06/06/2017: Greenyard announces FY 2016-2017 results

Sint-Katelijne-Waver, Belgium, June 6, 2017 - Greenyard (Euronext Brussels: GREEN) announced its FY results ending March 31, 2017

• Sales1 were up 7,1% YoY to € 4.249,2m. Growth came mainly from internal growth (5,3%) and M&A (2,7%) with FX being slightly negative (-1,0%):

  • Fresh' sales grew by 5,4% largely thanks to growth in the German and Dutch market

  • Long Fresh' sales were up 15,8% supported by internal sales growth (2,1%) and the incorporation of Lutèce (16,7%)

  • Horticulture sales were up 3,7%, mainly internal (3,1%)

• REBITDA1 increased by 7,0% to € 145,7m. The improvement of € 9,5m is primarily driven by:

  • Fresh improved by € 3,8m thanks to top line growth in core markets and improved logistic operations partly offset by the lack of volumes in Q4, impacting operating leverage, and the UK operations

  • Long Fresh reported a strong improvement of € 4,9m driven by an improved portfolio management, mainly in Frozen, overall volume growth as well as efficiencies. This was slightly compensated by the adverse weather conditions and the ongoing price pressure in Prepared

  • Horticulture's profitability enhanced thanks to an improved product mix and continued cost focus, hereby lifting margins to 13,2%

• Net result came in at € 0,7m. Excluding one-off costs net adjusted result came in at € 21,9m. This translates into an EPS of € 0,02 and an adjusted EPS of € 0,51

• Net financial debt (NFD) dropped by € 58,7m YoY to € 324,2m. This translates into a leverage of 2,2x, down from 2,8x last year and 2,7x in September 2016. The improvement was driven by operational cash flow as well as a reduction in working capital. Moreover, a significant part of the share buyback program, announced in March, resulting in a repurchase for a total consideration of € 16,4m, is included in this number

• The realised cash tax savings amounted to € 1,3m

• In December of last year, Greenyard realised a refinancing which is anticipated to save more than € 15m per annum

• Greenyard's Board proposes to keep the dividend stable at € 0,20/share

'Greenyard had a healthy performance with strong sales and REBITDA growth, which was realised in its core markets and with the acquisition of Lutèce. Moreover, the balance sheet improved with a significant drop in net financial debt, improvements in working capital and interest costs savings. Combined with the increased REBITDA, leverage decreased as well. This was achieved including the one off costs of the refinancing. The latter was realised with the launch of a convertible bond combined with bank debt and will annually save at least € 15m in interest costs.

We continue to focus on our strategic priorities to drive profitable growth. We aligned the group behind a common mission, vision and values and one single company name, Greenyard. We launched a number of projects to propel future top line growth and reduce our cost base going forward. In Fresh, new distribution centers have been built in Germany, Belgium and the US. In Frozen, a new factory became operational in Poland. In Prepared we invest in the integration of Lutèce. We also put in place the right organisation to realise cost synergies. Importantly, we strengthened corporate HR to drive talent development hereby realising future growth.

To conclude, we are confident Greenyard has the right strategy and priorities in place to generate profitable growth and strengthen further our position as a global leader of fruit & vegetables in all its forms.'

Segment review

1. - Fresh Figure 2 - Sales & REBITDA evolution (in € million) FY 15/16 1 FY 16/17 YoY

   Sales 3.248,8 3.425,8 5,4%

   REBITDA 75,4 79,2 5,1%

   REBITDA margin 2,3% 2,3%

   Top line of Fresh grew by 5,4% with an internal growth of 6,0%. This growth is driven by strong performances in the German and Dutch markets. Growth markets showed a mixed picture. The UK was impacted by the Brexit, resulting in a difficult retail pricing environment. France and the US, however, continued to grow ahead of Fresh' overall sales growth.

   The slowdown compared to H1 is mainly explained by the cold weather conditions in Q4, resulting in shortage of produce. As was the case in H1, pricing continued to contribute positively, with ongoing strong product mix improvements, driven by robust demand in exotics, Ready-To-Eat and mixes. Volumes were in negative territory due to the shortages in Q4.

   REBITDA grew by 5,1% with flat margins at 2,3%. The improvement of € 3,8m is driven by the German and Dutch market and the ongoing improvement in the logistic operations. However, this was compensated by the Q4 shortages. Also the UK retail price and margin pressure impacted margins, mainly during Q3 and Q4.

2. - Long Fresh Figure 3 - Sales & REBITDA evolution (in € million) FY 15/16 FY 16/17 YoY

   Sales 646,1 748,3 15,8%

   REBITDA 51,6 56,5 9,6%

   REBITDA margin 8,0% 7,6%

   Long Fresh realised a strong top line growth largely driven by the acquisition of Lutèce, which was acquired March 31, 2016. The consolidation of Lutèce lifted sales by almost 17%. Internal growth contributed positively to top line (+2,1%) mainly driven by an improved price/mix. Price/mix continued to be driven by the Frozen operations whereas the pricing environment in Prepared improved but still contributed negatively. The impact of currencies was negative (-3,0%), explained by the weakening of the GBP.

   After a slight drop in H1, REBITDA improved materially in H2 (+23,4%) resulting in a FY rise of almost double digit. The increase is the result of ongoing improvements in product mix (mainly Frozen), enduring cost efficiencies, a recovery of the situation in Moréac and the contribution of Lutèce. This was somewhat compensated by difficult production yields (adverse weather) as well as the above-mentioned price pressure within Prepared.

3. - Horticulture

Sales 72,4 75,1 3,7%

REBITDA 9,2 9,9 7,7%

REBITDA margin 12,8% 13,2%

Whereas sales in H1 dropped by 2,5%, this was more than compensated by a strong H2 (+10,3%) lifting FY sales by 3,7%. The majority of this growth is internal (3,1%), driven by ongoing strong demand for new, innovative products combined with growth in Poland and Belgium. In H2, Horticulture significantly expanded its sourcing thanks to the acquisition of Nesterovskoye in Russia, aimed at securing future growth. This acquisition impacted top line by 0,6%.

REBITDA increased by 7,7% whereby the margin improved by 40bps to 13,2%. The drivers of this improvement are an enhanced product mix, lower transportation and ongoing tight cost control.

Non-recurring items amounted to € -8,2m compared with a positive € 3,4m last year explained by the badwill of Lutèce. As such, the impact on EBIT is significant YoY with a € -11,6m swing factor. The main constituents within restructurings & write-offs relate to the centralisation of the Fresh Direct activities, part of Fresh, in Sint-Katelijne-Waver, announced in April of last year. The remainder relates to other non-recurring operational items.