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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