Presentation to Analysts - A Global Coffee & Tea Champion June 24, 2020
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
A Global Coffee & Tea Champion
Presentation to Analysts
June 24, 2020
Disclaimer
THIS PRESENTATION AND ITS CONTENTS ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN ANY JURISDICTION IN VIOLATION OF THE RELEVANT SECURITIES LAWS OF SUCH
JURISDICTION. THIS PRESENTATION IS NOT AN OFFER OR AN INVITATION TO BUY OR SELL SECURITIES.
IMPORTANT: Please read the following before continuing. The following applies to this document and the oral presentation of the information in this document by JDE Peet’s N.V. (“JDE Peet’s” or the “Company”) or any person on behalf of the Company and any question
and answer session that follows the oral presentation (collectively, the “Information”). The Information does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase securities of the Company, and no
other party accepts any responsibility whatsoever, or makes any representation or warranty, express or implied, for the contents of the Information, including its accuracy, completeness or verification or for any other statement made or purported to be made in connection
with the Company, and nothing in this document or at the presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. This document and the information contained herein may not be disclosed, taken away,
reproduced, redistributed, copied or passed on, directly or indirectly, to any other person or published or used in whole or in part, for any purpose.
The Information and opinions contained therein are provided as at the date of the presentation and are subject to change without notice. The Information does not constitute or form part of any advertisement or marketing material, any offer or invitation to sell or issue,
any offer or inducement or invitation or commitment to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for, any shares in the Company or securities in any other entity nor shall it or any part of it nor the fact of its distribution form the
basis of, or be relied on in connection with, any contract or investment decision in relation thereto. The information contained herein is only preliminary and indicative, does not purport to be full or complete and does not purport to contain the information that would be
required to evaluate the Company, its financial position and/or any investment decision. This document is not intended to provide, and should not be relied upon for, accounting, legal or tax advice nor does it constitute a recommendation regarding any transaction.
Accordingly, by attending any presentation in which this document is made available or by receiving this document through any other means, you represent that you are able to receive this document without contravention of any legal or regulatory restrictions applicable to
you and will not use this information in relation to any investment decisions (if any). This document is given in conjunction with an oral presentation and should not be taken out of context. This presentation is not, and should not be construed as, a prospectus for the
purposes of Regulation (EU) 2017/1129 or offering circular, does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase securities of the Company, and nothing contained therein shall form the basis
of or be relied on in connection with any contract or commitment whatsoever, in particular, it must not be used in making any investment decision. To the extent available, the industry, market and competitive position data contained in the Information come from official
or third party sources, which may or may not be publicly available. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy
or completeness of such data. While the Company reasonably believes that each of these publications, studies and surveys has been prepared by a reputable party, the Company, nor any of its subsidiary undertakings or affiliates, or their respective directors, officers,
employees, advisers or agents have independently verified the data contained therein. In addition, certain of the industry, market and competitive position data contained in the Information come from the Company’s own internal research and estimates based on the
knowledge and experience of the Company’s management in the markets in which the Company operates. While the Company reasonably believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have
not been verified by any independent source for accuracy or completeness and are subject to change. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in the Information. The Information does not
purport to be comprehensive. To the fullest extent permitted by law, the Company, nor any of its subsidiary undertakings or affiliates, directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for (whether in contract, tort or
otherwise) or makes any representation, warranty or undertaking, express or implied, as to the truth, fullness, fairness, accuracy or completeness of the Information (or whether any information has been omitted from it) or any other information or opinion relating to the
Company, its subsidiaries, affiliates or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the Information or otherwise arising in connection
therewith. In giving this presentation, the Company, nor any of its respective affiliates undertake any obligation to provide the recipient with access to any additional information or to update the Information, or to correct any inaccuracies in the Information, including any
data or forward-looking statements. Any decision to purchase securities of the Company in any offering should be made solely on the basis of information contained in any prospectus or offering circular that may be published by the Company in final form in relation to any
proposed offering and which would supersede the Information in its entirety. Any such prospectus or offering circular will be published on the website of the Company.
