De’Longhi posts ‘unsatisfactory’ second quarter as headwinds hit

De’Longhi Group has reported revenues growth of 0.9% for the first six months of 2022 to reach €1.44bn ($1.47bn). However, a downturn in the second quarter saw income fall 5.8% to €709m ($724m).
 

De’Longhi benefited from a boom in at-home coffee consumption during the pandemic, which continued into 2022 with the company's revenues increasing 8.4% in its first quarter.  

However, despite its professional coffee machine division, led by the recently acquired super automatic manufacturer Eversys, continuing to demonstrate strong growth, the Italian appliance manufacturer said that demand for household coffee machines had slowed. 

Inflationary pressures and the conflict in Ukraine led to De’Longhi ruing an ‘unsatisfactory performance’ in the three months ending 30 June 2022. Expecting a further deterioration in consumer demand and market stability in the remaining six months of the year, De’Longhi has reduced its full-year sales forecast. 

In Europe, De’Longhi’s largest market, second quarter sales reached €392m ($400m), a near 17% decline compared to the same period in 2021. The company said that a fall in trading across core countries such as France and Germany, as well as the expected poor performance in North East Europe following the Russian invasion of Ukraine, were particularly noticeable. 

De’Longhi also reported a fall in sales in the Middle East, India and Africa (-10%) but saw trading rise in the Americas and Asia Pacific regions, at 10% and 28% respectively. The expansion of coffee in the US and Canada meant that the region was the group’s leading market for the first six months of 2022, accounting for 19% of total revenues in the period. 

"The positive signs highlighted in the first months of the year have been progressively diluted in coincidence with the evolution of the Russian-Ukrainian conflict and the consequent impacts on consumer sentiment, already put in crisis by the recent inflationary pressures in consumer goods of primary necessity.

Despite the unsatisfactory performance of the last quarter, we believe that the strategy underlying the actions implemented by the Group in recent months is still correct in a medium-long term perspective," said Massimo Garavaglia, CEO, De’Longhi Group.  
 

De’Longhi achieved 52% revenue growth between May 2020-2022, with 2021 annual revenues of €3.2bn ($3.6bn) accompanying double-digit sales growth across all De’Longhi’s global markets. The dampened second quarter results reflect extremely challenging trading conditions across Europe following rising costs, soaring energy prices and economic disruption from the war in Ukraine.

 
A letter accompanying De’Longhi’s six-month financial report confirmed that Vice Chairman Fabio de’Longhi will assume the role of CEO on 1 September. In June 2022, the Italian company announced it had accepted the resignation of company CEO Massimo Garavaglia, who has announced he will leave the position for personal reasons at the end of August.