JDE Peet’s reports full-year results 2020
H2 back to growth with better underlying
momentum
Press release
Amsterdam, 9 March 2021
Key items1
- Pure-play focus and powerful portfolio drove record In-Home
organic sales growth of 9.1% in FY 20
- Total organic sales growth accelerated from -1.1% in H1 to 0.7%
in H2, with In-Home at 9.8% and Away-from-Home at -29.8% due to new
lockdowns in Q4
- Progress across all sustainability commitments, with notable
increase in share of third-party certified/verified coffee; 87% of
packaging designed to be reusable, recyclable or compostable
- Organic adjusted EBIT growth of 6.2% to EUR 1,278 million in FY
20
- Free cash flow of EUR 877 million, after one-off tax and IPO
payments of EUR 277 million
- Leverage improved to 3.2x, from 4.2x at the end of FY 19
- Proposal to pay a total cash dividend of EUR 0.70 per share in
two equal instalments
- FY 21 outlook: organic sales growth of 3 to 5%, with a catch-up
on the marketing investment level, will result in a low
single-digit organic increase in adjusted EBIT
A message from Fabien Simon, CEO of JDE
Peet’s
“In an unprecedented year, JDE Peet’s employees and partners
worked tirelessly to serve our loved coffee and tea brands to
consumers across the six continents. I would like to thank the
teams who rallied together, supported communities with initiatives
across 30 countries, while ensuring the health and safety of our
employees.
JDE Peet's delivered a strong performance in 2020, demonstrating
once again the resilience of the category we participate in, as
well as the strengths and agility of our capabilities built over
the last 268 years. As the world's largest coffee and tea pure
player, we have become more relevant than ever before. We are
evolving our portfolio and channel capabilities towards the fastest
growing and more premium In-Home propositions through our unique
set of global and local brands. Our strategic choices and
investments supported a record In-Home organic growth of 9.1% in
2020, with increasing momentum in the second part of the year on
sales growth, pricing and in-market performance.
We improved our leverage, and reduced net debt by another EUR
462 million in the second half of 2020. Our confidence in sustained
strong free cash flow generation enables us to propose a cash
dividend of EUR 0.70 per share.
2021 is expected to be another uncertain year and the
long-lasting impacts of the pandemic are unclear and will need to
be assessed, in particular the implications for the Away-from-Home
channel. We therefore consider it appropriate to adjust our medium-
to long-term targets. We are very confident of our growth
opportunities to support 3 to 5% organic sales growth and
mid-single-digit organic adjusted EBIT growth with quality margins,
further deleveraging, and funding inorganic growth from our strong
cash flow generation. These medium- to long-term targets point to
the 2021 outlook of organic sales growth of 3 to 5%, combined with
a low single-digit organic increase in adjusted EBIT, delivered in
a quality way, with A&P trending back towards the FY 19
level."Corporate ResponsibilityJDE Peet's'
Corporate Responsibility strategy is built on three pillars:
Common Grounds, addressing the priority issues in
our supply chain; Minimised Footprint, aimed at
reducing our environmental impact; and Connected
People, engaging our employees and our communities.
In 2020, we made good progress on our Corporate Responsibility
Programme. Under our Common Grounds programme, we increased the
share of responsibly sourced coffee, and significantly increased
the number of smallholders we reach through our collaborative
programmes, despite the pandemic. In 2020, 87% of our primary and
secondary packaging was either reusable, recyclable or compostable,
while 33% of our packaging came from recycled materials, which is
restricted by current regulations limiting the use of recycled
content within packaging which is in direct food contact. We
successfully relaunched our leading Senseo brand, with an
industry-first compostable coffee pad containing 100% certified
coffee and low-environmental impact appliances to create a truly
sustainable offering for our consumers. Most recently, we partnered
with Nestlé in the UK to launch Podback, enabling consumers to
return our Tassimo T-discs and L’OR coffee capsules more easily
through a variety of methods.
Outlook 2021While uncertainty remains regarding
the future implications COVID-19 may have on global markets, we
believe that vaccination programmes around the world will lead to a
gradual lifting of lockdown measures in the course of 2021.
Within this context, we expect organic sales growth of 3 to 5%
in FY 21, assuming a moderate recovery in Away-from-Home. To fully
capture the growth opportunities we see in the coming years, we
will step up our investments for growth in 2021, notably in
marketing and innovation support. With these investments in growth,
we expect organic adjusted EBIT growth to be in the low
single-digit range in FY 21.
We remain committed to reducing our leverage to below 3x net
debt to adjusted EBITDA.
