JDE Peet’s reports half-year results 2023 - Seite 2

During this semester, we announced, among others, the intention to launch a new, fully compostable coffee capsule, which allows for an uncompromising high-quality in-cup experience, and we announced the intention to launch a new paper pack for our soluble coffee ranges, which is recyclable and is the first of its kind in the coffee market. Moreover, the coffee from this new paper pack will generate the lowest carbon footprint within our existing range of products.

In addition, JDE Peet's has become a member of the ILO Child Labour Platform, to tackle the root causes of child labour in the coffee supply chain, and we published our Water Stewardship Policy and our Nutrition Policy.

Update on Russia

Since the start of the war, JDE Peet's has sought to ensure that its business in Russia is operated as a stand-alone business to the greatest extent possible. The company has now taken the next step by transitioning to a local portfolio of brands, which resulted in a non-cash impairment of EUR 185 million of the Jacobs brand in H1 23 and is expected to lead to meaningfully lower contribution from Russia in H2 23.

Outlook 2023

JDE Peet's expects the business environment to remain volatile and vulnerable for the remainder of 2023. As there is uncertainty on the impact of the transition from international brands to local brands in Russia, the company now expects to deliver the following for full-year 2023:

• Organic sales growth at the high end of its medium-term range of 3 - 5% (unchanged)
• Adjusted EBIT to fall within the range of a low single-digit organic increase and a low single-digit organic decline (updated)
• Net leverage below 3.0x, with Free Cash Flow of around EUR 400 million, post normalisation of working capital, confirming an ongoing run-rate of EUR 1 bn on a 3-yr average (additional)
• A stable dividend (unchanged)

FINANCIAL REVIEW HALF-YEAR 2023

in EUR m (unless otherwise stated)

	6M 2023	6M 2022	Organic change	Reported change
Sales	3,988	3,896	3.5%	2.4%
Adjusted EBIT	581	631	-3.0%	-7.9%
Underlying profit for the period	411	523	-	-21.4%
Underlying EPS (EUR)1, 2	0.85	1.05	-	-19.6%
Reported basic EPS (EUR)2	0.41	1.02	-	-59.8%
1 Underlying earnings (per share) exclude all adjusting items (net of tax)
2 Based on weighted average number of shares outstanding

Total reported sales increased by 2.4% to EUR 3,988 million. Excluding a -1.6% effect related to foreign exchange and 0.4% related to scope and other changes, total sales increased by 3.5% on an organic basis, with 3 out of 4 segments growing between 5% and 10% organically. Organic sales growth reflects a price effect of 6.8% and a volume/mix effect of -3.3%. In-Home sales increased organically by 2.2% and in Away-from-Home by 9.0%, resulting in a 4-yr organic CAGR of 6.7% for In-Home sales and 0.6% for Away-from-Home sales.