The Information has been prepared by the Company for information purposes only. The information, statements and opinions contained in this Information do not constitute a public offer under any applicable legislation or an offer to sell or a solicitation of an offer to buy
any securities and are not for publication or distribution in any jurisdiction where such distribution or offer is unlawful. This presentation is not for publication or distribution, directly or indirectly, in or into the United States. This presentation is not an offer of securities
for sale into the United States. No public offering of securities is being made in the United States. Any securities referred to in this Information and herein have not been, and are not intended to be, registered under the Securities Act, and may not be offered or sold in the
United States absent registration or an exemption from registration under the Securities Act or in a transaction not subject thereto. This document and its contents may not be viewed by persons within the United States (within the meaning of Regulation S under the
Securities Act) other than by QIBs. This document does not constitute an offer of securities to the public in any jurisdiction. These materials may include statements, including the Company’s financial and operational medium-term objectives that are, or may be deemed to
be, ''forward-looking statements''. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms ''believes'', ''estimates'', ''plans'', ''projects'', ''anticipates'', ''expects'', ''intends'', “targets”, ''may'', ''will'' or ''should'' or, in
each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements
reflect the Company’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company’s business, results of operations, financial position, liquidity, prospects, growth or
strategies, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records (and those of its affiliates) and other data available from third parties.
Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and
are beyond its control. Forward-looking statements are not guarantees of future performance and such risks, uncertainties, contingencies and other important factors could cause the actual results of operations, financial condition and liquidity of the Company and its
affiliates or the industry to differ materially from those results expressed or implied in this document or the presentation by such forward-looking statements. No representation is made that any of these forward-looking statements or forecasts will come to pass or that any
forecast result will be achieved. Undue influence should not be placed on any forward-looking statement.
No statement in this presentation is intended to be nor may be construed as a profit forecast. Forward-looking statements speak only as of the date they are made. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law
and therefore persons in such jurisdictions into which they are released, published or distributed, should inform themselves about, and observe, such restrictions. Any figures in this presentation that are unaudited are subject to change. Certain figures contained in this
presentation, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this presentation may not conform exactly to the total figure given. By accepting delivery
of this document you agree to be bound by any of the foregoing limitations. Any research produced by analysts in respect of the Company will be the analysts’ own research prepared independently of the Company.
2
Today’s presenters
Casey Keller Scott Gray
Chief Executive Officer Chief Financial Officer
Years of experience in the industry: 28 Years of experience in the industry: 11
Years of experience at JDE Peet’s: 2
3
The Unique Story of
JDE Peet’s
JDE Peet’s at a glance
Key stats Our iconic brands
1753 1853 1895 1923
#2 ~2.5bn
Coffee & Tea player
globally in CPG cups served per week
~€7bn 5.4% 1937 1960 1966 1978
FY19 Revenue FY16–19 Revenue CAGR
€1.3bn 18%