Medium- to Long-Term TargetsFollowing the
unprecedented developments related to the COVID pandemic and the
long-lasting changes the company expects they will have on consumer
behaviour, the company has reviewed its strategy in recent
months.
While management has concluded that the company's strategy will
not be subject to any material changes, we are further encouraged
by the future growth opportunities the team has identified.
Consistent with JDE Peet's commitment to focus on the quality and
sustainability of its organic sales growth and profitability, the
company has decided to link its profitability target more closely
to its organic sales growth target.
As a result, the company targets for the medium- to long-term to
deliver organic sales growth of 3 to 5% and mid-single-digit
organic adjusted EBIT growth with quality margins. In addition, the
company continues to target a Free Cash Flow conversion of
approximately 70%.
More information about the company's strategy and future growth
opportunities will be shared with institutional investors and
equity research analysts during a virtual Strategic Update meeting
on Thursday 31 March 2021.
DividendJDE Peet's' Board
proposes to pay a dividend of EUR 0.70 per share in cash related to
FY 20. The dividend will be paid in two instalments of EUR 0.35
each. The first payment date will be on Friday 16 July 2021, with
the ex-dividend date on Monday 12 July 2021 and the record date on
Tuesday 13 July 2021. The second payment date will be on Friday 28
January 2022, with the ex-dividend date on Monday 24 January 2022
and the record date on Tuesday 25 January 2022. The dividend
proposal is subject to approval by the Annual General Meeting of
Shareholders to be held on Thursday 17 June 2021.
Financial Review Full-Year
2020
in EUR m |
FY 20 |
FY 19 |
Organic |
Reported |
(unless otherwise stated) |
change |
change |
Sales |
6,651 |
6,945 |
-0.2 |
% |
-4.2 |
% |
Adjusted EBIT |
1,278 |
1,255 |
6.2 |
% |
1.9 |
% |
Underlying profit for the
period |
787 |
801 |
- |
- |
Underlying EPS1,2
(EUR) |
1.57 |
- |
- |
- |
Reported EPS (EUR) |
0.80 |
- |
- |
- |
1
Underlying earnings (per share) excludes all adjusting items (net
of tax) |
2 Based
on a pro-forma average number of shares of 499,709,030 |
In FY 20, total sales decreased by 0.2% on an organic basis. Our
In-Home businesses delivered record-high organic sales growth of
9.1% as lockdown measures shifted a significant part of
Away-from-Home consumption to In-Home. The Away-from-Home
activities showed a relatively stable organic sales performance in
H2 versus H1, despite a wave of new lockdown measures in Q4,
resulting in a full-year organic sales decline of -30.0%.
Total organic sales growth reflects a volume/mix effect of -1.0%
and 0.8% in price. Changes in scope and other changes decreased
sales by 0.4% while foreign exchange had a negative impact of 3.6%.
Total reported sales decreased by 4.2% to EUR 6,651 million.
Adjusted EBIT increased organically by 6.2% to EUR 1,278 million
driven by strong double-digit growth in all three CPG segments and
Peet's, partially offset by a decline in the Away-from-Home
businesses. Including the effects of foreign exchange and scope
changes, adjusted EBIT increased by 1.9%.
Underlying profit - excluding non-recurring items - decreased by
1.7% to EUR 787 million as a higher operating profit was offset by
greater adjusted net financial expenses.
Free cash flow of EUR 877 million included EUR 84 million of
payments related to the IPO and EUR 193 million of future tax
payments brought forward.
Net leverage improved to 3.2x net debt to adjusted EBITDA from
4.2x at the end of FY 19. We continue to make significant progress
on our deleveraging priority and we are well positioned to reduce
our leverage to below 3x. On 11 November 2020, Fitch assigned an
investment grade rating 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 1,064 million consisting of a cash position of EUR 389 million
and available committed RCF facilities of EUR 675 million.1This
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 7 of this press release.
For the full and original version of the press release click
here For the presentation 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 full-year 2020 results. A live and on-demand audio
webcast of the conference call will be available via JDE Peet’s’
Investor Relations website.
Enquiries
MediaMichael OrrMedia@JDEPeets.com+31 20 558
1600
Investors & AnalystsRobin
JansenIR@JDEPeets.com+31 6 159 44 569
About JDE Peet’sJDE Peet’s is the world's
largest 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.Important
Information
Market Abuse RegulationThis press release
contains information within the meaning of Article 7(1) of the EU
Market Abuse Regulation.
PresentationThe 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 2019 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.
Forward-looking StatementsThese 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 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
filings with the Netherlands Authority for the Financial Markets
(Stichting Autoriteit Financiële Markten).
Market and Industry DataAll 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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