JDE Peet’s has released its mid-2022 report, revealing total sales increased by 19.7 per cent to USD$3957 million.
Within In-Home consumption, e-commerce grew by 12 per cent while JDE Peet’s Away-from-Home market increased by 33.7 per cent on an organic basis over the first half of 2022.
“Half-way through 2022, we delivered very well on our commitments, despite unprecedented economic and geopolitical disruptions, exacerbated by the tragic war in Ukraine. Our strong set of results is a testament to the resilient growth profile of JDE Peet’s, supported by powerful brands, leading market positions and talented teams around the world,” says Fabien Simon, CEO of JDE Peet’s.
“We are successfully navigating through supply chain disruptions, pandemic effects, and mounting inflation, while keeping course of our value creation agenda, centred around quality and inclusive revenue growth. E-commerce sales kept growing organically at a double-digit rate, as did revenue in the U.S. and in China in-home, while we are accelerating the store expansion there.”
Total organic sales growth reflected a volume/mix effect of -0.2 per cent and 0.3 per cent in price while changes, such as in scope, increased sales by 15.7 per cent. Foreign exchange had a positive impact of 3.7 per cent.
Organic adjusted earnings before interest and taxes (EBIT) decreased by 2.1 per cent, as slightly higher gross profit was offset by increased investments in advertising, digital and emerging markets capabilities, which, in turn, was partially offset by lower promotions. The organic increase in gross profit was driven by ongoing cost discipline, simplification, revenue management and pricing to offset inflation.
Underlying profit – excluding all adjusting items net of tax – increased by 17.3% to USD$531 million, supported by lower interest expenses because of deleveraging and lower average cost of debt, following the company’s refinancing in 2021.
“Not only did we lead on pricing, delivered double-digit earnings growth per share and further increased our investments for growth, but we also amplified our sustainability agenda, with the ambition to elevate the industry standard, targeting 80% responsibly sourced coffee by the end of 2022,” says Simon.
JDE Peet’s also made progress in reducing its carbon footprint. In the first half of 2022, the company increased the use of renewable electricity in manufacturing to more than 40 per cent. In addition, the company further improved the gender diversity of the Board through the appointments of three female Board members during the 2022 Annual General Meeting.
Currently, JDE Peet’s says it expects the business environment to remain volatile for the remainder of 2022 as input cost inflation, geo-political unrest and certain effects of the pandemic persist.
The company continues to expect to deliver double-digit organic sales growth, with disciplined pricing for inflation, while aiming for a stable level of gross profit compared to last year.
The brand will continue to invest in its people and strategic growth opportunities, while keeping a tight focus on other cost items, and expects to deliver free cash flow of at least USD$1 billion.
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