CoffeeNetwork (New York) – Today, JDE Peets reported their financial results for 2022. Highlights included:
• Total sales up +16.4% to EUR 8.2 billion, of which +11.3% organically, driven by price
• Gross profit up +3.3% supported by efficiencies, disciplined pricing and revenue management
• SG&A increased by 10.6%, driven by working media and other growth-related investments
• Adjusted EBIT down -5.9%, or -9.3% organically, to EUR 1,227 million, as SG&A increased
• Underlying EPS up +6.3% to EUR 1.91
• Free cash flow of EUR 1,358 million while leverage reduced to 2.65x
• Significant progress made on ESG, recognised by external ESG rating agencies
• Proposal to pay a cash dividend of EUR 0.70 per share in two equal instalments
Medium- to Long-Term Targets”
For the medium- to long-term, JDE Peet's continues to target organic sales growth of 3 to 5% and mid single-digit organic adjusted EBIT growth, a free cash flow conversion of approximately 70% and stable to increasing dividends over time.
Outlook 2023
JDE Peet's aims to achieve the following in 2023:
• Organic sales growth at the high end of its medium-term range of 3 – 5%
• Low single-digit organic adjusted EBIT growth, with a moderate increase in SG&A
• A stable dividend
CPG Europe
Organic growth of 1.8% was driven by an increase in price of 14.5% and a decrease in volume/mix of - 12.7%. While volume elasticity remained below the historical average, volumes were negatively impacted by retaliations during customer negotiations across various European markets, including Germany, France and the UK. The decline in volume/mix also reflects a high base of comparison, as lockdown measures continued to be lifted, shifting a part of In-Home consumption back to Away-from-Home channels, which benefited the Out-of-Home segment. Notable strong performance was delivered by countries such as Poland, Hungary and Denmark and brands including Jacobs and Gevalia.
Reported sales increased by 1.9% to EUR 3,640 million, including a net positive effect of 0.1% from foreign exchange and changes in scope. Adjusted EBIT decreased organically by -26.2% to EUR 807 million, mainly driven by lower volumes caused by retaliations, as well as a step-up in marketing investments. Based on a 3-year CAGR, the organic adjusted EBIT growth was -5.6%, including higher marketing investments.
CPG LARMEA
Organic growth of 32.5% consisted of an increase in price of 33.1% and stable volume/mix of (0.6)%. The resilient volume/mix performance was broad-based across geographies, product portfolio and price points. Brazil in particular delivered resilient volume growth while recording the strongest pricing in the region.
Reported sales increased by 48.1% to EUR 1,616 million, including a foreign exchange impact of 15.8% as the main currencies in this segment appreciated against the euro. Adjusted EBIT increased organically by 38.1% to EUR 296 million, mainly reflecting higher pricing from the timing of price increases to pass through inflation, and a low base of comparison. Based on a 3-year CAGR, the organic adjusted EBIT growth was 17.0%.
Peet’s
Organic growth of 12.2% was driven by an increase of 9.4% in price and 2.8% in volume/mix. In the US, most lockdown measures had been lifted in the first part of FY 22. As a result, Peet's coffee retail stores in the US delivered high single-digit growth in same-store-sales in FY 22, while its In-Home business delivered low-teens organic sales growth in FY 22 and mid-teens organic sales growth on a 3-yr CAGR. In China, Peet's increased its coffee retail store network by 47 to 117 stores.
Reported sales increased by 26.3% to EUR 1,141 million, which included a positive foreign exchange impact of 14.2%. Adjusted EBIT increased organically by 9.8% to EUR 147 million. Based on a 3-year CAGR, the organic adjusted EBIT growth was 15.8%.
Out-of-Home
Organic growth of 26.6% was driven by an increase of 15.1% in volume/mix and 11.5% in price as the segment benefited from increasing levels of activity in its Out-of-Home channels following the lifting of lockdown measures in the first part of 2022 and pricing to offset inflation. The overall growth performance was broad-based, with notable strong performance in countries such as Germany, the UK and France and from brands including Douwe Egberts, Jacobs and Gevalia.
Reported sales increased by 25.7% to EUR 908 million, including an impact of -0.4% related to foreign exchange and -0.5% related to scope and other changes. Adjusted EBIT increased organically by 31.6% to EUR 119 million, driven by operational leverage and efficiencies. Based on a 3-year CAGR, the organic adjusted EBIT declined by 13.1%.
CPG APAC
Although a few markets continued to be impacted by lockdown measures in 2022, the region delivered a solid double-digit growth level. Organic growth of 10.1% was driven by an increase of 8.6% in price and 1.4% in volume/mix, with notable strong performance in countries such as Thailand, Malaysia and China, and from brands including OldTown, Super and Moccona.
Reported sales increased by 19.0% to EUR 814 million, which included a positive scope effect of 6.2%, related to the acquisition of Campos in Australia, and a positive foreign exchange impact of 2.7%. Adjusted EBIT increased organically by 6.6% to EUR 123 million, supported by volume/mix, despite the continued impact from lockdown measures on the Away-from-Home businesses and a step-up in investments, while also benefiting from a low base of comparison. Based on a 3-year CAGR, the organic adjusted EBIT growth was -1.0%, including larger marketing investments.
Alexis Rubinstein
JDE Peet’s Reports Full-Year Results 2022