FY19 Adj. EBIT FY19 Adj. EBIT margin 1987 1992 1995 1996
Available in
100+ countries
worldwide
1999 2001 2004 2014
79% A global team of
of revenue from #1 or #2 positions 20,000+
in CPG and Out-of-Home markets1 Associates
5
Source: Euromonitor International as of January 2020 (#2 Coffee & Tea player globally in CPG, figures as of 2019), Company information (all other figures)
1 Latest market leadership positions available (Nielsen 2019 for CPG and OOH MM, OPEX/VCP, NL: POS 2018 for OOH) applied to FY 2019 revenue
What makes JDE Peet’s special
1
A Global Category with
Attractive Growth Fundamentals
5 2
Experienced Team of Entrepreneurs The World’s Largest
and Long-Term Shareholders Pure-Play Coffee & Tea Player
4 3
Strong Growth Differentiated
and Profitability Consumer Reach Model
6
1 Large global consumer segment demonstrating strong and
resilient growth
Coffee & Tea is a large category… …demonstrating strong and resilient historical growth…
Total volume (mmT)
North Europe1
10,7 10,9 11,1 11,4
America €32.3bn 9,3 9,7 10,0 10,2 10,4
9,0
€17.1bn 8,1 8,3 8,7
3,4 3,5 3,6 3,7 CAGR
APAC 3,2 3,3 3,4 Tea:
3,0 3,1
2,8 3.6%
Rest of the Global €36.3bn 2,4 2,5 2,7
World Coffee & Tea
CAGR
€32.2bn €118bn 5,7 5,8 6,0 6,2 6,3 6,6 6,8 6,9 7,1 7,2 7,4 7,5 7,7 Coffee:
2.6%
Global Coffee Global Tea
€78bn €40bn 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
…outpacing other Food & Beverage categories… …with growth trajectory forecast to continue
RSP sales growth at constant 2019 prices (2007-19 CAGR) Total volume (mmT)
4,1%
12,9
CAGR
2,9% 11.4 Tea:
2,5% 2.9%
4,3
3,7
1,1% CAGR
0,8% Coffee:
7,7 8,6 2.3%
0,4%
0,1%
Bottled Water Coffee & Tea Alcoholic Staple Foods Sports Drinks Carbonated Juice 2019 2024
Beverages Soft Drinks
Source: Euromonitor International as of December 2019
Note: Figures reflect B2C Consumer Packaged Goods (CPG) sales at retail sale prices (RSP) and total volume; exclude Ready-to-drink category and Out-of-Home channel
1 Excluding Russia, which is included in Rest of the World
7
1 Supportive consumer trends driving a total value growth to
~5% through premiumisation
Change towards a global footprint From In-Home to Out-of-Home reference
Coffee Market
Value growth
4.7%
CAGR 2014-19
From generic black to multiple need states From multiserve to single portioned
Emerging trends in Coffee Coffee as a healthy beverage Desire for more quality & authenticity
Expectations with respect to Expectations with respect to
Coffee as Ready-to-drink beverage
sustainability shopping convenience
8
Source: Euromonitor International as of December 2019
Note: Figures represent CPG sales at RSP (current prices); exclude Ready-to-drink category and Out-of-Home channel
2 As the world’s largest pure-player, JDE Peet’s offers a unique
combination of category focus and scale to investors
Players with presence in Coffee & Tea
Coffee & Tea as % CPG Coffee & Tea sales
Company Ownership
of total CPG sales1 (RSP 2019)
€8.3bn To be listed
Pure-
players
€2.0bn Private
/ CPG €19.4bn Listed
€4.4bn Listed
€1.9bn Listed
Others
€1.4bn Listed
€1.3bn Listed
€1.0bn Listed
Own brands only
Source: Euromonitor International as of December 2019
Note: Figures represent CPG sales at RSP in 2019; exclude Ready-to-drink category and Out-of-Home channel
1 Indicative
9
2 CPG Coffee & Tea remain fragmented markets.
JDE Peet’s commands a 7% share as the #2 global player
Coffee & Tea Coffee Tea
51%
64%
75%
Top 10: 49%
Next 8
Top 10: 36% combined 14%
Next 8
combined 12% 10%
7%
Top 10:
25% 25%
16%
Global value share Global value share Global value share
Global CPG
market size €118bn €78bn €40bn
Source: Euromonitor International as of January 2020
Note: Figures represent CPG sales at RSP in 2019; exclude Ready-to-drink category and Out-of-Home channel. Nestlé share includes Starbucks CPG 102 In Coffee, JDE Peet’s portfolio is over-indexed on the fastest
growing parts of the market, which supports shares momentum
Global CPG Coffee market
RSP sales Volume growth Corresponding
