JDE Peet’s reports half-year results 2021
Good progress and broad-based performance, delivered in a quality way
Amsterdam, 4 August 2021
- Total organic sales grew 4.2%, supported by In-Home momentum (+4.9%) and fuelled by Single Serve and Beans growing double-digit. E-commerce grew by 30% In-Home
- Away-from-Home returned to profitability, despite largely stable sales base on average for H1 (+0.7%) although with visible positive reopening effects in Q2
- Organic adjusted EBIT grew 0.8% to EUR 636 million, with gross profit margin expansion
- Free cash flow of EUR 553 million and net debt reduced to EUR 4,660 million
- Leverage reduced to 2.98x, from 3.23x at the end of FY 20
- Underlying EPS grew 12.9%, mainly supported by operational improvements
- Positive market share performance across technologies and continued progress on Sustainability
- Confident to reach FY 21 outlook
A message from Fabien Simon, CEO of JDE Peet’s
“I would like to thank all our teams around the world for their perseverance while successfully navigating our company through all the ongoing challenges and complexity and for delivering this strong set of results.
We are pleased with our first-half 2021 results, across all key metrics, including top-line, profitability, cash generation and in-market performance. Guided by our refreshed strategy, we delivered 4.2% organic sales growth, in a quality way, with a gross profit margin expansion of 26 basis points that enabled JDE Peet's to reinvest behind its powerful portfolio of brands and future growth opportunities.
In the first half of the year, we also continued to evolve our business portfolio. We announced partnerships with J.M. Smucker in the US and with Pret A Manger in the UK, the acquisition of Campos in Australia and the divestment of two small businesses in the Netherlands and France.
We also significantly optimised our financial position and capital structure, reducing our leverage to below 3x, and our average cost of debt to around 1.5%, from our successful refinancing and inaugural bond issue.
Looking at our Sustainability agenda, I am very pleased that in June, our European manufacturing footprint reached Zero Landfill status.
Based on the progress made in the first half of 2021 and our current expectations for the remainder of the year, we remain confident to reach our outlook for the year, being intentional on managing inflation and navigating the enduring uncertainty of the pandemic."
We continued to make good progress on our Sustainability agenda in the first half of 2021. In March, when we refinanced our bank facilities, we connected EUR 2.5 bn of our investment grade facilities to our sustainability ambitions. That same month, we also committed to adopt a Science-Based Target and we are on track to announce a science-based greenhouse gas reduction target through SBTi in the second half of this year. In manufacturing, our facility in Gavle, Sweden, was the first one to achieve the PAS2060 certification for carbon neutrality in March, and in June, all our manufacturing facilities in Europe reached the Zero Landfill status for the first time.
Although vaccination programmes around the world continue to support the gradual lifting of lockdown measures, the COVID situation remains highly volatile and uncertain as, unfortunately, spikes in infection rates in a number of countries continue to lead to new lockdowns. This continues to limit the visibility and predictability regarding the timing and the pace of the recovery in our Away-from-Home businesses.
Within this context, we continue to expect organic sales growth of 3 to 5% in FY 21, assuming a gradual recovery in Away-from-Home. We also continue to expect organic adjusted EBIT to grow in the low single-digit range in FY 21, as we step up our investments for growth, notably in marketing and innovation support.
Our commitment to reduce our leverage to below 3x net debt to EBITDA was achieved by the end of June.
FINANCIAL REVIEW HALF-YEAR 2021
in EUR m (unless otherwise stated)
|6M 2021||6M 2020||Organic change||Reported change|
|Sales||3,254||3,236||4.2 %||0.5 %|
|Adjusted EBIT||636||642||0.8 %||-1.0 %|
|Underlying profit for the period||446||393||-||13.5||%|
|Underlying EPS (EUR) 1, 2||0.89||0.79||-||12.9||%|
|Reported basic EPS (EUR)||0.76||0.44||-||72.7||%|
|1 Underlying earnings (per share) exclude all adjusting items (net of tax)|
|2 Based on 501,446,549 shares outstanding (H1 20: 498,719,501) on 30 June|
In H1 21, total sales increased by 4.2% on an organic basis. Our In-Home businesses continued to deliver strong organic sales growth of 4.9% while sales in Away-from-Home remained relatively stable (+0.7%) as the positive effects of re-openings in a limited number of countries in the course of H1 21 was largely offset by new lockdowns in a number of other markets.
Total organic sales growth reflects a volume/mix effect of 3.7% and 0.4% in price. Changes in scope and other changes decreased sales by 0.2% while foreign exchange had a negative impact of 3.5%. Total reported sales increased by 0.5% to EUR 3,254 million.
