Greenyard names head of "transformation team" co-CEO

Greenyard names head of "transformation team" co-CEO

Greenyard, the Belgium-based vegetables products supplier looking to sharpen its performance amid pressure on sales, is to have two co-chief executives.

Marc Zwaaneveld, who Greenyard hired last month to head a "transformation team" to work on price, quality and service levels, will join chief executive Hein Deprez as co-CEO.

Greenyard is facing pressure on sales and margins amid what it calls "continued pressure in the food retail landscape", particularly in Belgium and Germany.

In a stock-exchange filing today (12 February), Greenyard said "the initial validation" of the "turnaround programme" led by Zwaaneveld "positively shows substantial areas for improvement to contribute to next fiscal years' results".

The filing added: "In order to execute this in the best possible way, the board of directors appointed Marc Zwaaneveld as co-CEO, alongside Hein Deprez."

The company said Deprez, its main shareholder, would "further focus on the roll-out of Greenyard's strategic partnership model with its retailers".

Zwaaneveld, who headed Dutch waste management group Van Gansewinkel for three years before it merged with UK-based Shanks Group in 2017, "will guarantee an embedded, efficient and seamless implementation of the transformation plan throughout the company, allowing for a fast and efficient revitalisation of Greenyard", the filing said.

"After a first analysis of improvement areas together with an external consultancy firm, Greenyard is now preparing concrete action plans while executing first savings. Finally, Greenyard is also taking next steps towards funding options, as announced recently."

At the end of January, alongside Zwaaneveld's appointment, Greenyard suggested it may look to raise additional capital even after disposing of its horticulture business last year to investment fund Straco for EUR120m (US$135.8m). Among the options on the table is a capital increase.

The Brussels-listed firm added sales were lagging behind last year by 4.5% and it consequently adjusted its REBITDA outlook to a range of EUR60-65m.

In the year to the end of March 2018, Greenyard's REBITDA was EUR140.2m, down 3.8% on a year earlier. The company's net sales fell 1.7% to EUR4.18bn.

Speaking to analysts after the announcements of Zwaaneveld's appointment and establishment of a "transformation team" at the business, Deprez said a "competitive landscape" in the sector was leading to continued "price pressure".

"In addition, we see increasing quality and service requirements from retailers which influences additional costs and higher waste levels. At Greenyard we strongly believe that it is beneficial for all parties in the value chain from grower to supplier to retailer and to consumer to implement a way of working that is more efficient and results in the products spending less time in the chain," Deprez said on 28 January.

"Unfortunately we are not there yet. We are feeling the impact of the prolonged market pressure on our profitability. That being said, we are taking the right measures both in the medium term and in the short-term. We are developing a comprehensive transformation plan that will secure commercial achievements, an acceleration of medium-term projects and align our cost base."

Greenyard believes competition for retail contracts can lead to price pressure, lower quality and waste. It wants to form "partnerships" with its retail customers, Deprez said.

"Greenyard is further transitioning its organisation into a vertically integrated partner for its retail customers. This implies an important change for Greenyard and retailers. Greenyard strongly believes that the fruit and vegetable markets of the future will be operating more efficiently by a limited number of large players that partner closely with their customers.

"In the short-term, this brings challenges and requires a new way of working in the market. However, in the longer term the partnership model will reduce waste improve quality for the consumer and improve margins in the value chain. In conversations with retailers over the past months, we feel positive momentum that may and will lead to a further partnership and building these intense relationships."