breakdown 2019 (2014-19 CAGR) revenue breakdown1
Beans 3,9
7% Beans
13%
%
Roast &
Ground
2
36% Roast &
Ground 1,2% 29%
7,2
Single Serve 21%
Single serve
27%
%
Instant 2,4%
35% 30%
Instant
coffee
3
Total 100% 3.1% 100%
11
Source: Euromonitor International as of December 2019 (CPG coffee market sales breakdown and Coffee and Instant Coffee Mixes
volume growth), Company information (Revenue breakdown) 1 FY 2019 and excluding Equipment, Retail, Tea, Liquid and Other
Note: Beans refers to Fresh Coffee Beans, Roast & Ground refers to Standard Fresh Ground Coffee, 2 While Peet’s sells both Beans and Roast & Ground, all Peet’s coffee is categorized as Beans
Single serve refers to Fresh Ground Coffee Pods, and Instant coffee refers to Instant Standard 3 Volume CAGR weighted for Coffee technologies market sizes 20193 A platform unique to the industry allowing JDE Peet’s to
serve ~2.5bn cups every week
Technology Portfolio of brands Go-to-market
CPG
Out-of-Home
Roast &
Beans Instant Liquid
Ground
Retail
Online
Capsules Pads T-Disk RTD
The only player operating The largest owner of Coffee & Tea
Distribution across all channels
across all technologies brands in the industry
A unique combination allowing:
Range of offers across price points
Ability to premiumise across consumer propositions
Fast deployment across countries and channels
Source: Company information
123 Alongside Nestlé, JDE Peet’s has the ability to address
consumer trends across Coffee & Tea technology platforms
Beans
✓ ✓ ✓ ✓ ✓ ✓ ✓
1
Beans,
Roast &
Roast & Ground
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
1
Ground
Aluminium capsules
✓ ✓
Plastic capsules
✓ ✓ ✓ ✓ ✓ ✓
K-Cups Pods
Single
Serve
By KDP By KDP By KDP By KDP By KDP ✓ By KDP
Pads
✓ ✓
2
T-Disk
✓ ✓ By JDE
Freeze-Dried
✓ ✓ ✓
White Coffee
✓ ✓
Instant
Spray-Dried
✓ ✓ ✓ ✓ ✓ ✓
Agglo
✓ ✓ ✓ ✓ ✓ ✓
RTD
✓ ✓ ✓ ✓ ✓ ✓ ✓
Other
Tea
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
13
Source: Company information
1 In 2018, Nestlé and Starbucks formed a global coffee alliance granting Nestlé the perpetual rights to market Starbucks Consumer Packaged Goods and Foodservice products globally, outside of the
company’s coffee shops. The Starbucks brand portfolio is now represented on Nestlé’s single-serve capsule systems
2 For Nestlé, refers to Dolce Gusto3 The power of our consumer reach model is what makes
JDE Peet’s truly unique
Portfolio
Technology Go-to-market
of brands
Aluminium capsules
Constant innovation 1 Exceptional market
Super
premium share gains in
In less than 2 years, a growing market
Premium present in 35 markets 47%
Mainstream
19 brands 26%
Q3-19
(Global/Regional/Local) Q1-17
Value Value share in
NCC2
Instant
Innovation across Pricing Strong momentum
technologies Premium in market share
120 22%
Mainstream
20194
20%
Value 100 2015
Value share
Market average in instant coffee3
Source: Nielsen (value shares and instant pricing), Company information (all other figures)
14
1 Aluminum capsule global trademark licensing
2 Represent market shares in 34 countries excluding the US
3 Represent market shares in 40 key countries excluding the US
4 Refers to Dec-19 LTM3 JDE Peet’s, a comprehensive approach to ESG
Environmental, Social & Governance
Common Grounds Minimised Footprint Connected People
Addressing the priority issues Reducing our environmental
Exceeding societies’ expectations
in our supply chain impact step-by-step
Selected KPI: Selected KPI: Selected KPI:
100% responsibly sourced green 100% recyclable or compostable Gender balanced management
Coffee & Tea1 by 2025 packaging by 20251 positions by 20251
We are driven by our passion for Coffee & Tea, respect for the environment and care for people
Source: Company information
1 For JDE 154 Solid and profitable historical growth with strong cash generation
Financial highlights Key value creation drivers
€6.9bn +3.1% +8.5%
FY19 Revenue 2017-19 Revenue Adj. EBIT CAGR Revenue progression from solid organic
CAGR 2017-19 volume / mix and bolt-on M&A, while
(+5.4% CAGR
2016-19) passing through the commodity
