industry’s smaller volumes, poorer quality, and sharp fluctuations in supply and demand.

This had a substantial impact on business operations and, consequently, on The Greenery.

Another factor in the company’s latest financial results was increased competition, particularly in Germany.

2017, on the other hand, was more lucrative due to a number of “one-off gains,” says the company. For example, The Greenery invested in new (online) clients and programmes, the construction of new distribution centers for The Greenery and one of its subsidiaries (Hoogsteder), staff training, ICT infrastructures, and digitization.

While the company’s gross contribution (net turnover minus cost of sales and subcontracted work) increased by EUR€2.9 million in 2018, this was not enough to make up for the year’s losses and was insufficient to cover The Greenery’s higher costs.

Unfortunately, this meant pay rises required under the collective labor agreement (CAO), higher pension costs, the additional use of temporary staffing, and EBITDA were all slashed – the current total (decreased €4.5 million) less than a third of what it was in 2017.

As for the capital base, at 55.9% of the balance sheet total (2017: 58.5%), it remains at an acceptable level.

Still, The Greenery says it made “significant progress” last year with the implementation of its ‘Growing Together 2022’ strategy.

“A digital vision was developed, which relates to the strategic objective of becoming digital supply chain manager, and the transition from a supply-driven organisation to an organisation that responds rapidly to market opportunities,” explains the company.

“In this vision, the company makes a distinction between new digital solutions for clients, enhancing clients’ and growers’ digital experiences and using digitisation to make processes more efficient and faster.

“The initial results are already evident with the introduction of a new digital growers’ portal, the first steps towards developing a new client portal, which will be ready for use in 2019, and the developments in the field of robotisation,” it adds.

When it comes to 2019, the company says it will implement this new commercial strategy.

It plans to continue cooperating with UK firm APS in hopes of enabling further growth in the UK, though it’s wary of possible disruptions caused by events of the Brexit process.

Finally, The Greenery says it will complete two important logistical projects this year – the final phase of construction on its new distribution center (DC) in Barendrecht and the completion of the new office and DC for subsidiary Hoogsteder in Bleiswijk.

The latter facility will serve an important role – all of the Hoogsteder Group’s units will be brought together here, giving it space to “achieve its growth plans”, says the company.

It expects to finish the Barendrecht DC by the first half of 2019 and the second construction project in Bleiswijk around the middle of the year.

 

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