TREVISO, Italy – The consolidated results for year 2022 have been approved by the Board of Directors of De’ Longhi SpA. In the 12 months: revenues of € 3,158.4 million, slightly down by -2% (-9% at constant exchange rates); adjusted Ebitda at € 362 million, equal to 11,5% of revenues (compared to 16% in 2021); net profit of € 177.4 million, equal to 5.6% of revenues (compared to 9.7% in 2021); positive net financial position of €298 million, down by € 126 million compared to the end of 2021, but strongly recovering in the fourth quarter with a positive cash flow of €270 million.
De’ Longhi in the fourth quarter:
- revenues down by 3.9% to € 1,029.8 million (-7% at constant exchange rates);
- adjusted Ebitda at € 150 million and equal to 14,66% of revenues (compared to 14.7% in 2021);
- net profit of € 78 million, equal to 7.6% of revenues (compared to 7.3% in 2021).
The Board of Directors has proposed the distribution of a dividend of € 0.48 per share, equal to a pay- out ratio of 41% in line with the Group’s dividend policy.
In the words of the ceo, Fabio de’ Longhi:
“In general, I am very satisfied with how the Group was able to react in the face of the extraordinarily challenging and complex scenario that arose in 2022, considering how this scenario led to a deterioration in consumer confidence and purchasing power and with what intensity it has put a strain on the management of production costs of our entire industrial sector.”
“The excessive accumulation of inventories in the first 9 months required the implementation of extraordinarily measures aimed at bringing the warehouse under control and consequently reducing the extraordinary costs generated by production inefficiencies and stock management. The success of these actions is witnessed by the performance of margins and of the cash flow in the fourth quarter, positive by 270 milion Euro, made possible above all by the decrease in inventories from the peak at end of June to approximately 550 million Euro at the end of the year.”
“Year 2023 begins in a context not very dissimilar from the second half of 2022, which allows us to forecast a progressive improvement in the economic and consumptions’ climate in the second half of the year after a dfficult start, marked by a further de-stocking by the distribution whose effect will be added to the effects of our strategic choice to exit the mobile air conditioning market in the United States and of the challenging comparison with the extraordinary growth of the first months of the previous two years.”
“In this context, we therefore estimate that we will be able to close the year with slightly lower revenues and an adjusted Ebitda in the range of 370-390 million Euros.”
2022 was a year of great challenges and complexity, characterized by extraordinary and unpredictable political events and macroeconomic dynamics (above all inflationary pressures) that had a significant impact on the growth and profitability of the entire sector.
Specifically, after a sustained start to the year, in continuation of the positive growth trend highlighted in the previous quarters (especially as regards the coffee sector), in the subsequent quarters the Group had to deal with a generalized drop in demand, especially in Europe, that added to the intensification of inflationary pressures on some product cost components and extraordinary costs linked to an anomalous inventory level reached during the first half of the year.
To partially compensate for these effects, the Group maintained a policy of moderate price increases, together with implementing exceptional measures which made it possible, in the second half of the year, to bring the stock level back under control and well beyond the targets.
Finally, despite the challenging context, the Group has maintained a turnover well in excess of 3 billion Euros, also thanks to the strategic decision to give continuity to investments in advertisement and promotions, increasing vs. 2021, in particular with regards to the global campaign on coffee featuring Brad Pitt as De’ Longhi’s brand ambassador for coffee.
In 2022 revenues suffered a slight decrease of -2%, down to € 3,158.4 million.
After the first part of the year closed in positive territory, supported by a brilliant performance of coffee, over the following quarters the Group showed a generalized decline in turnover at a mid-single digit rate, mainly explained by the slowdown in consumption in Europe .
Turnover in the fourth quarter was also down (-3.9%), still characterized by conservative consumer behavior and the consequent de-stocking of distribution.
The currency component (including hedging management) made a positive contribution to growth of 3.9 percentage points in the 12 months and 3.1 percentage points in the fourth quarter.
The currency that, more than any other, weighed on the Group’s accounts during the year was the US Dollar, whose appreciation supported the value of sales especially of North America and the Middle East regions; at Ebitda level, however, most of this positive effect was diluted, due to the negative impact of a stronger Dollar on production costs, even if the hedges implemented by the Group succeeded in limiting the dynamics, so allowing to close the year with a positive currency effect on the margin of € 14 million.
As already mentioned, during 2022 several macroeconomic factors weakened the consumers’ purchasing power and the demand for goods in the European area, while in the other non-European regions the general market climate was more positive.
In more detail:
• in South-Western Europe all the main markets recorded a drop in sales both in the 12 months and in the fourth quarter, with the only significant exception of a partial recovery of Germany in the quarter, with a turnover in line with the previous year;
• sales were down double-digit in North-Eastern Europe, both in the twelve months and in the fourth quarter, mainly due to the direct impact of the Russian-Ukrainian conflict, with the exception of a few markets, including Poland and Hungary, which have instead outlined a growing trend;
• the MEIA region remained in positive territory both in the twelve months and in the quarter, benefiting from a favorable exchange rate effect which more than compensated for the lack of vitality of the volumes’ trend;
• the America area achieved double-digit growth in the twelve months and in the fourth quarter, thanks to a significant acceleration in the coffee segment and supported by a significant positive effect of the currency in both periods;
• lastly, the Asia Pacific region achieved a marked growth both at current values and at constant exchange rates, showing a growing contribution from the “greater China” market, whose sales reached 138 million Euros (+32% in the year).
In terms of product segments:
• coffee machines for households showed a positive trend, both in the twelve months and in the fourth quarter, thanks to the expansion of the core categories – fully automatic and manual machines – which benefited from greater resilience in consumption and a better market penetration;
• the cooking and food preparation segment closed the year and quarter with a marked decline, in all the main product families, due to the generalized weakness of consumption in the kitchen sector and a challenging comparison with the extraordinary results achieved by the Group in the previous two years;
• as to the remaining segments, we highlight the growth in the year, as well as in the fourth quarter, of the comfort segment (portable air conditioning and heating), supported by the good performance of heating products, which more than offset the decline in portable air conditioning, while the the home care segment (floor care and ironing) contracted in the year and in the quarter;
• finally, the contribution of the professional coffee segment, represented by the newly acquired Eversys, was largely positive, showing a high-double-digit growth trend in all quarters of 2022, almost doubling its turnover during the year.