benefits to customers
€1.3bn 18.1% €1.6bn Operational leverage, driving continued
FY19 Adj. EBIT FY19 Adj. EBIT FY19 Adj. EBITDA margin expansion, from volume increase,
margin
premiumisation and cost discipline
>€1bn Strong and steady cash flow
€1.2bn 75.9% Adj. net debt
reduction FY17-192
generation enabling debt reduction while
funding bolt-on M&A
FY19 free cash flow FY19 free cash flow
conversion %1
~€1.5bn
Cum. M&A spend
FY17-193
16
Source: Company information
1 Free cash flow conversion % defined as free cash flow/ Adj. EBITDA
2 Excluding IFRS 16 impact
3 Excluding Peet’s acquisition4 Strong topline progression driven by solid volume/mix growth
as well as M&A
2017 – 2019 revenue bridge (€m)
Quality growth with solid volume/mix (within a
CAGR ‘17-’19: +3.1% range of +3–5%), supported by:
─ Underlying market momentum
+4.2%
+2.1% 6,945 ─ Consumer relevant propositions across
+ 1 .1% geographies (capsules, premium instant and mixes)
+ 4.0% (3 .3%)
+ 2 .4% ─ Continued increase of Peet’s CPG household
6,664 penetration in the US
6,530 + 3 .6%
(2 .8%) ─ Expansion of premium beans offering and market
(3 .6%) + 5.0% share
Successful integration of bolt-on M&A activity, notably:
─ APAC – OldTown (2018) and Super Group (2017)
─ Tea – Ofçay (2018)
─ OOH – Maison Lyovel (2017) and JOBmeal (2018)
Disciplined pricing management following green
coffee price deflation over 2017-2019
2017 Price Volume M&A FX 2018 Price Volume M&A FX 2019
/mix /mix
YoY growth
Source: Company information
174 Successful Adjusted EBIT margin expansion over 2017-2019 as
JDE Peet’s grows and premiumises
2017 – 2019 Adj. EBIT bridge (€m)
Absolute Adjusted EBIT growing ahead of revenue
Margin:
+c.50bps growth (2017-19 CAGR of +8.5%)
Margin: 18.1%
+c.130bps
Margin: 17.6%
16.3% 1 Largely driven by strong volume/mix, M&A and
improved gross margin as a result of:
CAGR ‘17-’19: +8.5%
─ Volume growth and premiumisation
+7.2% ─ Manufacturing footprint optimisation and scale
+9.9%
efficiencies
0 1,255
(3 6)
(2 8) ─ Culture of disciplined cost competitiveness and M&A
(7 9) 1,17 1 1 12
221 integration
1,065
1 2 3 1 2 3 2 Increased marketing investment behind targeted
growth priorities and innovation launches, while
driving efficiencies through digital that offset continued
reach investment in 2019
3 Increase in 2018 and 2019 are mainly driven by
investment in acquisitions and ventures, as well
as capabilities (e.g. digital and e-commerce, R&D in
2017 Adj. Adj. 2 Adj. 3 2018 Adj. Adj. 2 Adj. 3 2019 Asia) and some wage inflation
gross 1 A&P SG&A gross 1 A&P SG&A
profit (excl. A&P) profit (excl. A&P)
YoY growth
18
Source: Company information EBIT reconciliation insofar they relate to A&P
1 Adjusted gross profit is defined as gross profit (Revenue – Cost of Sales) adjusted for the same factors as 3 Adjusted SG&A (excl. A&P) is defined as SG&A (excl. A&P) adjusted for the same factors as listed under the
listed under the Operating profit to Adj. EBIT reconciliation insofar they relate to gross profit Operating profit to Adj. EBIT reconciliation insofar they relate to SG&A (excl. A&P)
2 Adjusted A&P is defined as A&P adjusted for the same factors as listed under the Operating profit to Adj.4 Strong and steady cash flow generation, combined with
EBITDA growth, driving rapid and consistent deleveraging
Free cash flow Net debt and leverage
Free cash flow conversion %1 Leverage (Adj. net debt3 / Adj. EBITDA)
53.0% 74.0% 75.9%2 4.4x
3.7x ~3.6x
Free cash flow3 Adj. net debt3 (€m)
(€m) 3.1x4
Including net debt
2 related to Peet’s
1,17 8 acquisition offset by
primary proceeds
5,657
1,031
5,187
4,793
IFRS 16
(+€248m) IFRS 16
4,545
685
2017 2018 2019 2017 2018 2019 Estimated at IPO
19
Source: Company information 3 Defined as Total borrowings – Cash and Cash Equivalents (less Restricted Cash) – Borrowings from
2 Pre-IFRS 16 free cash flow of €1,094m and pre-IFRS 16 free cash flow conversion of 74.1% members of the JAB Group
