In the first half (H1) of 2020, coffee giant JDE Peet’s reported adjusted earnings before interest and tax (EBIT) of €642 million (about US$758 million).
This marks an organic increase of 10.5 per cent year-on-year, driven by double-digit growth in all three of its in-home consumer packaged goods (CPG) segments and Peet’s. Including the effects of foreign exchange and scope changes, adjusted EBIT increased by 9.1 per cent.
“JDE Peet’s delivered strong performance in the first half of 2020, demonstrating the resilience of our business and brands despite the unprecedented economic and social disruption of COVID-19,” JDE Peet’s CEO Casey Keller says.
“Our balanced coffee and tea portfolio allowed us to quickly adapt to rapidly changing consumer habits, following the dynamic shift of cups from the away-from-home to the in-home environment.”
The performance of its in-home brands largely offset the impact COVID-19 had on its away-from-home businesses, which represents about 25 per cent of total sales, with total sales only decreasing by 1.1 per cent on an organic basis
Underlying profit – excluding non-recurring items – increased by 12 per cent to €393 million (about US$464 million), due to a higher operating profit, which was partly offset by higher tax charges.
Free cash flow of €402 million included costs related to its initial public offering on the Amsterdam Stock Exchange and higher levels of inventory required to maintain supply continuity during the COVID-19 crisis.
“Early in the crisis, our team took proactive steps to ensure the health and safety of employees worldwide, and protect our business operations, enabling us to continue serving customers and consumers without supply disruption,” Keller says.
“Despite a volatile environment, we delivered very strong adjusted EBIT growth, reflecting our pure-play focus as well as a disciplined approach to cost management. In addition, we are well on track to meet our deleveraging goal.”
Despite an organic sales decline of 29.5 per cent, JDE Peet’s is confident about the future og its Out-of-Home segment. Across the business, April and May were most severely impacted by the lockdown restrictions. However, starting in June when restrictions were gradually lifted across markets, it saw good recovery.
“Starting in June, we’ve seen a good recovery in our away-from-home businesses as local markets begin to recover from lockdowns,” Keller says.
“Given our strong portfolio of products and channels, we are uniquely positioned to continue to gain market share as we pivot to meet the needs and opportunities of our customers and consumers around the world.”
