JDE Peet’s released its mid-2022 report, revealing that total sales increased 19.7% to US$3,957 million.
Within home consumption, e-commerce grew 12% while JDE Peet’s out-of-home market grew 33.7% on an organic basis in the first half of 2022.
“As of mid-2022, we have delivered very well on our commitments, despite unprecedented economic and geopolitical disruption, exacerbated by the tragic war in Ukraine. Our strong set of results is testament to JDE Peet’s resilient growth profile, supported by strong brands, market-leading positions and talented teams around the world,” said Fabien Simon, CEO of JDE Peet’s.
“We are successfully navigating through supply chain disruptions, the effects of the pandemic and rising inflation, while maintaining focus on our value creation agenda, centered on quality and inclusive growth revenues. E-commerce sales continued to grow organically at a double-digit rate, as did revenues in the US and China from home, as we accelerate store expansion there.
Total organic sales growth reflected a volume/mix effect of -0.2% and a price effect of 0.3%, while changes, such as reach, increased sales by 15.7%. Exchange rates had a positive impact of 3.7%.
Adjusted organic profit before interest and tax (EBIT) was down 2.1% as the slight increase in gross profit was offset by increased investments in advertising, digital and emerging markets capabilities, which in turn been partially offset by lower promotions. The organic increase in gross margin is due to continued cost discipline, simplification, revenue management and pricing to offset inflation.
Underlying profit – excluding all net of tax adjusting items – increased 17.3% to $531 million, supported by lower interest expense due to deleveraging and lower average cost of debt, following the refinancing of the company in 2021.
“Not only have we led on price, delivered double-digit earnings per share growth and further increased our investments for growth, but we have also amplified our sustainability program, with the ambition to ‘raise the industry standard, targeting 80% responsibly sourced coffee by the end of 2022,’ says Simon.
JDE Peet’s has 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 over 40%. In addition, the company has further improved gender diversity on the board with the appointment of three female board members at 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, geopolitical unrest and some effects of the pandemic linger.
The company continues to expect double-digit organic sales growth, with disciplined inflation pricing, while aiming for a stable gross margin level compared to last year.
The brand will continue to invest in its people and strategic growth opportunities, while focusing on other cost elements, and expects to generate free cash flow of at least US$1 billion.
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