Adjusted EBIT increased organically by 0.8% to EUR 636 million driven by increased gross profit which was partially re-invested in marketing, innovations and growth capabilities. Adjusted SG&A increased organically by EUR 61 million. Including the effects of foreign exchange and scope changes, adjusted EBIT decreased by 1.0%.
Underlying profit - excluding all adjusting items net of tax - increased by 13.5% to EUR 446 million supported by lower interest expenses as a result of deleveraging and lower average cost of debt, as well as a reduction of other finance expenses.
Net leverage improved to 2.98x net debt to adjusted EBITDA from 3.23x at the end of FY 20.
In the first half of 2021, both Moody's and Standard & Poor's assigned investment grade ratings with a stable outlook to JDE Peet's, underscoring our operating strength, strong financial discipline, and continued progress on deleveraging.
Our liquidity position remains strong, with total liquidity of EUR 2 billion consisting of a cash position of EUR 0.5 billion and available committed RCF facilities of EUR 1.5 billion.
For the full and original version of the press release click here
CONFERENCE CALL & AUDIO WEBCAST
Fabien Simon (CEO) and Scott Gray (CFO) will host a conference call for analysts and institutional investors at 10:00 AM CET today to discuss the half-year 2021 results. A live and on-demand audio webcast of the conference call will be available via JDE Peet’s’ Investor Relations website.
1 This press release contains certain non-IFRS financial measures and ratios, which are not recognised measures of financial performance or liquidity under IFRS. For a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures, see page 6 of the press release.
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About JDE Peet’s
JDE Peet’s is the world's leading pure-play coffee and tea company by revenue and served approximately 4,500 cups of coffee or tea every second in 2020. JDE Peet's unleashes the possibilities of coffee and tea in more than 100 developed and emerging markets through a portfolio of over 50 brands that collectively cover the entire category landscape led by household names such as L’OR, Peet’s, Jacobs, Senseo, Tassimo, Douwe Egberts, OldTown, Super, Pickwick and Moccona. In 2020, JDE Peet’s generated total sales of EUR 6.7 billion and employed a global workforce of more than 19,000 employees. Read more about our journey towards a coffee and tea for every cup at www.JDEPeets.com.
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
The condensed consolidated unaudited financial statements of JDE Peet’s N.V. (the "Company") and its consolidated subsidiaries (the "Group") are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). In preparing the financial information in these materials, except as otherwise described, the same accounting principles are applied as in the consolidated special purpose financial statements of the Group as of, and for, the year ended 31 December 2020 and the related notes thereto. All figures in these materials are unaudited. In preparing the financial information included in these materials, most numerical figures are presented in millions of euro. Certain figures in these materials, including financial data, have been rounded. In tables, negative amounts are shown in parentheses. Otherwise, negative amounts are shown by "-" or "negative" before the amount.
These materials contain forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995 concerning the financial condition, results of operations and businesses of the Group. These forward-looking statements and other statements contained in these materials regarding matters that are not historical facts and involve predictions. No assurance can be given that such future results will be achieved. Actual events or results may differ materially as a result of risks and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. There are a number of factors that could affect the Group’s future operations and could cause those results to differ materially from those expressed in the forward-looking statements including (without limitation): (a) competitive pressures and changes in consumer trends and preferences as well as consumer perceptions of its brands; (b) fluctuations in the cost of green coffee, including premium Arabica coffee beans, tea or other commodities, and its ability to secure an adequate supply of quality or sustainable coffee and tea; (c) global and regional economic and financial conditions, as well as political and business conditions or other developments; (d) interruption in the Group's manufacturing and distribution facilities; (e) its ability to successfully innovate, develop and launch new products and product extensions and on effectively marketing its existing products; (f) actual or alleged non-compliance with applicable laws or regulations and any legal claims or government investigations in respect of the Group's businesses; (g) difficulties associated with successfully completing acquisitions and integrating acquired businesses; (h) the loss of senior management and other key personnel; and (i) changes in applicable environmental laws or regulations. The forward-looking statements contained in these materials speak only as of the date of these materials. The Group is not under any obligation to (and expressly disclaim any such obligation to) revise or update any forward-looking statements to reflect events or circumstances after the date of these materials or to reflect the occurrence of unanticipated events. The Group cannot give any assurance that forward-looking statements will prove correct and investors are cautioned not to place undue reliance on any forward-looking statements. Further details of potential risks and uncertainties affecting the Group are described in the Company’s public filings with the Netherlands Authority for the Financial Markets (Stichting Autoriteit Financiële Markten) and other disclosures.
Market and Industry Data
All references to industry forecasts, industry statistics, market data and market share in these materials comprise estimates compiled by analysts, competitors, industry professionals and organisations, of publicly available information or of the Group's own assessment of its markets and sales. Rankings are based on revenue, unless otherwise stated.
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