JDE Peet’s reports half-year results 2023
Focus and disciplined execution of strategy, leading to
in-market outperformance
PRESS RELEASEAmsterdam, 2 August 2023
Key items1
- Organic sales up +3.5% (+2.4%
reported), driven by +6.8% price and volume/mix of -3.3%
- Organic gross profit up +0.9% and
high single-digit growth of advertising spend
- Organic adjusted EBIT down -3.0% to
EUR 581 million
- Free cash flow of EUR 14 million due
to normalisation of working capital; net leverage at 2.8x
- Underlying EPS of EUR 0.85
- FY 23 outlook updated
A message from Fabien Simon, CEO of JDE
Peet’s
"In the first half of 2023, we delivered resilient financial
performance in a category that is globally adjusting in the
aftermath of the pandemic, and coping with persistent inflation.
Against this backdrop and despite an industry volume decline in
Europe, we delivered mid-single-digit top-line growth, driven by
our premium product portfolio, E-commerce acceleration and strong
performance in the US and in emerging markets.
We continue to be guided by our renewed strategic framework to
become more global, more digital and more sustainable. We are now
very pleased to witness the in-market outperformance of JDE Peet's
globally from the disciplined execution of our strategic
priorities.
In a fast evolving environment, we remain focused and nimble. In
the first half of 2023, we have initiated the transition of an
omni-channel organisation in Europe, and towards a local portfolio
in Russia. In parallel, we will increase our global consumer reach,
with the intended acquisition of Maratá's coffee & tea platform
in Brazil and the launch of L’OR Barista in the US.
While anticipating an acceleration of our organic sales growth
in H2, we expect the business environment to remain volatile. As
there is uncertainty of the impact of the transition from
international brands to local brands in Russia, we believe it is
more appropriate to guide our full year organic adjusted EBIT
growth in the range of a low single-digit increase and low
single-digit decrease.
The tangible progress of our transformation - brand health, team
engagement, gross profit and sustainability, just to name a few -
is positioning us well to deliver sustained shareholder returns and
societal value."
Broad-based progress made on our strategic
Sustainability agenda
In the first half of 2023, we have made good progress against
our strategic Sustainability roadmap and multi-year objectives. Our
long-term Sustainability agenda is now deeply embedded across the
entire organisation and in our strategic decision making. Our
carbon accounting system has been rolled out and enables us to
track our carbon footprint up to the individual SKU level and
allows to have a full view of our carbon reduction performance
alongside financial performance.
During this semester, we announced, among others, the intention
to launch a new, fully compostable coffee capsule, which allows for
an uncompromising high-quality in-cup experience, and we announced
the intention to launch a new paper pack for our soluble coffee
ranges, which is recyclable and is the first of its kind in the
coffee market. Moreover, the coffee from this new paper pack will
generate the lowest carbon footprint within our existing range of
products.
In addition, JDE Peet's has become a member of the ILO Child
Labour Platform, to tackle the root causes of child labour in the
coffee supply chain, and we published our Water Stewardship Policy
and our Nutrition Policy.
Update on Russia
Since the start of the war, JDE Peet's has sought to ensure that
its business in Russia is operated as a stand-alone business to the
greatest extent possible. The company has now taken the next step
by transitioning to a local portfolio of brands, which resulted in
a non-cash impairment of EUR 185 million of the Jacobs brand in H1
23 and is expected to lead to meaningfully lower contribution from
Russia in H2 23.
Outlook 2023
JDE Peet's expects the business environment to remain volatile
and vulnerable for the remainder of 2023. As there is
uncertainty on the impact of the transition from international
brands to local brands in Russia, the company now expects to
deliver the following for full-year 2023:
- Organic sales growth at the high end
of its medium-term range of 3 - 5% (unchanged)
- Adjusted EBIT to fall within the
range of a low single-digit organic increase and a low single-digit
organic decline (updated)
- Net leverage below 3.0x, with Free
Cash Flow of around EUR 400 million, post normalisation of working
capital, confirming an ongoing run-rate of EUR 1 bn on a 3-yr
average (additional)
- A stable dividend (unchanged)
FINANCIAL REVIEW HALF-YEAR 2023
in EUR m (unless otherwise stated)
|
6M 2023 |
6M 2022 |
Organic change |
Reported change |
Sales |
3,988 |
3,896 |
3.5% |
2.4% |
Adjusted EBIT |
581 |
631 |
-3.0% |
-7.9% |
Underlying profit for the period |
411 |
523 |
- |
-21.4% |
Underlying EPS (EUR)1, 2 |
0.85 |
1.05 |
- |
-19.6% |
Reported basic EPS (EUR)2 |
0.41 |
1.02 |
- |
-59.8% |
1
Underlying earnings (per share) exclude all adjusting items (net of
tax) |
|
|
2
Based on weighted average number of shares outstanding |
Total reported sales increased by 2.4% to EUR 3,988 million.
Excluding a -1.6% effect related to foreign exchange and 0.4%
related to scope and other changes, total sales increased by 3.5%
on an organic basis, with 3 out of 4 segments growing between 5%
and 10% organically. Organic sales growth reflects a price effect
of 6.8% and a volume/mix effect of -3.3%. In-Home sales increased
organically by 2.2% and in Away-from-Home by 9.0%, resulting in a
4-yr organic CAGR of 6.7% for In-Home sales and 0.6% for
Away-from-Home sales.
Total adjusted EBIT decreased organically by 3.0% to EUR 581
million as an increase in gross profit was offset by an increase in
SG&A. Including the effects of foreign exchange and scope
changes, adjusted EBIT decreased by 7.9%.
