JDE Peet’s raises concerns over Russian business future amid EU sanctions
NETHERLANDS – JDE Peet’s, the owner of coffee brands such as Douwe Egberts and L’Or, has expressed uncertainty regarding the future of its Russian business due to new European Union (EU) sanctions against Moscow, potentially impacting its 2024 guidance.
In August last year, the Dutch group had announced its intention to operate its Russian activities as a stand-alone business, exclusively selling local brands.
However, the 12th package of EU sanctions, effective from June, introduces elements that may influence the assessment of asset control in Russia, leading to potential implications for the company’s 2024 financial outlook.
“We have taken significant steps which go beyond the requirements mandated by international sanctions,” read a statement by JDE Peet’s, reiterating its current control over its Russian operations while not providing specifics on how the sanctions might affect the company.
Moscow recently took control of food and beverage group Danone’s Essential Dairy and Plant-based (EDP) subsidiary, impacting Danone’s planned sale of the business.
JDE Peet’s had set a target of mid-single-digit percent organic operating earnings growth in 2024, excluding Russia.
The company reported organic sales growth of 3.9 percent, driven by a 2.1 percent increase in volume/mix and a 1.8 percent rise in price. Despite a softer In-Home category in the US, Peet’s CPG business maintained market shares, contributing to the positive performance.
Fabien Simon, CEO of JDE Peet’s, stated, “We concluded 2023 with a very strong second semester, marked by an acceleration of JDE Peet’s organic top line and adjusted EBIT growth.”
He attributed the success to the company’s transformation efforts since 2021, aiming to become a more global, digital, and sustainable entity.
Reported sales increased by 1.1 percent to US$1246 million, considering a foreign exchange effect of -2.9 percent. Adjusted EBIT decreased organically by 1.0 percent to US$153 million, reflecting higher investments in marketing spend.
JDE Peet’s also highlighted progress toward its goal of 100 percent responsibly sourced green coffee by 2025, reaching 83.8 percent by the end of the year and engaging in 63 active projects.
The company has impacted over 108,000 additional smallholder farmers, totaling 700,900 since 2015.
For 2024, JDE Peet’s expects organic sales growth to align with the lower end of the medium-term range of 3 to 5 percent.
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