Greenyard's financials benefit from lockdown measures
Belgium-based multinational Greenyard said that it has benefited from market conditions related to the Covid-19 pandemic for some of its segments.
However, the financial benefit of increased demand is partially offset by higher costs and other challenges.
"Due to the COVID-19 quarantine measures and subsequent shift of the volumes from foodservice (out-of home consumption) to the food retailers, the demand of Greenyard’s food retail customers and partners in its Fresh and Long Fresh segments has increased strongly," the company said.
"Such increase entails additional complexity and costs in the supply chain (higher purchase prices, transport and processing prices), however, ultimately, the impact on the financial results is positive."
It said that thanks to the implementation of early, swift and group-wide coordinated safety measures, and the dedication of Greenyard’s employees, its supply, transport & logistics and main markets remain fully operational.
"The speed, transparency and efficiency of the partnership model in particular, allow Greenyard, its partners and growers to uphold a strong supply chain," it said.
"Greenyard assumes the full responsibility to secure the supply of healthy food, vital in our society, especially during this pandemic."
Greenyard's successful transformation
In addition, Greenyard said that its transformational plan is going well.
"The revitalization of volumes and margins, streamlining of the organisation and making it more efficient, a strict cost control and operational efficiency improvements in such areas as logistics, are being implemented," it said.
"Greenyard is also taking further steps into expanding its long-term partnerships."
The company expects the net sales for its 2019-20 financial year to be €4bn. Already before the Covid-19 induced volume increase, a net sales growth of around 2.4% was apparent, it said.
Greenyard had announced an adjusted EBITDA guidance between €88m - €93m, which it has now reviewed upwards to €93m - €95m
"This includes a positive effect of around € 1.5m to € 2.0m from higher volumes induced by COVID-19 effects in March 2020," it said.
"In contrast, the increased guidance also includes an exceptional unexpected negative operational result for our Fresh operation in France of around € 3.5m, due to the execution of the final steps in the Transformation Plan.
"With this in mind, the new adjusted EBITDA guidance serves as a strong base for further autonomous growth of Greenyard’s results."