Slide 1: Half-Year Results 2023
HALF-YEAR RESULTS 2023 2 AUGUST 2023
Slide 2: Agenda
AGENDA BUSINESS PERFORMANCE & OUTLOOK FABIEN SIMON FINANCIAL PERFORMANCE SCOTT GRAY QUESTIONS & ANSWERS
Slide 3: Important Information
IMPORTANT INFORMATION Presentation The condensed consolidated unaudited financial statements of JDE Peet’s N.V. (the There are a number of factors that could affect the Group’s future operations and could cause “Company”) and its consolidated subsidiaries (the “Group”) are prepared in accordance tho
Slide 4: Business Performance & Outlook
BUSINESS PERFORMANCE & OUTLOOK FABIEN SIMON
Slide 5: Highlights First-Half 2023
HIGHLIGHTS FIRST-HALF 2023 • Resilient financial performance, in a category that has adjusted post-pandemic, and operating in a sticky inflationary environment - Organic sales growth of +3.5%, with moderate volume/mix decline - Sales performance recovering in Europe, yet slower than anticipated - Or
Slide 6: Encouraging top-line growth albeit flat in Europe
ENCOURAGING TOP-LINE GROWTH ALBEIT FLAT IN EUROPE ORGANIC SALES GROWTH KEY HIGHLIGHTS Vol/Mix • Ongoing disciplined pricing for inflation Price +15.7% +7.6% Total • Away-from-Home back to pre-pandemic level +7.9% +15.4% +3.5% • Global In-Home industry declining in volume +15.9% +4.2% +4.3% +0,4% +6.
Slide 7: Operating in a persistent inflationary environment
OPERATING IN A PERSISTENT INFLATIONARY ENVIRONMENT COGS INFLATION KEY HIGHLIGHTS • Following historically high inflation in 2022, high single- FY 20 LSD % digit COGS inflation expected in 2023 • Most recent green coffee developments: FY 21 HSD % • Robusta reaching 15-yr high price / Arabica softenin
Slide 8: Staying the course to build a stronger global pure player
STAYING THE COURSE TO BUILD A STRONGER GLOBAL PURE PLAYER MORE GLOBAL, in a more fragmented world • Focusing on quality market share & shape in Europe, and reset brands-innovations-ESG investments • Building new growth pools, accelerating in the US / Greater China / Selective emerging markets • Inte
Slide 9: Strategic reshape bearing fruit, with global share gain
STRATEGIC RESHAPE BEARING FRUIT, WITH GLOBAL SHARES GAIN COMPETITIVE RESULT VS THE OUTPERFORMING THE MARKET GLOBALLY HIGH-PERFORMING GLOBAL LEADER JDEP market share 2020-2023 (JDE Peet’s footprint) Market share 2020-2023 (JDE Peet’s footprint) RELATIVE MARKET SHARE PERFORMANCE 2020-2023 vs HIGH-PERF
Slide 10: Focus and disciplined execution translating into quality shares
FOCUS AND DISCIPLINED EXECUTION TRANSLATING INTO QUALITY SHARES DIVERSIFYING PORTFOLIO BEYOND NON-EURO COUNTRIES GAINING SHARE ACROSS HIGHEST PRICED & MARGIN CATEGORIES JDEP market share 2022-2023 JDEP market share 2022-2023 . EUROPE APAC US LARMEA BEANS INSTANT SINGLE SERVE R&G +1% +6% +7% +7% 9 6
Slide 11: Developed markets – in-home consumption normalising
DEVELOPED MARKETS – IN-HOME CONSUMPTION NORMALISING DEVELOPED MARKETS DRIVERS FORWARD EXPECTATIONS All regions H1 23 Organic Sales • Post-COVID normalisation … New base, out of normalisation Growth • Less waste & pantry-loading … New base, less impact VOLUME/MIX Incremental Europe specific … Back on
