Dutch coffee and tea company JDE Peet’s recently reported an increase in net profits for mid-2022. The company posted a net profit of EUR508 million (US$516.5 million) compared with EUR382 million (circa $US517.5 million) for the year-earlier period. Contrary to the company’s forecast of a lower profit of EUR325 million (circa US$331 million), sales have increased.
Half-way through 2022, we delivered very well on our commitments, despite unprecedented economic and geopolitical disruptions, exacerbated by the tragic war in Ukraine. Our strong set of results is a testament to the resilient growth profile of JDE Peet’s, supported by powerful brands, leading market positions and talented teams around the world.
Fabien Simon, JDE Peet’s, CEO
Sales of organic products “were 15.7% up (+19.7% reported), driven by +15.9% price and stable volume/mix of -0.2%. Organic gross profit rose by 1.4%, coupled with increasing investments for growth (organic SG&A +4.2%).” Organic EBIT decreased by 2.1 per cent to EUR 631 million due to increased investments in advertising, digital and emerging market capabilities.
Simon added that realising growth was not the only goal that Peet’s achieved. The sustainability agenda is one of the company’s main objectives, as it tries to lift the industry standard by targeting its goal of 80% responsibly sourced coffee by the end of 2022 and 100% by 2025. The company further minimised its carbon footprint by increasing the use of renewable electricity in manufacturing in the first half of 2022.
Responsible sourcing and carbon footprint reduction, together with connecting people, are two of the three pillars of the company’s Common Grounds sustainability program. Through this programme, JDE Peet’s “has embarked on a journey built on authenticity, to support inclusive and regenerative behaviours from farm to cup and to embrace circular practices across the entire value chain.”
Based on the progress made in the first half of 2022, we remain confident to reach our full-year outlook, while we continue to navigate, with humility and agility, the unpredictable inflationary environment, geo-political unrest and ongoing effects of the pandemic.
Fabien Simon, JDE Peet’s, CEO
JDE Peet’s continues to expect double-digit organic sales growth, with disciplined price adjustment for inflation, while targeting a stable level of gross profit year-on-year. The company will continue to invest in its people and in strategic growth opportunities while keeping an eye on other cost items. It is also expecting a free cash flow of at least EUR1 billion (circa US$1.02 billion).
