JDE Peet’s reports full-year results 2021

High-quality growth, elevating the power of the company portfolio

PRESS RELEASE Amsterdam, 23 February 2022

Key items[1]

FY 21 organic sales up +6.1%, accelerating to +7.9% in H2
Deliberate increase in investments for growth (>EUR 110 mln), self-funded by gross profit up +5%
Solid market shares, while leading on price increases in the majority of geographies and categories
Organic adjusted EBIT up +1.5% to EUR 1,304 million
Free cash flow increased to EUR 1,368 million and leverage reduced to below 2.7x
Underlying EPS up +13.7% to EUR 1.79
Stepping up the progress on sustainability and raising the ambition
Proposal to pay a cash dividend of EUR 0.70 per share in two equal instalments

A message from Fabien Simon, CEO of JDE Peet’s

“I am very pleased with JDE Peet’s' performance in 2021. 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.

2021 marked the year where we refocused on our founding entrepreneurial values. We set out our new strategic framework, re-invested in our powerful portfolio, and reinforced our operational discipline, including taking the lead on pricing in the majority of our markets. As a result, our organic sales growth accelerated, the absolute margin per cup increased, so did the free cash flow generation.

In parallel, we stepped up our commitment to an inclusive growth model, with tracking and tangible progress on sustainability as well as a higher ambition going forward. Finally, we further strengthened our financial position and capital structure.

This year, we became a nimbler global coffee & tea pure player and our brands emerged stronger. This gives me confidence that JDE Peet’s can successfully navigate an unprecedented year of inflation in 2022.”

Advancing on Sustainability

JDE Peet's' sustainability strategy is built on three pillars: Common Grounds, to contribute to thriving agricultural supply chains; Minimised Footprint, to reduce its environmental impact; and Connected People, to engage the company's employees and its communities.

Under its Common Grounds programme, the company increased the number of smallholder farmers that were reached since 2015 to more than 470,000 through more than 50 collaborative projects across 18 countries, despite the pandemic. This also supported the increase in the share of coffee, tea and palm oil that were responsibly sourced in 2021. As such, the company is well on its way to have 100% of the company's coffee, tea and palm oil responsibly sourced by 2025.

JDE Peet's also made good progress in reducing its footprint. The company increased the share of packaging designed to be reusable, recyclable or compostable to 88% and achieved 40% recycled content in packaging, reaching its target ahead of time. In addition, its entire European manufacturing network plus five other manufacturing sites reached zero-waste-to-landfill status and overall manufacturing waste reduced by 15%.

Commitment to SBTi-approved targets to reduce GHG emissions

JDE Peet's has set SBTi-approved targets to reduce GHG emissions in its own operations and across its value chain, in line with the Paris Agreement commitment to limit warming to well-below 2°C. JDE Peet's has committed to reduce absolute GHG emissions for scope 1 & 2 by 25% and for scope 3 by 12.5% by 2030, from its 2020 base year. In 2021, GHG emissions across scope 1, 2 and 3 reduced by 5%.

Outlook 2022

JDE Peet's expects the business environment in 2022 to remain volatile as input cost inflation and some effects of COVID-19 might persist. Within this context, the company expects to deliver double-digit organic sales growth, with disciplined pricing for inflation, while aiming for a stable level of gross profit compared to last year. The company will continue to invest in its people and strategic growth opportunities, while keeping a tight focus on other cost items, and expects to deliver Free Cash Flow of at least EUR 1 bn.

Medium- to Long-Term Targets

For the medium- to long-term, JDE Peet's continues to target organic sales growth of 3 to 5% and mid-single-digit organic adjusted EBIT growth with quality margins, and a free cash flow conversion of approximately 70%.

Dividend

JDE Peet's' Board proposes to pay a dividend of EUR 0.70 per share in cash related to FY 21. The dividend will be paid in two instalments of EUR 0.35 each. The first payment date will be on Friday 15 July 2022, with the ex-dividend date on Monday 11 July 2022 and the record date on Tuesday 12 July 2022. The second payment date will be on Friday 27 January 2023, with the ex-dividend date on Monday 23 January 2023 and the record date on Tuesday 24 January 2023. The dividend proposal is subject to approval by the Annual General Meeting of Shareholders to be held on Wednesday 11 May 2022.

FINANCIAL REVIEW FULL-YEAR 2021

in EUR m (unless otherwise stated)

	FY 2021	FY 2020	Organic change	Reported change
Sales	7,001	6,651	6.1 %	5.3 %
Adjusted EBIT	1,304	1,278	1.5 %	2.0 %
Underlying profit for the period	899	787	-	14.2%
Underlying EPS (EUR) 1, 2	1.79	1.57	-	13.7%
Reported basic EPS (EUR)	1.53	0.80	-	90.6%
1 Underlying earnings (per share) exclude all adjusting items (net of tax)
2 Based on 501,951,089 shares outstanding (FY 20: 499,709,030) on 31 December 2021

In FY 21, total sales increased by 6.1% on an organic basis. The In-Home business continued to deliver strong organic sales growth of 5.0% while sales in Away-from-Home increased by 11.5% as the positive effects of (partial) re-openings in most regions more than offset the negative effects of new waves of lockdown measures, most notably in the second half of the year.

