The following is a summary of the JDE Peet's N.V. (JDEPF) Q4 2023 Earnings Call Transcript:
Financial Performance:
JDE Peet's noted an organic sales growth of 4.3% for the second half of 2023 and an increase in adjusted EBIT by 5.5% organically.
The company reduced net debt and achieved a net leverage of 2.7x, generating €0.5 million in free cash flow in the 2nd half of 2023.
For 2023, the company reported an overall organic sales growth of 3.9% and an adjusted EBIT growth of 1.1%; without Russia's performance, the growth would have been over 6%.
The underlying earnings per share for 2023 was €1.51, with a net debt decrease of €160 million.
The company expects a mid-single digit organic growth in adjusted EBIT for the second half of 2024, and a low single-digit growth for the first half.
The net leverage is projected to be around 3x by end of 2024, with free cash flow expected to exceed the 2023 level.
Business Progress:
JDE Peet's is in the process of a transformation with 5 operating facilities closed, SKU count reduced by over 20%, and workforce reduced by 10% by the end of 2023.
The company doubled investment in development areas such as working media, R&D, product innovations, sustainability, and digital/e-commerce capabilities.
In line with sustainability efforts, JDE Peet's responsibly sourced green coffee increased from 21% in 2020 to 98% in 2023, reducing greenhouse gas emissions by 9.3% in 2023.
Plans are in place to conclude two transactions in Q1 2024, one with Marata's coffee and tea in Brazil and a global CPG license of Caribou Coffee.
Business expansion in the U.S. market, replicating their European aluminum capsule agenda, is underway.
The company is anticipating a recovery in the coffee industry post-pandemic, based on observed consumer behavior.
A proposal to the AGM in May to pay a dividend of €0.70 per share for the full year 2023 has been made by the board.
More details: JDE PEETS N.V. IR
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