JDE Peet’s reports half-year results 2024
Strong, broad-based performance across top-line,
profitability and cash flow
PRESS RELEASE
Amsterdam, 31 July 2024
Key items1
- Organic sales up
+3.6% (5-yr CAGR: +5.0%), driven by +2.4% price and +1.2%
volume/mix
- Reported sales
up +5.6% to EUR 4,210 million
- Organic adjusted
gross profit up +9.0%
- Organic adjusted
EBIT up +17.5% (5-yr CAGR: +4.4%); A&P slightly up
organically
- Free cash flow
of EUR 315 million; net leverage at 3.1x
- Underlying EPS
of EUR 0.76; Basic EPS of EUR 0.74
- FY 24 outlook
raised
A message from Luc Vandevelde, Interim CEO of JDE
Peet’s
"I am very pleased with this strong set of results for the first
half of 2024. We delivered robust, broad-based performance across
top-line, profitability and cash flow, despite operating in a
challenging environment that continues to be characterised by
rising green coffee prices and a growing demand for more affordable
offerings.
In the first half, we continued to make good progress in our
strategic priorities, achieving double-digit growth in E-commerce
and China, continued good performance for Peet's and L'OR Barista.
The integration of Maratá and Caribou is also well underway, with
both delivering results that are in line with our expectations.
This overall strong performance underscores the strength of our
business, bolstered by our multi-channel approach, diverse
high-quality product offerings, powerful brands, leading market
positions, and the resilience of our organisation.
Given our strong H1 performance and our expectations for H2 –
including the continued inflation and volatility in green coffee
prices and the additional pricing this will require - we are
confident in raising our full-year outlook across top-line,
profitability and cash flow, also enabling us to bring down our net
leverage to below 3x within 12 months after closing Maratá and
Caribou."
Outlook 2024
Taking into account the strong performance in H1 24 as well as
the expectations for H2, including the continued inflation and
volatility in green coffee prices and the additional pricing this
will require, the company increases its outlook for full-year
2024:
- Organic sales growth at the higher
end of its medium-term range of 3 - 5% (increased);
- Organic adjusted EBIT growth of
around 10% (increased);
- Free cash flow of at least EUR 850
million (increased);
- Net leverage below 3x
(improved);
- Stable dividend (unchanged)
Sustainability
JDE Peet's continues to demonstrate resilience and agility as a
responsible and sustainable company, delivering financial and
operational results while advancing on our ESG objectives.
In the first half of 2024, JDE Peet's aligned its GHG emissions
reduction ambition to be net-zero in 2050, including the new
Forestry, Land and Agriculture (FLAG) target, and validated by
SBTi:
- A 43% reduction in
absolute Scope 1 & 2 emissions by 20302
- A 30% reduction in absolute forest,
land and agriculture (FLAG) emissions by 20302
- 25% reduction in absolute Scope 3
emissions by 2030, from a 2020 base year (industrial non-FLAG).
We also continue to progress on our preparedness for the EU
Deforestation Regulation (EUDR). This new regulation requires
companies to demonstrate as of January 2025, that, among others,
all green coffee imports into the EU, have not been harvested from
land deforested after 31 December 2020 (the EUDR cut-off date). In
collaboration with Enveritas, we initiated a groundbreaking project
in 2023 to map coffee-related deforestation globally. To date, more
than 90% of the world's coffee growing-areas have been mapped,
revealing that less than 0.07% of the coffee-related plots show
deforestation after 31 December 2020. We are engaging with local
operators, governments, NGOs and farmers in multiple countries to
effectively mitigate and prevent deforestation.
