The Dutch fruit and vegetable sector had to contend with the negative consequences of the long, hot and dry summer in 2018. Many product groups were affected by the extreme weather which resulted in higher costs in the supply chain owing to smaller volumes, poorer quality and sharp fluctuations in supply and demand. This had a substantial impact on business operations and, consequently, on The Greenery’s financial results in 2018.
The gross contribution (net turnover minus cost of sales and subcontracted work) increased by EUR 2.9 million as a result of an improvement of 0.5% in the gross margin. However, the positive effects were cancelled out by the negative impact of the extreme summer weather and increased competition, particularly in Germany and was insufficient to cover the higher costs. As a result, in part, of pay rises required under the collective labour agreement (CAO), higher pension costs and additional use of temporary staffing, the EBITDA decreased from EUR 16.7 million in 2017 to EUR 4.5 million in 2018.
At 55.9% of the balance sheet total (2017: 58.5%), the capital base remains at an acceptable level.
Focus on digital future
The Greenery made significant progress in 2018 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. This requires a different approach to cooperation and a flexible, agile organisation. 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.
Outlook
In 2019, the focus will be on implementation of the new commercial strategy and the associated organisation. This strategy is based on growing the business by putting the client centre stage.
Cooperation with UK firm APS will be stepped up and built on, enabling further growth to be achieved in the UK market. This growth may be temporarily disrupted by the events of the Brexit process.
Two important logistical projects will be completed in 2019. The third (and final) phase of the construction of the new Retail DC (DC: distribution centre) in Barendrecht will be completed in the first half of the year. The activities of the DC in Bleiswijk and the Naturelle DC in Barendrecht will then be integrated in this Retail DC, thus completing in full the logistics optimisation that began in 2014. In addition, the new office and DC for subsidiary Hoogsteder in Bleiswijk are scheduled for completion in mid-2019. All of the Hoogsteder Group’s units will be brought together in this new facility, giving it space to achieve its growth plans.
In 2019 too, The Greenery Group will continue its focus on achieving profitable revenue growth and controlling costs.