Total organic sales growth reflects a volume/mix effect of 3.5% and 2.5% in price. Changes in scope and other changes increased sales by 0.2% while foreign exchange had a negative impact of 1.0%. Total reported sales increased by 5.3% to EUR 7,001 million.

Adjusted EBIT increased organically by 1.5% to EUR 1,304 million driven by a 5.4% organic increase in adjusted gross profit which was partially offset by reinvestments in marketing, innovations and other strategic growth capabilities which included an organic increase in marketing spend of 27%, or EUR 87 million. Including the effects of foreign exchange and scope changes, adjusted EBIT increased by 2.0%.

Underlying profit - excluding all adjusting items net of tax - increased by 14.2% to EUR 899 million. It includes an underlying tax rate of 25% and was supported by lower interest expenses as a result of deleveraging and lower average cost of debt, as well as a reduction of other finance expenses.

Net leverage improved to 2.67x net debt to adjusted EBITDA from 3.23x at the end of FY 20.

Our liquidity position remains strong, with total liquidity of EUR 2.1 billion consisting of a cash position of EUR 0.6 billion and available committed RCF facilities of EUR 1.5 billion. For the full and original version of the press release click here

CONFERENCE CALL & AUDIO WEBCAST

Fabien Simon (CEO) and Scott Gray (CFO) will host a conference call for analysts and institutional investors at 11:00 AM CET today to discuss the full-year 2021 results. A live and on-demand audio webcast of the conference call will be available via JDE Peet’s’ Investor Relations website.

[1] This press release contains certain non-IFRS financial measures and ratios, which are not recognised measures of financial performance or liquidity under IFRS. For a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures, see page 7 of this press release.

ENQUIRIES

Media

Michael OrrMedia@JDEPeets.com+31 20 558 1600

Investors & Analysts

Robin JansenIR@JDEPeets.com+31 6 159 44 569

About JDE Peet’sJDE Peet’s is the world's leading pure-play coffee and tea company, serving approximately 4,500 cups of coffee or tea per second. JDE Peet's unleashes the possibilities of coffee and tea in more than 100 markets with a portfolio of over 50 brands including L’OR, Peet’s, Jacobs, Senseo, Tassimo, Douwe Egberts, OldTown, Super, Pickwick and Moccona. In 2021, JDE Peet’s generated total sales of EUR 7 billion and employed a global workforce of more than 19,000 employees. Read more about our journey towards a coffee and tea for every cup at www.JDEPeets.com.

IMPORTANT INFORMATION

Market Abuse Regulation

This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

Presentation

The condensed consolidated unaudited financial statements of JDE Peet’s N.V. (the "Company") and its consolidated subsidiaries (the "Group") are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). In preparing the financial information in these materials, except as otherwise described, the same accounting principles are applied as in the consolidated financial statements of the Group as of, and for, the year ended 31 December 2020 and the related notes thereto. All figures in these materials are unaudited. In preparing the financial information included in these materials, most numerical figures are presented in millions of euro. Certain figures in these materials, including financial data, have been rounded. In tables, negative amounts are shown in parentheses. Otherwise, negative amounts are shown by "-" or "negative" before the amount.

Forward-looking Statements

These materials contain forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995 concerning the financial condition, results of operations and businesses of the Group. These forward-looking statements and other statements contained in these materials regarding matters that are not historical facts and involve predictions. No assurance can be given that such future results will be achieved. Actual events or results may differ materially as a result of risks and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. There are a number of factors that could affect the Group’s future operations and could cause those results to differ materially from those expressed in the forward-looking statements including (without limitation): (a) competitive pressures and changes in consumer trends and preferences as well as consumer perceptions of its brands; (b) fluctuations in the cost of green coffee, including premium Arabica coffee beans, tea or other commodities, and its ability to secure an adequate supply of quality or sustainable coffee and tea; (c) global and regional economic and financial conditions, as well as political and business conditions or other developments; (d) interruption in the Group's manufacturing and distribution facilities; (e) its ability to successfully innovate, develop and launch new products and product extensions and on effectively marketing its existing products; (f) actual or alleged non-compliance with applicable laws or regulations and any legal claims or government investigations in respect of the Group's businesses; (g) difficulties associated with successfully completing acquisitions and integrating acquired businesses; (h) the loss of senior management and other key personnel; and (i) changes in applicable environmental laws or regulations. The forward-looking statements contained in these materials speak only as of the date of these materials. The Group is not under any obligation to (and expressly disclaim any such obligation to) revise or update any forward-looking statements to reflect events or circumstances after the date of these materials or to reflect the occurrence of unanticipated events. The Group cannot give any assurance that forward-looking statements will prove correct and investors are cautioned not to place undue reliance on any forward-looking statements. Further details of potential risks and uncertainties affecting the Group are described in the Company’s public filings with the Netherlands Authority for the Financial Markets (Stichting Autoriteit Financiële Markten) and other disclosures.

Market and Industry Data

All references to industry forecasts, industry statistics, market data and market share in these materials comprise estimates compiled by analysts, competitors, industry professionals and organisations, of publicly available information or of the Group's own assessment of its markets and sales. Rankings are based on revenue, unless otherwise stated.

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