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Interview with Vion

Food for Thought: Treasury supports the Vion’s business plan with A/R financing

Mattijn Bak, Director, Group Treasury, Vion, joined two years ago. Short term goals where to increase transparency (by amongst other initiatives implementing a new TMS and revising the internal finance structure) and refinancing the EUR 125 mio receivable purchase borrowing base facility. This to ensure Vion could focus on its new business plan.

In the early 2000s, the Vion Food Group expanded its operations rapidly through acquisitions, both foreign and domestic. A turning point was reached in 2012, when the financial situation of Vion compelled it to focus on its core activities and core markets. A series of divestments followed in subsequent years. Today,  Vion is an international meat producer with production locations in the Netherlands and Germany. The product portfolio of the Group includes fresh pork and fresh beef, and derived products for retail, food service and the processed meat industries.

Mattijn Bak left Sperwer Group to join Vion in September 2015 as its new Director of Group Treasury. At approximately the same time, Francis Kint, the new chief executive (CEO) and Joost Sliepenbeek, chief financial officer (CFO) joined Vion. This brought new focus and stability to the organization that resulted in a new business plan.

The new business plan focuses on continuously improving the infrastructure and results. The industry calls for state-of-the art infrastructure to guarantee food safety and competitive cost structure. Examples are a new beef slaughterhouse in Leeuwarden and large investments in Apeldoorn, Vilshoven and Landshut but also the closing of Zeven. By working and investing to make itself more efficient, Vion is creating benefits for the entire chain and industry, not the least so for the primary (farming) sector. The same accounts for the financial supply chain. Vion invested in creating transparency by implementing a new Treasury Management System, revising its internal financing structure, creating more transparency in its FX exposure and the methods to hedge this exposure.

On the back of these improvements and especially the business plan, Vion Treasury organized a new EUR 200 mio borrowing base facility at better lending terms and in return for the supporting banks the multi-billion cash management business of the beef, pork and Food Service divisions.

The key area in which Treasury could support the business plan was through a borrowing base (accounts receivables) facility since Vion’s need for funding is largely based on the fact that they finance part of the value chain. Suppliers (mainly farmers) are paid much sooner than the customers pay Vion. This difference in payment terms determines the need for funding. The height of this funding need depends (apart from payment terms) on the meat prices. However, when the meat price increases, so will the receivables and thus the borrowing base.

Vion, together with Orchard Finance and one of the supporting banks, designed a factoring-like financing model whereby some of Vion’s receivables are pledged and used as a borrowing base. This provides the lender sufficient security and at the same time enables flexible funding, resulting in a facility which matches Vion’s business process. Vion Treasury ensured that the facility offers sufficient liquidity to focus on the execution of the business plan and its core activities, even when margins deteriorate during a certain period.

Other initiatives of the treasury team also fitted within the new business plan which focuses on transparency and efficiently. Besides the improvements in the lending conditions, Vion increased its transparency and efficiency by centralizing its treasury activities through Vion Financial Services. This entity manages the intercompany transactions and replaced the bilateral loans between subsidiaries, but also manages Vion’s FX exposure. The business plan, the financing arrangements to execute the plan together with the initiatives of the treasury department provide us with a solid foundation to be successful in the years to come.”


Headquartered in Boxtel, the Netherlands, Vion is an international meat producer with slaughterhouses and production locations there and in Germany, plus sales support offices in 14 other countries worldwide. It has three divisions, delivering pork, beef and food services. It has 11,507 employees, including flexible workers, and last year processed 309,808 pigs and 17,712 cattle per week.

Net turnover was €4.7bn but earnings before interest, tax, depreciation and amortization (EBITDA) were only €60m last year, although this is a 34% improvement and a possible sign of the company’s recovery after struggling with high debt and low margins in the meat processing industry. Equity and solvency in the business improved in 2016 to 44.1%. Banks own the rest on a declining scale as the recovery plan is implemented.

Vion’s ownership structure is complicated. It is an unlisted company with one indirect shareholder, NCB Ontwikkeling, which is affiliated with the Southern Agricultural and Horticultural Organisation (ZLTO). This is a co-operative type association for entrepreneurs working in agricultural sectors and has approximately 15,000 farm members in the Netherlands regions of Noord Brabant, Zeeland and the southern part of Gelderland. The unique Dutch ownership structure essentially means that if members of the co-operative leave they don’t get paid, so they’re committed to the recovery plan in the long-term.

The 6-person treasury team at Vion is fairly centralized with the Euro as its home currency and cash and foreign exchange (FX) management handled at the Boxtel HQ by Bak, a financial controller, and three operations people, including an insurance specialist. One operations employee is based in Germany . It operates a shared service centre (SSC) for payments.