Underlying profit - excluding all adjusting items net of tax -
decreased by 21.4% to EUR 411 million. This performance was mainly
driven by an unfavourable impact from fair value changes in
derivatives and forex and a lower level of operating profit, and
includes an underlying effective tax rate of 23.5%.
Net leverage of 2.8x net debt to adjusted EBITDA at the end of
H1 23 was kept well below 3.0x, with a net debt of EUR 4.2 billion
at the end of H1 23.
Free cash flow was EUR 14 million in the first half of 2023,
which was lower than the comparative period in 2022 due primarily
to the normalisation of working capital as well as higher capital
expenditures.
JDE Peet's' liquidity position remains strong, with total
liquidity of EUR 2.2 billion consisting of a cash position of EUR
0.7 billion (excluding restricted cash) and available committed RCF
facilities of EUR 1.5 billion.
For the full and original version of the press release click
here
CONFERENCE CALL & AUDIO WEBCAST
Fabien Simon (CEO) and Scott Gray (CFO) will host a conference
call for analysts and institutional investors at 10:00 AM CET today
to discuss the half-year 2023 results. A live and on-demand audio
webcast of the conference call will be available via JDE Peet’s’
Investor Relations website. 1This press release contains certain
non-IFRS financial measures and ratios, which are not recognised
measures of financial performance or liquidity under IFRS. For a
reconciliation of these non-IFRS financial measures to the most
directly comparable IFRS financial measures, see page 7 of this
press release.
ENQUIRIES
Media
Khaled RabbaniMedia@jdepeets.com+31 20 558 1753
Investors & Analysts
Robin JansenIR@jdepeets.com+31 6 1594 4569
About JDE Peet’sJDE Peet’s is the world's
leading pure play coffee and tea company, serving approximately
4,200 cups of coffee or tea per second. JDE Peet's unleashes the
possibilities of coffee and tea in more than 100 markets with a
portfolio of over 50 brands including L’OR, Peet’s, Jacobs, Senseo,
Tassimo, Douwe Egberts, OldTown, Super, Pickwick and Moccona. In
2022, JDE Peet’s generated total sales of EUR 8.2 billion and
employed a global workforce of more than 20,000 employees. Read
more about our journey towards a coffee and tea for every cup at
www.jdepeets.com.
IMPORTANT INFORMATION
Market Abuse Regulation
This press release contains information within
the meaning of Article 7(1) of the EU Market Abuse Regulation.
Presentation
The condensed consolidated unaudited financial statements of JDE
Peet’s N.V. (the "Company") and its consolidated subsidiaries (the
"Group") are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union ("IFRS"). In
preparing the financial information in these materials, except as
otherwise described, the same accounting principles are applied as
in the consolidated financial statements of the Group as of, and
for, the year ended 31 December 2022 and the related notes thereto.
All figures in these materials are unaudited. In preparing the
financial information included in these materials, most numerical
figures are presented in millions of euro. Certain figures in these
materials, including financial data, have been rounded. In tables,
negative amounts are shown in parentheses. Otherwise, negative
amounts are shown by "-" or "negative" before the amount.
Forward-looking Statements
These materials contain forward-looking statements as defined in
the United States Private Securities Litigation Reform Act of 1995
concerning the financial condition, results of operations and
businesses of the Group. These forward-looking statements and other
statements contained in these materials regarding matters that are
not historical facts and involve predictions. No assurance can be
given that such future results will be achieved. Actual events or
results may differ materially as a result of risks and
uncertainties facing the Group. Such risks and uncertainties could
cause actual results to vary materially from the future results
indicated, expressed or implied in such forward-looking statements.
There are a number of factors that could affect the Group’s future
operations and could cause those results to differ materially from
those expressed in the forward-looking statements including
(without limitation): (a) competitive pressures and changes in
consumer trends and preferences as well as consumer perceptions of
its brands; (b) fluctuations in the cost of green coffee, including
premium Arabica coffee beans, tea or other commodities, and its
ability to secure an adequate supply of quality or sustainable
coffee and tea; (c) global and regional economic and financial
conditions, as well as political and business conditions or other
developments; (d) interruption in the Group's manufacturing and
distribution facilities; (e) its ability to successfully innovate,
develop and launch new products and product extensions and on
effectively marketing its existing products; (f) actual or alleged
non-compliance with applicable laws or regulations and any legal
claims or government investigations in respect of the Group's
businesses; (g) difficulties associated with successfully
completing acquisitions and integrating acquired businesses; (h)
the loss of senior management and other key personnel; and (i)
changes in applicable environmental laws or regulations. The
forward-looking statements contained in these materials speak only
as of the date of these materials. The Group is not under any
obligation to (and expressly disclaim any such obligation to)
revise or update any forward-looking statements to reflect events
or circumstances after the date of these materials or to reflect
the occurrence of unanticipated events. The Group cannot give any
assurance that forward-looking statements will prove correct and
investors are cautioned not to place undue reliance on any
forward-looking statements. Further details of potential risks and
uncertainties affecting the Group are described in the Company’s
public filings with the Netherlands Authority for the Financial
Markets (Stichting Autoriteit Financiële Markten) and other
disclosures.
Market and Industry Data
All references to industry forecasts, industry statistics,
market data and market share in these materials comprise estimates
compiled by analysts, competitors, industry professionals and
organisations, of publicly available information or of the Group's
own assessment of its markets and sales. Rankings are based on
revenue, unless otherwise stated.
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