JDE Peet’s reported an organic rise in 2023 operating profit on Wednesday, after analysts had forecast a decline.
The coffee company said it expected the growth to continue this year.
The maker of coffee brands Jacobs, L’Or Tassimo and Douwe Egberts posted adjusted earnings before interest and taxes (EBIT) of €1.13 billion for 2023.
This is down 8.1% on a reported basis but up 1.1% organically.
A company-compiled consensus shows that the EBIT bear analysts’ expectations for a 1.8% decline.
In 2022, the group’s adjusted EBIT fell 9.3% organically.
Long-Term Profitability
The group produces and supplies coffee, tea, and coffee machines
It sees annual organic sales growth at the lower end of its medium-term guidance range of 3% and 5%.
Analysts were expecting 3% growth.
“We are back to our long-term profitability algorithm, excluding Russia’s performance,” said chief executive Fabien Simon in a statement.
Excluding activities in Russia, JDE Peet’s operating profit grew more than 6% organically last year.
The company said in August that it would stop selling western coffee and tea brands in Russia by the end of the year. It would continue to sell them only under local brands.
It said at the time that rebranding Jacobs alone for the Russian market had resulted in a €185 million impairment.
In the Latin America, Russia and Middle East (LARMEA) region, adjusted operating profit fell 21.1% organically to €147 million in 2023.
For 2024, the company is aiming for mid-single-digit percent organic EBIT growth, excluding Russia.
JDE Peet’s expects low single-digit growth in the first half of the year, balanced by an acceleration in the second half.
Read More: JDE Peet's Lowers Earnings Target Due To Shift To Local Brands In Russia