1 Free cash flow conversion % defined as free cash flow/ Adj. EBITDA 4 Leverage pre- and post-IFRS 16 is 3.1x in both cases4 Medium- to long-term targets
Financial targets
Medium- to long-term Key value creation drivers
Revenue organic growth 3–5%
(at constant commodity prices)
▪ Quality growth, consistent with historical trends,
driven by organic volume/mix
Adj. EBIT growth 5–8% ▪ Disciplined execution of the growth priorities and
pricing management
▪ Margin expansion from operational leverage, driven
Free cash flow conversion
~70% by volume expansion and premiumisation
(FCF / Adj. EBITDA)
▪ Consistent financial discipline, with high free cash
flow conversion, dividend payout, and
Dividend payout ratio 50-60%
deleverage
▪ Intention to be investment grade rated within 1 to 2
Leverage years
(Net debt / Adj. EBITDA) < 3.0x
By the end of H1 2021
Source: Company information
204 To pursue its profitable and sustainable growth, JDE Peet’s’
focus is on the disciplined execution of its growth priorities
Full scale potential
Household Emerging market Capture the
of single serve and Embrace new
penetration of growth and attractive OOH
premium beans growth pool
Peet’s in the US exposure opportunities
globally
China Retail
Peet’s Brand US
Household Penetration
Tea
5,5%
4,8%
4,3%
2017 2018 2019 Ready-to-drink
Aluminum capsule global
trademark licensing
Source: Nielsen as of December 2019
214 Recent developments in the COVID-19 context
While the COVID-19 pandemic has led to unprecedented developments, including for the Group’s associates, customers
and suppliers, it has also reaffirmed the Group’s relative resilience at a time of global economic turmoil
The COVID-19 pandemic has affected the supply chain and operations in a variety of ways, including:
– All manufacturing facilities have continued running with preventive measures put in place
– Retail coffee stores have either been temporarily closed or have implemented limited operations
– Customer service levels have been somewhat adversely affected, but have remained strong
– IT networks have held up against a surge in demand from working remotely
– Within the Out-of-Home segment and retail coffee stores sales channel a large number of employees have
been furloughed
JDE Peet’s donated 18 million cups of coffee to support health service employees and communities in need
Thanks to its global manufacturing and supply network, its large portfolio of trusted brands and its diversified go-to-
market approach, the Group has been able to weather past crises and believes it is well-positioned to withstand
current developments
Source: Company information
224 Key highlights Q1 trading update
Solid Q1 performance in line with medium- to long-term targets
– Like-for-like total sales growth of +3.5% YoY
– Double-digit adj. EBIT growth YoY, from increased volume/mix and reduced SG&A
– Resilient liquidity, strong free cash flow and improved leverage ratio (reduction of 0.2x since Dec-19)
While timing of macro-economic recovery is uncertain, on track to deliver on medium- to long-term targets
Segments Sales channels Portfolio
Peet’s CPG Europe Out-of-Home
CPG LARMEA CPG APAC
Reported revenue Volume/
growth mix
‒ Peet’s +4.6% ‒ All technologies
‒ CPG Europe +3.7% ‒ (~80%) CPG, Online
‒ Developed &
‒ CPG LARMEA +15.5% emerging markets
‒ (~20%) Retail, OOH
‒ CPG APAC +6.5% ‒ Power & local brands
‒ Out-of-Home (4.8)%
Note: Figures are unaudited
234 Learnings from the recent crisis
Some early market and consumer signs
Coffee “essential” in developed markets and coffee growing countries > emerging markets
Increased at home consumption exceeds initial pantry loading
Consumers gravitating towards trusted brands
Importance of full portfolio offering (technologies, brands, price points)
Increased at home premiumisation
Acceleration of e-commerce
Source: Company information
245 Senior management team with extensive experience
Senior leadership team
Highly engaged team of
associates throughout the 28
Casey Keller
organisation Chief Executive Officer
2
11
Scott Gray
Exceptionally motivated Chief Financial Officer