Slide 12: US & Greater China – accelerating growth with discipline
US & GREATER CHINA – ACCELERATING GROWTH WITH DISCIPLINE UNITED STATES GREATER CHINA • Peet’s household penetration increase • Successful omni-channel strategy and share outperformance in its competitive set • High-teens organic sales growth in H1 23 • New business venture, launching L’OR • Greater
Slide 13: Brazil – intended acquisition of Maratá Coffee & Tea
BRAZIL – INTENDED ACQUISITION OF MARATÁ® COFFEE & TEA • Brazil is the world’s largest coffee market in cups • Maratá® Coffee & Tea is the #2 player in the northern regions of Brazil • Two factories, broad distribution, 1,200 employees • Complementary to JDEP Brazil • Revenue and cost synergies • Min
Slide 14: Russia – transitioning to a local portfolio of brands
RUSSIA – TRANSITIONING TO A LOCAL PORTFOLIO OF BRANDS • Reconfirming our position on Russia at a Dutch Parliament hearing • Following the actions we already took in 2022, now transitioning to a local portfolio of brands • Impairment of JACOBS® brand of EUR 185 m • Transition expected to be completed
Slide 15: Bringing the sustainability agenda to the next level
BRINGING THE SUSTAINABILITY AGENDA TO THE NEXT LEVEL KEY HIGHLIGHTS • Announced introduction of fully compostable capsule and introduction of, first in the industry, paper pack for soluble coffee • Deployed Carbon & Packaging Accounting • Published Water Stewardship Policy and Nutrition Policy • ISS
Slide 16: Outlook 2023
OUTLOOK 2023 Full-year organic sales growth at the high end of the mid-term range of 3-5%, with growth acceleration and a more balanced contribution from volume-mix-price in H2 FY organic Adj. EBIT growth between low single-digit positive and low single-digit negative, with meaningfully lower contri
Slide 17: Financial Performance
FINANCIAL PERFORMANCE SCOTT GRAY
Slide 18: Half-Year 2023 Results
HALF-YEAR 2023 RESULTS ORGANIC SALES GROWTH PROFITABILITY CASH & DEBT Organic sales growth Adjusted EBIT Free cash flow 3.5% EUR 581 m EUR 14 m In-Home Away-from-Home Organic growth Reported growth Net leverage +2.2% +9.0% -3.0% -7.9% 2.8x Underlying earnings per share EUR 0.85 18
Slide 19: Sales development
SALES DEVELOPMENT DRIVEN BY POSITIVE PRICING AND RESILIENT VOLUMES Reported growth Organic growth +3.5% +2.4% • Organic growth driven by pricing, partially offset by negative vol/mix in Europe’s CPG business 6.8% -1.6% 0.4% 3,988 3,896 -3.3% • 3 out of 4 segments with positive vol/mix • Away-from-Ho
Slide 20: Growth supported by the strength of JDE Peet's portfolio
GROWTH SUPPORTED BY THE STRENGTH OF JDE PEET’S’ PORTFOLIO ORGANIC SALES GROWTH GEOGRAPHIES CHANNELS Developed Emerging markets In-Home Away-from-Home markets +1.7% +9.4% +2.2% +9.0% BRANDS / PRICE POINTS CATEGORIES Regional & Local SiSe, Beans & Global brands Others brands other premium +11.7% +1.4%
Slide 21: (Adjusted) EBIT development
(ADJUSTED) EBIT DEVELOPMENT ORGANIC ADJUSTED EBIT DECLINED 3%, WITH STABLE GROSS PROFIT Reported growth Organic growth -3.0% -7.9% 631 -0.9% -4.0% 581 * In EUR m, unless otherwise stated SG&A includes a.o. A&P, Warehousing & distribution, Repairs-maintenance-&-utilities, Selling expenses, Rental & l
