JDE Peet’s reports half-year results 2022

Successfully navigating the macro backdrop, with another strong set of quality results

PRESS RELEASEAmsterdam, 3 August 2022

Key items1

Organic sales up +15.7% (+19.7% reported), driven by +15.9% price and stable volume/mix of -0.2%
Organic gross profit up +1.4%, coupled with increasing investments for growth (organic SG&A +4.2%)
Organic adjusted EBIT down -2.1% to EUR 631 million
Free cash flow increased to EUR 696 million; leverage at 2.78x incl. EUR 500 million share buyback
Underlying EPS up +18.3% to EUR 1.05
Amplifying progress on sustainability commitments, with step-change in responsible sourcing
FY 22 outlook confirmed

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

“Half-way through 2022, we delivered very well on our commitments, despite unprecedented economic and geopolitical disruptions, exacerbated by the tragic war in Ukraine. Our strong set of results is a testament to the resilient growth profile of JDE Peet’s, supported by powerful brands, leading market positions and talented teams around the world.

We are successfully navigating through supply chain disruptions, pandemic effects and mounting inflation, while keeping course of our value creation agenda, centred around quality and inclusive revenue growth. E-commerce sales kept growing organically at a double-digit rate, as did revenue in the U.S. and in China in-home, while we are accelerating the store expansion there.

Confronted with an exceptional level of cost inflation, we stepped-up efficiencies, and leveraged portfolio and revenue management. We implemented affordable price increases of less than 1 euro-cent per cup, on average. As a result, the absolute gross profit held up well year-over-year.

Not only did we lead on pricing, delivered double-digit earnings growth per share and further increased our investments for growth, but we also amplified our sustainability agenda, with the ambition to elevate the industry standard, targeting 80% responsibly sourced coffee by the end of 2022.

Based on the progress made in the first half of 2022, we remain confident to reach our full-year outlook, while we continue to navigate, with humility and agility, the unpredictable inflationary environment, geo-political unrest and ongoing effects of the pandemic."Advancing on Sustainability

Through its Common Grounds sustainability programme, JDE Peet's has embarked on a journey built on authenticity, to support inclusive and regenerative behaviours from farm to cup and to embrace circular practices across the entire value chain. The sustainability programme consists of three pillars: Responsible Sourcing, fostering thriving agricultural supply chains; Minimised Footprint, to reduce the company's environmental impact; and Connected People, to engage the company's employees and its communities.

Through its responsible sourcing and supplier engagement programme, JDE Peet's is committed to a sustainable supply of coffee & tea from various origins that supports farming communities’ vision of prosperity and contributes to healthy ecosystems. Under this programme, JDE Peet's has significantly accelerated its journey towards responsibly sourcing 100% of its coffee by 2025 as the company substantially increased its responsibly sourced coffee target from 30% to 80% by the end of 2022.

JDE Peet's also made good progress in reducing its carbon footprint. In the first half of 2022, for instance, the company increased the use of renewable electricity in manufacturing to more than 40%. In addition, the company further improved the gender diversity of the Board through the appointments of three female Board members during the 2022 AGM.

Outlook 2022

JDE Peet's expects the business environment to remain volatile for the remainder of 2022 as input cost inflation, geo-political unrest and certain effects of the pandemic persist. Within this context, the company continues to expect 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 billion.

FINANCIAL REVIEW HALF-YEAR 2022

in EUR m (unless otherwise stated)

	6M 2022	6M 2021	Organic change	Reported change
Sales	3,896	3,254	15.7 %	19.7 %
Adjusted EBIT	631	636	-2.1 %	-0.8 %
Underlying profit for the period	523	446	-	17.3%
Underlying EPS (EUR)1, 2	1.05	0.89	-	18.3%
Reported basic EPS (EUR)2	1.02	0.76	-	33.9%
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 19.7% to EUR 3,896 million. Excluding a positive effect of 3.7% related to foreign exchange and 0.3% related to scope and other changes, total sales increased by 15.7% on an organic basis. Organic sales growth was driven by 15.9% in price and stable volume/mix of -0.2%. In-Home sales increased by 12.0% and sales in Away-from-Home increased by 33.7%, on an organic basis.

Total adjusted EBIT decreased by 0.8% to EUR 631 million on a reported basis. Excluding the effects of foreign exchange and scope and other changes, the Adjusted EBIT decreased organically by 2.1%, as slightly higher gross profit was offset by increased investments in advertising, digital and emerging markets capabilities, which, in turn, was partially offset by lower promotions. The organic increase in gross profit was driven by ongoing cost discipline, simplification, revenue management and pricing to offset inflation.

Underlying profit - excluding all adjusting items net of tax - increased by 17.3% to EUR 523 million, supported by lower interest expenses as a result of deleveraging and lower average cost of debt, following the company's refinancing in 2021, as well as by a reduction of other finance expenses, a favourable impact from derivatives, and an increase in financial income.

Net leverage increased slightly from 2.7x at the end of FY 21 to 2.8x net debt to adjusted EBITDA at the end of H1 22, as the company allocated EUR 500 million to buy back shares from its shareholder Mondelez International Holdings Netherlands B.V.

JDE Peet's liquidity position remains strong, with total liquidity of EUR 2.2 billion consisting of a cash position of EUR 0.7 billion (excluding restricted cash) and available committed RCF facilities of EUR 1.5 billion.

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CONFERENCE CALL & AUDIO WEBCAST

Fabien Simon (CEO) and Scott Gray (CFO) will host a conference call for analysts and institutional investors at 10:00 AM CET today to discuss the half-year 2022 results. A live and on-demand audio webcast of the conference call will be available via JDE Peet’s’ Investor Relations website. 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

Khaled RabbaniMedia@jdepeets.com+31 20 558 1753Investors & Analysts

Robin JansenIR@jdepeets.com+31 6 159 44 569About 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 special purpose financial statements of the Group as of, and for, the year ended 31 December 2021 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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