Validation of turnaround plan for producer of shelf-stable products

Situation

The Company, a Dutch family-owned business that produces shelf-stable fruit and vegetable products and supplies major European supermarket chains, saw liquidity pressure increase. Contract terms and customer call-off behaviour placed a significant share of inventory and price risk with the Company. As the Company’s results came under pressure, rising inventories simultaneously led to a sharp increase in working capital requirements.

Solution

At the Company’s request, Beaufort analysed the business model and financial position and benchmarked them against competitors. In addition, Beaufort identified the main drivers behind the underperforming results and validated the multi-year turnaround plan. Beaufort concluded that the direction taken is sound, but that the turnaround ambitions are ambitious and that additional, more decisive measures are required to structurally improve profitability and liquidity. Beaufort provided concrete recommendations, with an emphasis on fundamental choices in the cost base and the product portfolio.