partners in full alignment of
interest with shareholders
Experienced management
team with proven ability to
30 22 21 25 25
drive revenue Shawn Conway Oswald Barckhahn Lara Brans Jiri Kulik Philippe Schaillee
President of Peet’s President Europe President APAC President LARMEA President Out-of-Home
10 3 21 6 25
Deep and broad bench of
KPI driven marketing
executives
26 32 24
Motivation-driven Anne-Marie Poliquin Chris Brighton Nathalie Slechte
General Counsel VP RD&O VP Global HR
1 29 5
recruitment process
Years of experience at JDE Peet’s1 Years of experience in the industry
25
Source: Company information
Note: Flags reflect nationalities
1 Including predecessor companies5 Management powerfully incentivised with interests aligned to
public shareholders
Cash bonus based on achieving key operational targets. Significant equity incentive with five-year vesting
period to ensure full alignment with public market investors
Building blocks Cash bonus
Incentive Scope Vesting Amount Target(s) Measures
Financial
Short-term
Senior 0%-~230% Total company
Cash bonus One-year Key performance indicators to
management1 of base salary2 targets
measure the successful execution of
the Company’s strategy which can
relate to, inter alia:
Revenue
Profit
Equity Operating working capital
incentive Senior Five-year Annual grant of
Share price
management1 cliff vesting ~200% of base salary2
LTI
Mid-long term
Non-financial
Executive Reflect performance on the
Ownership Senior management1 Bonus shares with Own capital invested key strategic objectives
Plan Share price
investing own capital five-years cliff vesting of >€50m3 of the Company
EOP
Please refer to pg. 25 for senior management team members
26
1
2 Based on weighted average of senior management team
3 Including anticipated 2020 investmentsAppendix
JDE Peet’s segments overview
FY 2019 Peet’s Out-of-Home1 CPG–Europe CPG–LARMEA2 CPG–APAC
Revenue 13% 47% 16%
14% 10%
breakdown3
% of Group revenue % of Group revenue % of Group revenue % of Group revenue % of Group revenue
CPG √ ─ √ √ √
Out-of-
Home √ √ ─ ─ ─
Distribution
channels
Retail 438 coffee stores 45 coffee stores ─ ─ 231 coffee stores
Online √ √ √ √ √
Source: Company information Latin America, Russia, Middle East and Africa
28
2
1 Division offering professional solutions, excluding United States Out-of-Home, which is 3 Excluding unallocated revenue of €26m
included in the Peet’s segmentComprehensive go-to-market with distribution across
all channels
CPG1 Out-of-Home1 Retail coffee stores Online
Modern and traditional retail trade All coffee consumed Out-of-Home, 410 Peet’s stores (including China)2 E-commerce
outlets e.g. in offices, hospitals and care 231 OldTown stores Peet’s #5 coffee brand on
homes, colleges & universities and 27 Coffee Company stores Amazon US at 1.5x category
Grocery and convenience stores hotels growth
globally 18 12oz stores
Out-of-Home revenue grew at 4.5% Direct-to-consumer
15 Intelligentsia stores
CAGR 2017-19 Online revenue grew at ~25% CAGR
13 Stumptown stores 2017-19
76% 16% 5% 3%
of revenue of revenue of revenue of revenue
29
Source: Company information (growth rates, number of stores, revenue breakdown), Profitero, One Click Retail (Peet’s e-commerce figures)
Note: Revenue breakdown as of FY 2019. Retail coffee stores figures as of 31 December 2019
1 Refers to channels. The distribution channels Online and Retail are shown separately; hence, the channels CPG and Out-of-Home do not correspond to the reporting segments as disclosed in the financial statements
2 Include owned and licensed stores in the US and China as well as Capital One storesA streamlined global footprint with both scale and flexibility
Global manufacturing footprint… …with an agile setup to address consumer demand in a cost effective way
Scale Flex Local
45
manufacturing facilities 13 4 28
facilities facilities facilities
Located in ▪ High-volume ▪ Flexible production ▪ Proximity to
25 countries ▪ Focused on up to 2 ▪ Multiple technologies consumers