Slide 22: Half-year 2023 performance by segment
HALF-YEAR 2023 PERFORMANCE BY SEGMENT 3 OUT OF 4 SEGMENTS DELIVERED OSG BETWEEN +5% AND +10%, WITH POSITIVE VOLUME/MIX EUROPE LARMEA APAC PEET’S Organic Sales Growth 0.3% 10.0% 4.7% 8.6% Organic Adjusted EBIT (8.4%) 17.4% (21.6%) 10.1% Growth 4-yr CAGR Organic Adj. (4.4%) 19.1% 4.7% 10.3% EBIT Growt
Slide 23: Underlying profit development
UNDERLYING PROFIT DEVELOPMENT UNDERLYING EPS DECREASED BY 19.6% DUE TO FAIR VALUE CHANGES OF DERIVATIVES AND FOREX Underlying EPS Underlying EPS EUR 1.05 EUR 0.85 Performance excl. FV and FX changes +4.6% 32 -136 523 -40 32 411 FV changes of derivatives, FX results and others *In EUR m, unless other
Slide 24: Free cash flow and net debt development
FREE CASH FLOW AND NET DEBT DEVELOPMENT REFLECTING ANTICIPATED NORMALISATION OF WORKING CAPITAL FREE CASH FLOW NET DEBT DEVELOPMENT FREE CASH FLOW 4,220 EUR 14 m 4,050 3-YR AVG FCF1 EUR 1,072 m 3-YR AVG FCF CONVERSION1 69% 1 Based on 3-year last twelve months *In EUR m, unless otherwise stated 24
Slide 25: Net leverage and net debt development
NET LEVERAGE AND NET DEBT DEVELOPMENT NET LEVERAGE WELL BELOW 3.0X 6,200 6 5,552 5,090 5.5 5,200 4,661 5 4,253 4,435 4,220 4,200 4,050 4.5 NET LEVERAGE 4 3,200 2.8x 3.4x 3.5 3.2x 2,200 3.0x 3 2.8x 2.8x 2.7x 2.6x 2.5 1,200 2 200 1.5 30 Jun 2020 31 Dec 2020 30 Jun 2021 31 Dec 2021 30 Jun 2022 31 Dec 2
Slide 26: Strong debt maturity profile
STRONG DEBT MATURITY PROFILE WITH ALL FUTURE MATURITIES BELOW 3-YR AVG EXPECTED FCF LEVEL OF EUR 1 BN DEBT MATURITY PROFILE1 0.5% Avg. cost of debt2 1.5 FCF (3-yr avg) 0.8 0.8 4.5y Avg. maturity 0.7 0.5 0.5 0.5 0.5 0.6 EUR Total liquidity 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2.2 bn
Slide 27: Capital allocation priorities
CAPITAL ALLOCATION PRIORITIES ORGANIC GROWTH Invest behind organic growth opportunities within our existing business to support growth OPTIMAL LEVERAGE Target an optimal leverage of around 2.5x Continue to pursue inorganic growth opportunities, but always in line with our highly INORGANIC GROWTH sel
Slide 28: Questions & Answers
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Slide 29: Appendix
APPENDIX
Slide 30: Reported EBIT to underlying profit
REPORTED EBIT TO UNDERLYING PROFIT H1 23 H1 22 Reported EBIT 323 518 ERP system implementation (3) (3) Transformation activities and corporate actions (44) (17) Share-based payment expense (22) (22) Mark-to-market results 55 (15) M&A / deal costs (5) (2) PPA Amortization (54) (54) PPA Impairment (18
Slide 31: Reported to adjusted income tax expense
REPORTED TO ADJUSTED INCOME TAX EXPENSE H1 23 H1 22 Reported Financial income and expense (49) 131 Results on legacy derivatives (85) Adjusted Financial income & expense (49) 46 H1 23 H1 22 Reported income tax expense (76) (144) Reported ETR 28.4% 22.2% Tax reserves and tax audit adjustments 3 (2) (
Slide 32: A coffee & tea for every cup
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