FINANCIAL REVIEW HALF-YEAR 2024
in EUR million (unless otherwise stated)
|
6M 2024 |
6M 2023 |
Organic |
Reported |
change |
change |
Sales |
4,210 |
3,988 |
3.6% |
5.6% |
Gross Profit |
1,683 |
1,542 |
8.5% |
9.1% |
Adjusted gross profit1 |
1,636 |
1,490 |
9.0% |
9.8% |
Operating profit |
672 |
323 |
104.9% |
108.0% |
Adjusted EBIT1 |
692 |
581 |
17.5% |
19.2% |
Profit for the period |
360 |
193 |
— |
86.5% |
Underlying profit for the period1 |
370 |
411 |
— |
-10.0% |
Basic EPS (EUR)2 |
0.74 |
0.41 |
— |
80.5% |
Underlying EPS (EUR)1,2,3 |
0.76 |
0.85 |
— |
-10.6% |
1 Alternative Performance Measure. Refer to
Reconciliation of non-IFRS information on page 7 |
|
|
2 Based on weighted average number of
shares outstanding |
3 Underlying earnings (per share) exclude
all adjusting items (net of tax) |
Total reported sales increased by 5.6% to EUR 4,210
million. Excluding a -1.8% effect related to foreign exchange and
3.9% related to scope and other changes, sales increased by 3.6% on
an organic basis. Organic sales growth was driven by a price effect
of 2.4% and a volume/mix effect of 1.2%. In-Home sales increased
organically by 3.4% and in Away-from-Home by 4.2%. The 5-year
organic CAGR for sales was 5.0%.
Total adjusted EBIT increased organically by 17.5%
to EUR 692 million. The increase was driven by an organic increase
of 9.0% in adjusted gross profit, including a one-off EUR 16
million insurance payout related to a warehouse issue that impacted
performance at Peet's in H1 23, and disciplined cost control.
A&P was broadly around the same level as in the same period
last year, increasing slightly on an organic basis. The 5-year
organic CAGR for adjusted EBIT was 4.4%. Including the effects of
foreign exchange and scope changes, adjusted EBIT increased by
19.2%. Operating profit more than doubled to EUR 672 million, which
is partially explained by EUR 238 million lower adjusting items
compared to the same period last year.
Profit for the period increased by 86.5% to EUR 360
million. Underlying profit - excluding all adjusting items net of
tax - decreased by 10.0% to EUR 370 million. This performance was
mainly driven by an unfavourable non-cash, non-tax deductible
impact of EUR 113 million from a fair value change in the company's
equity derivatives, due to the decrease in the share price in H1
24. Excluding the aforementioned fair value change, the underlying
effective tax rate would have been around 25% and underlying profit
would have been EUR 483 million, or 17.5% higher than in H1 23.
Free cash flow was EUR 315 million in the first
half of 2024.
Net debt increased by EUR 890 million to EUR 4,780
million in the first half of 2024, which was driven by the
transaction considerations related to Maratá and Caribou. As a
result, net leverage was 3.1x net debt to adjusted EBITDA at the
end of H1 24.
JDE Peet's' liquidity position remains strong, with
total liquidity of EUR 2.7 billion consisting of a cash position of
EUR 1.2 billion (excluding restricted cash) and available committed
RCF facilities of EUR 1.5 billion.
1 This press release contains Alternative
Performance Measures (APMs), which are not recognised measures of
financial performance under IFRS. For a reconciliation of these
APMs to the most directly comparable IFRS financial measures, refer
to Reconciliation of non-IFRS information on page 7.
2 from a 2020 base year
For the full and original version of the press release click
here
CONFERENCE CALL & AUDIO WEBCAST
Luc Vandevelde (Interim 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 2024 results. A live and
on-demand audio webcast of the conference call will be available
via JDE Peet’s’ Investor Relations website.
ENQUIRIES
Media
Khaled Rabbani
Media@jdepeets.com
+31 20 558 1753
Investors & Analysts
Robin Jansen
IR@jdepeets.com
+31 6 1594 4569
About JDE Peet’s
JDE Peet’s is the world's leading pure play coffee and tea
company, serving approximately 4,100 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 2023, JDE Peet’s generated total
sales of EUR 8.2 billion and employed a global workforce of more
than 21,000 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 interim
financial statements of JDE Peet’s N.V. (the
"Company") and its consolidated subsidiaries ("JDE Peet's") 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 JDE
Peet's's consolidated financial statements at, and for, the year
ended 31 December 2023 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 JDE Peet's. These
forward-looking statements contain 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
JDE Peet's. 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 JDE Peet’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 JDE Peet'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 JDE Peet'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. JDE Peet's 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. JDE Peet's 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 JDE Peet's 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 JDE Peet's'
own assessment of its markets and sales. Rankings are based on
revenue, unless otherwise stated.
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