technologies and products ▪ Rapid response to local
▪ High asset utilisation ▪ New product launches consumer preferences
7,400+
FTEs
650+kt
produced volume1
Excellent quality, safety & serviceOur worldwide footprint of brands is designed to serve all
consumer needs
Our #1/#2 market positions represent 79% of our revenue1
Global
50%
Jewels Global trademark licensing
agreement for aluminium capsules
Regional
31%
Heroes
Local
19%
Brands
50+ brands addressing all consumer needs and price partitions,
serving ~130bn cups per year at an average price point of €0.06/cup
31
Source: Company information
Note: Percentages represent revenue breakdown as of FY 2019. Carte Noire: the Group holds the IP rights outside of the European Economic Area; Gevalia: the Group holds the IP rights outside of North America,
Latin America and the Caribbean; Maxim: the Group holds the IP rights outside of South Korea and Japan; Maxwell House: the Group holds the IP rights outside of North America, Latin America and the Caribbean
1 Latest market leadership positions available (Nielsen 2019 for CPG and OOH MM, OPEX/VCP, NL: POS 2018 for OOH) applied to FY 2019 revenueOur brands cover key price partitions in the market to
maximize penetration
Our brand and product portfolio is uniquely designed to optimize overall consumer penetration and capture the
maximum of purchasing occasions
United Kingdom Germany Brazil China United States
Ultra
Premium
Super Launch
in 2020
Premium
Global trademark licensing Global trademark licensing
agreement for aluminium capsules agreement for aluminium capsules
Premium
Mainstream
Value
Source: Company information
32The power of the global brands of JDE Peet’s outperforms
competition organically
#36 countries #38 countries #15 countries #22 countries
Out of the handful The fastest growing The most accessible The first single serve
One of the fastest
billionaire global coffee single serve brand consumer proposition milk-based beverage
growing premium CPG
brands, Jacobs is the globally over the last in single serve of scale (launched in 2004)
coffee brands in the US
fastest growing in the 5 years (from price/cup
The largest hand instant segment over stand-point)
roasted coffee globally the last 3 years1 Remarkable global
brand awareness Proposition of 100%
Self imposed superior >90% brand awareness
build-up in 3 years compostable single
freshness in its core markets
serve pads
Global trademark licensing agreement for aluminium capsules
The most premium aluminium capsule in grocery stores
“Illy offers the best coffee that nature can offer, exalted by the experience of over 80 years of passion”
Illy company website
Source: Company information, Nielsen
Note: Number of countries refers to Nielsen CPG in JDE Peet’s markets
1 Jacobs relaunched in 2016
33Ability to deliver consistent value creation with disciplined
management of coffee price volatility
Green coffee commodity is subject to price volatility
Price changes are passed through to customers up and down
Yet, coffee consumption at home is inelastic
Leading coffee brands, that support price, do protect margin and do
not lose market share medium-term
Hedging (no speculative positions / instruments), aligned with time
ability to pass-on pricing up and down
Track record of resilient absolute € margin/cup and cash flow,
through disciplined pricing
Blended Arabica & Robusta Coffee futures1 vs JDE Peet’s revenue/kg2 (€/kg)
3.0 6.4
2.7 6.2
6.0
2.4
5.8
2.1
5.6
1.8
5.4
1.5 5.2
1.2 5.0
Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Dec-19
2
Blended (Arabica & Robusta) price (LHS) JDE Peet's revenue/kg (RHS)
Source: Company information, ICE (IntercontinentalExchange)
1 Average of NY ICE 2nd positions Arabica and Robusta Coffee futures, based on monthly average of daily closing prices converted into euro at the 6-month forward EUR/USD rate, presented with a 6-month
lag to JDE Peet’s revenue
34
2 Based on JDE Peet’s revenue for CPG–Europe Roast & GroundA coffee or tea for every cup
35You can also read
