JDE Peet’s Forecasts Stronger Organic Sales Growth for 2023, Despite Lower Net Profit
The Dutch coffee company, JDE Peet’s, anticipates a boost in organic sales growth this year, following the announcement of a lower-than-expected net profit for 2023. Despite stable sales during the second half of the year, the company’s financial performance was hindered by rising costs and finance expenses.
JDE Peet’s, which owns popular coffee brands such as Douwe Egberts, Peet’s Coffee, and L’Or, reported total sales of 8.19 billion euros for the fiscal year ending on December 31. This translates to an organic sales growth of 3.9%, falling within the company’s medium-term range of 3% to 5%. However, the company expects organic growth to reach the upper end of this range in the coming year.
The growth in sales was driven by a price effect of 4.7%, offset by a volume/mix effect of minus 0.8%. Despite these positive sales figures, JDE Peet’s net profit for 2023 was 281 million euros, a significant decrease from the previous year’s profit of 761 million euros.
The company’s adjusted earnings before interest and taxes (EBIT) reached 1.13 billion euros, slightly lower than expectations but in line with its guidance of a low single-digit decline and growth. Looking ahead to 2024, JDE Peet’s projects mid-single digit organic adjusted EBIT growth, excluding the performance of Russia. The company foresees slower growth in the first half of the year, which will be offset by a stronger performance in the second half.
Additionally, JDE Peet’s announced a dividend of 0.70 euros per share and stated its intention to maintain stable payouts.
Despite the challenges faced in 2023, JDE Peet’s remains optimistic about its future growth prospects and is focused on strengthening its organic sales in the coming year.
Analyst comment
Positive news: JDE Peet’s forecasts stronger organic sales growth for 2023, despite lower net profit.
As an analyst, I expect the market to respond positively to JDE Peet’s forecast of stronger organic sales growth in 2023. Despite the lower-than-expected net profit, the company’s focus on boosting sales and maintaining stable payouts is likely to generate investor confidence and drive market growth.
