JDE Peet's, one of the world's largest coffee companies, has reported a 2% rise in full-year core profit that came in slightly ahead of analysts' expectations, and forecast 'stable' profit for 2022 amid strong inflation.
Full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at €1.30 billion. Analysts in a company-compiled poll had seen unchanged EBITDA from 2020, at €1.28 billion.
'Unprecedented Year' Of Inflation
JDE Peet's chief executive Fabien Simon said he was confident that the company, which owns a range of coffee and tea brands including Pickwick, Senseo, Tassimo, TiOra and L'OR, would "successfully navigate an unprecedented year of inflation" over the coming year.
“I am very pleased with JDE Peet’s' performance in 2021," he said. "We delivered on all our commitments, in a high-quality way, in another year of unexpected global disruptions. I would like to thank our teams and partners for their resilience and exceptional agility in managing the challenging operating conditions."
At €7 billion, 2021 sales were also slightly ahead of analysts' forecasts of €6.87 billion.
Demand for coffee is relatively inelastic, and the company has some pricing power due to its strong brand names. But it must strike a balancing act in passing on higher green coffee costs on to consumers to prevent them from defecting to other brands.
Most of JDE Peet's coffee is sold at supermarkets, though the company also has a smaller business in coffee shops led by Peet's, a prominent brand in the United States, which got a boost after markets reopened in the second half of the year.
The company forecast that it would see double-digit sales growth in 2022 but 'stable' gross profit.
Shares are down 20% over the past year, closing at €26.23 on Tuesday.