NETHERLANDS – JDE Peet’s has reported a 5.6 percent increase in total sales, reaching €4,210 million (US$4.59M)during the first half of 2024, despite a 1.8 percent negative impact from foreign exchange fluctuations.
On an organic basis, sales grew by 3.6 percent, driven by a price effect of 2.4 percent and a volume/mix effect of 1.2 percent. In-home sales rose by 3.4 percent, while away-from-home sales increased by 4.2 percent.
The company also recorded a five-year organic compound annual growth rate (CAGR) for sales at 5.0 percent, with a free cash flow of €315 million (US$343.66M) in the first half of 2024.
Interim CEO Luc Vandevelde expressed satisfaction with the results, highlighting the robust performance across top-line, profitability, and cash flow amidst rising green coffee prices and a growing demand for more affordable offerings.
“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 characterized by rising green coffee prices and a growing demand for more affordable offerings,” said Vandevelde.
Profits for the brand during the period surged by 86.5 percent to €360 million (US$392.7M). However, underlying profit, which excludes all altering items such as net of tax, decreased by 10.0 percent to €370 million (US$403.6M).
This decline was primarily due to a non-cash, non-tax-deductible impact of €113 million (US$123.3M) from a fair value change in JDE Peet’s equity derivatives.
Robusta coffee bean prices in the second half of JDE Peet’s financial year were up by 54 percent compared to the previous year, while Arabica prices increased by 13 percent.
Vandevelde addressed investors in a recent earnings call, explaining that the company plans to raise prices to protect future gross profits.
“The green coffee inflation of the last quarters will hit our P&L in the coming quarters and thus inevitably requires additional price increases and continued cost discipline, which I think are essential in protecting our gross profit so we can ensure that we maintain the right investment levels behind our brands, products, channels, which is crucial for driving growth and shareholder value, both short-term and long-term,” said Vandevelde.
Following the strong performance, the group raised its full-year performance forecast from mid-single-digit growth to a projected increase in organic adjusted EBIT of around 10 percent.
“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,” Vandevelde concluded.
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