TURIN, May 20, 2014 – The Lavazza general shareholders’ meeting has approved the financial statements of Luigi Lavazza S.p.A. and the Group’s 2013 consolidated accounts.
The company reported a turnover of EUR 1,340.1 million, a rise of 0.7% on EUR 1,330.7 million in 2012, EBITDA of EUR 245.7 million (EUR 176.6 million the previous year) and EBIT of EUR 145.4 million (a rise of 48% on EUR 98.2 million the previous year).
Consolidated profit for the year, at EUR 84.8 million, was slightly down on the 2012 figure of EUR 97.1 million (which, however, included a capital gain of EUR 38 million from the sale of a share packet in Keurig Green Mountain).
Turning to cash flow, the company closed the year with a cash balance of about EUR 387.2 million compared with EUR 288.1 million in 2012.
While the domestic market continues to contract, Lavazza maintained its retail segment leadership in 2013 with a market share by volume of 44.4% (+0.6%) and by value of 47.5% (source: Nielsen).
The percentage of total sales on international markets stands at 46% and looks set to rise to 50% in the short term, with a long-term strategic goal of 70%.
In 2013, the Group continued to implement its strategic plan based on three main guidelines: a focus on certain priority markets, with different business models based on the real situation in each geographical area; the acceleration of product and system research and innovation projects; the internal reorganisation process which aims to improve process efficiency and cost containment; and the strengthening of quality partnerships in all business areas.
“In 2013 the company continued to work on, and to a large extent completed, the development and consolidation initiative launched three years ago. Profitability and cash reserves grew still further, as they have done for the last two years, despite the slump in consumption and an important market investment to stay close to Italian consumers, who have repaid us with excellent results in terms of market share recovery,” said Lavazza CEO Antonio Baravalle.
Lavazza CEO Antonio Baravalle “As an unlisted, family-run business, and unlike a public company, we have a stable owner with excellent governance who is open to discussion and the decision to continue to invest, even if this means reduced earnings in the short term”.
Lavazza has always been one of the leading champions of Made in Italy products and continues to believe strongly in system Italy, which remains the company’s centre of operations with four production plants. Specifically, the company plans to invest over EUR 60 million in its Gattinara production facility near Vercelli, where capsule products for espresso systems are produced and where the first Roast & Ground line will be launched early in 2015.
Turning to international operations, the key countries for the company in this phase continue to be the United Kingdom, Germany and the United States. Lavazza’s goal over the coming five years is for the United States to become the company’s second-ranking market.
The key factors in this will be the development of the industrial and commercial alliance with Keurig Green Mountain, which has been a partner since 2010, and a multi-channel, multi-product strategy, which is already underway and will leverage all categories and segments: from Roast & Ground capsules for both home and away from home consumption.
In historic areas like Australia, Central and Eastern Europe and the Mediterranean rim, Lavazza will continue to work through foreign distributors based on an indirect business model. The company also confirms its continued interest in a presence in emerging markets, Brazil and Russia in particular, with a view to achieving and maintaining a balance between adequate penetration and profit generation.
So far as concerns the market trend in the early months of 2014, Baravalle commented: “the current year got underway with a complex first quarter because of the steep rise in the price of raw coffee, which has almost doubled since January, not as a result of speculation, but of the serious climatic situation, particularly in Brazil.
This marks the start of a two to three year phase in which raw coffee will be in short supply and therefore subject to strong speculative pressures, which will inevitably have an impact on both our and all our competitors’ profitability.
