Earnings Release • May 27, 2024
Earnings Release
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The De' Longhi Group, on the occasion of a meeting with the financial community to be held on the morning of 28 May, will provide some indications on the main financial objectives for the three-year period 2024-2026, sharing, in continuity with what has been done over the years, strategic direction priorities.
Indications of the main financial goals1 for the three-year period:
Fabio de' Longhi, vice-president and managing director, comments on the event as follows:
The Group expects an increase in turnover for the three-year period 2024-2026 with a CAGR at constant exchange rates between 7% and 9%, including the consolidation of La Marzocco from 1 March 2024, as per the announcement relating to the closing of the business combination between La Marzocco and Eversys. This expectation of an increase in turnover is supported by constant perimeter expansion, in continuity with the growth trend achieved by the Group in the medium term, in the mid single digit range.
The further development and strengthening of the business will be guided by the continuation of the growth of the coffee sector, both in the world of products for domestic and professional use, as well as by the opportunities coming from the area of nutrition and food preparation. These growth dynamics will, as already highlighted over the years, be supported by product innovation and the strengthening in absolute value of investments in communication on core brands, which will still see Ambassador Brad Pitt as a protagonist in the home coffee area.
As regards geographical evolution, the European area will be supported as in the past by the strength of the main brands in the world of coffee and nutrition, together with the opportunities for expansion in other categories such as ironing. Specifically, it is expected that the main growth drivers in the area will be the continuation of the trend of sophistication of coffee machines, together with the international development of the Nutribullet brand.
In the Americas and Asia Pacific regions, coffee is expected to see an increase in in product penetration in markets where the Group currently has a presence that is not fully expressed compared to its potential, in line with medium-term evidence, while the nutrition and food preparation sector will take advantage of the new launches to consolidate its positioning in the recent market evolution.
Coffee, in continuity with the results achieved in the medium term, remains one of the main drivers of the company's expansion.
The Group expects a continuation of the favourable growth dynamics of the domestic coffee machine segment, thanks to the increased diffusion of espresso coffee, the greater use of machines for a growing variety of coffee-based drinks, and from greater product sophistication guided by a refined knowledge of the organoleptic characteristics. This evolution, as seen in recent years, leads many consumers to favor products that allow a "beans to cup experience" with a benefit in terms of penetration for superautomatic and semi-automatic machine models.
As regards professional coffee, the business combination between La Marzocco and Eversys will allow the teams to work on the creation of potential synergies from a commercial and industrial point of view, and operate together on the innovation front to continue to serve a market as a primary operator continually expanding.
In the food preparation area, the global nutrition movement plays an important role in the Group's future growth, thanks to a global trend that favours "easy to use" products that promote a healthier and more sustainable lifestyle.
The plan also envisages a positive contribution from the air conditioning, home care and ironing areas, thanks to product innovation in categories where our brands maintain an interesting market positioning.
The projections regarding profitability foresee an adjusted Ebitda as a percentage of revenues for the new perimeter improving between 130 and 230 basis points in 2026, compared to the value reported at the end of last year (equal to 14.4% of turnover). This improvement is in line with the progression anticipated in the current guidance relating to 2024 and will see a potential further consolidation in the coming years based on the current market growth estimate.
Despite a macroeconomic context that is still volatile and with elements of uncertainty, the Group believes that the growth in volumes, the positive contribution of the price-mix, together with production efficiencies, will allow the achievement of the expected profitability objectives, while allowing it to further strengthen investments in media and communication on the Group's main brands.
In continuity with what was announced in the previous strategic plan, and in light of recent extraordinary transactions, before dividends and any acquisitions, of between €280 million and €320 million on average per year, with a level of industrial investments (Capex) around €150 million per year.
In terms of strategic use of the cash generated, the Group reiterates a strong focus on possible external growth opportunities, reconfirming its M&A strategy focused on geographical and product expansion with the aim of strengthening growth trends and the positioning of leadership on international markets. With regard to shareholder remuneration, the current dividend policy remains in place, which provides for a pay-out ratio of 40% of net profit, which can be modified in the event of significant changes in financial leverage.
Investor Relations: Samuele Chiodetto T: +39 0422 4131 e-mail: [email protected]
Media relations: T: +39 0422 4131 e-mail: [email protected]
www.delonghigroup.com
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