Screening of an organic producer of fruit crops on behalf of the shareholders.
A producer of organic fruit crops wanted to further develop and distinguish himself in the field of sustainability, for example by using less energy and 'greening' the energy where possible. Investments were made in sustainable systems and it can be said that the production can now be counted among the greenest in the world.
|The investments led to higher costs than expected. Furthermore, the investments were financed with loan capital, for which interest and redemption had to be paid. The company's profits fell significantly and cash flow also became negative. Without measures, the future of this sustainable company was uncertain. In consultation with its financier, we were asked to examine the company and work out possible options for the future.|
We made a comparison between the original assumptions in the sustainability plan and the actual results. We also held discussions with the management and other parties involved to test the assumptions. By taking an independent look at the situation as an outsider, which is familiar to the sector, it was possible to identify the bottlenecks relatively quickly and to determine how they could be resolved.
After the quick-scan it was clear what the causes of the current situation were and how the company could be made profitable again in the short term. In addition, we mapped out which measures need to be taken in order to generate sufficient profit in the longer term, in such a way that both financiers and owners can achieve an acceptable return. Moral of the story: investing in sustainability can be a great option, but the business case needs to be fully developed. This means not only focusing on sustainable business practices, but also paying constant attention to the financial and organisational consequences of such a programme. After all, even a green company has to make a sufficient profit at the end of the day.