AMSTERDAM, The Netherlands – JDE Peet’s, the world’s largest pure-play coffee and tea group, said Tuesday that net profit and sales for 2020 both fell, as the impact of lost sales in cafes due to the Covid-19 pandemic outweighed a boom in home-use products. Full-year sales fell 4.2% to EUR6.65 billion ($7.89 billion) for 2020, just below the 6.68 billion seen in a company-compiled poll of analysts. On an organic basis, sales for the year declined 0.2%.
The Dutch coffee and tea maker made a net profit for last year of EUR308 million ($364.8 million) compared with EUR424 million a year earlier.
The company – which houses the Jacobs, Peet’s, L’OR, Senseo, Tassimo and Pickwick brands among its portfolio–said adjusted earnings before interest and taxes were up 1.9% at EUR1.28 billion, or up 6.2% on an organic basis.
Reflecting the impact of the pandemic, sales of packaged coffee products usually sold in grocery stores, its largest business, rose 7% in Europe, its largest market. Meanwhile sales of “Out of Home” coffee consumed in cafes, offices and schools, fell by 32%.
JDE Peet’s said it expects organic sales growth of between 3% and 5% this year, assuming a moderate recovery in the away-from-home channel. Organic adjusted EBIT is expected to grow in the low single-digit range, taking into account catch-up investments for growth, the company said.
CEO Fabien Simon said consumers were choosing higher-quality coffee and brands perceived as environmentally friendly or local.
“I believe it will probably take 18-24 months for the Out of Home environment to return to pre-COVID levels,” Simon said, pointing to lockdowns still in place in most of Europe in the first months of 2021.
“Having said that, we do have a very powerful at-home business where cups (of coffee) have been shifted to us.”
The board proposed a dividend of EUR0.70 a share in cash for 2020
JDE Peet’s: Key items
- 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
