JDE Peet’s reports full-year results 2022

Exceeded guidance, and executing the company's growth strategy with discipline

PRESS RELEASEAmsterdam, 22 February 2023

Key items1

Total sales up +16.4% to EUR 8.2 billion, of which +11.3% organically, driven by price
Gross profit up +3.3% supported by efficiencies, disciplined pricing and revenue management
SG&A increased by 10.6%, driven by working media and other growth-related investments
Adjusted EBIT down -5.9%, or -9.3% organically, to EUR 1,227 million, as SG&A increased
Underlying EPS up +6.3% to EUR 1.91
Free cash flow of EUR 1,358 million while leverage reduced to 2.65x
Significant progress made on ESG, recognised by external ESG rating agencies
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 the way JDE Peet's navigated 2022, a year impacted by the ongoing effects of unprecedented inflation, decreasing consumer confidence, and the tragic war in Ukraine.

Last year required us to make difficult but courageous choices on cost competitiveness and pricing leadership. We acted as a true category leader and were able to meet or exceed our financial commitments, without compromising on investments, nor on quality of our products and services.

In 2022, we delivered double-digit sales growth, increased our absolute gross profit, delivered strong free cash flow and higher EPS, while increasing investments to support our long-term growth ambition in areas such as marketing, innovation, digital commerce, emerging market capabilities and sustainability. Consequently, we are emerging stronger for 2023, with an elevated growth portfolio, a competitive market share position, a well invested business and a more productive and very engaged enterprise.

These many results and achievements were made possible by the resilience, resolution and agility of our people, who worked incredibly hard, together with every partner in our ecosystem, to manage these turbulent times, while simultaneously making continued strong progress on our growth- and purpose-led strategy.

Although many of the conditions and challenges we faced in 2022 will to some extent persist in 2023, we believe that our pure-play focus, strong fundamentals, brands and innovation capabilities position us well to continue to create attractive shareholder returns as well as societal value.”

ESG: significant progress made and ambition level raised

JDE Peet's' sustainability strategy is built on three pillars: Responsible Sourcing, fostering thriving agricultural supply chains; Minimising Footprint, to reduce the company's environmental impact; and Connecting 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. During the year, the company made strong progress towards its commitment of 100% responsibly sourced green coffee by 2025, reaching 77%, a significant improvement compared to the 30% reported in 2021. The primary driver for the increase resulted from the verification efforts of Enveritas, a non-profit organisation that verifies coffee purchases against sustainable coffee standards. JDE Peet's also achieved 100% responsibly sourced palm oil and partnered with the Rainforest Alliance in Turkey to deploy a programme to drive 100% responsible sourcing of its Ofçay teas by 2025. As such, the company is well on track to have 100% of its coffee, tea and palm oil responsibly sourced by 2025.

JDE Peet's also continued to make good progress in reducing its footprint. In 2022, the company reduced its scope 1 & 2 emissions by 15% and scope 3 emissions by 1% versus the 2020 baseline. During the year, JDE Peet's also defined a roadmap of initiatives that will enable the company to submit an even stronger and new SBTi ambition in 2023 to reach net-zero. In addition, 78% of the company's packaging components are now designed to be reusable, recyclable, or compostable. And by the end of the year, 22 of its manufacturing sites were zero waste-to-landfill. JDE Peet's also further increased the percentage of renewable energy used at its sites in Brazil, Europe and Pacific.

In 2022, the company also conducted a gender pay equity analysis, which showed that, within JDE Peet's, the difference in the pay of males and females is less than 1%, which is well under the future EU directive’s threshold of 5%.

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, a free cash flow conversion of approximately 70% and stable to increasing dividends over time.

Outlook 2023

JDE Peet's aims to achieve the following in 2023:

Organic sales growth at the high end of its medium-term range of 3 – 5%
Low single-digit organic adjusted EBIT growth, with a moderate increase in SG&A
A stable dividend

Dividend

JDE Peet's' Board proposes to pay a dividend of EUR 0.70 per share in cash related to FY 22. The dividend will be paid in two instalments of EUR 0.35 each. The first payment date will be on Friday, 14 July 2023, with the ex-dividend date on Monday, 10 July 2023 and the record date on Tuesday, 11 July 2023. The second payment date will be on Friday, 26 January, 2024, with the ex-dividend date on Monday, 22 January 2024 and the record date on Tuesday, 23 January 2024. The dividend proposal is subject to approval by the Annual General Meeting of Shareholders to be held on Thursday, 25 May 2023.

FINANCIAL REVIEW FULL-YEAR 2022

in EUR m (unless otherwise stated)

	FY 2022	FY 2021	Organic change	Reported change
Sales	8,151	7,001	11.3 %	16.4 %
Adjusted EBIT	1,227	1,304	-9.3 %	-5.9 %
Underlying profit for the period	936	899	-	4.1%
Underlying EPS (EUR) 1, 2	1.91	1.79	-	6.3%
Reported basic EPS (EUR)	1.57	1.53	-	2.6%
1 Underlying earnings (per share) exclude all adjusting items (net of tax)
2 Based on 485,235,677 shares (excluding treasury shares) outstanding (FY 21: 501,951,089) on 31 December 2022

Total reported sales increased by 16.4% to EUR 8,151 million. Excluding a positive effect of 4.7% related to foreign exchange and 0.3% related to scope and other changes, total sales increased by 11.3% on an organic basis. Organic sales growth reflects a price effect of 15.8% and a volume/mix effect of -4.4%. In-Home sales increased by 8.9% and sales in Away-from-Home increased by 22.3%.

Total adjusted EBIT decreased by -5.9% to EUR 1,227 million on a reported basis. Excluding the effects of foreign exchange and scope and other changes, the adjusted EBIT decreased organically by -9.3% as SG&A increased by 10.6%, driven by investments in marketing, innovations and other strategic growth capabilities.

Underlying profit - excluding all adjusting items net of tax - increased by 4.1% to EUR 936 million. It includes an underlying tax rate of 23.6% and was supported by lower interest expenses, mainly as a result of a lower average cost of debt, and a reduction of other finance expenses.

Net leverage improved to 2.65x net debt to adjusted EBITDA.

Our liquidity position remains strong, with total liquidity of EUR 2.4 billion consisting of a cash position of EUR 0.9 billion 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 10:30 AM CET today to discuss the full-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

MediaKhaled RabbaniMedia@JDEPeets.com+31 20 558 1753

Investors & AnalystsRobin 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 4,200 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 2022, JDE Peet’s generated total sales of EUR 8.2 billion and employed a global workforce of more than 20,000 employees. Read more about our journey towards a coffee and tea for every cup at www.jdepeets.com.

IMPORTANT INFORMATION

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 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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