De’Longhi hails resilient coffee business after challenging half-year trading

“The group can count on the intact development potential of the coffee and Nutribullet-branded nutrition segments,” said De'Longhi CEO Fabio de’Longhi | Photo credit: Dylan Calluy

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De’Longhi has hailed the performance of its coffee division and an improved outlook in Europe as it charts a difficult course towards ‘progressive normalisation’ in the post-pandemic market.
 
Reflecting ongoing economic headwinds globally, the Italian appliance manufacturer posted a 10.6% fall in half-year revenues to €1.29bn ($1.42bn). However, net profit increased 15% to €82.7m with an increased margin of 6.4%, as a result of price increases and cost management.
 
De’Longhi said its domestic and professional coffee divisions continued to expand and now generate more than 60% of group revenues. The Treviso-based group also noted the ‘extraordinary’ performance of its Eversys super-automatic coffee machine business, which achieved 58% revenue growth during the period and increased its contribution to group revenues from 3% to 5.2%.
 
Despite revenues continuing to fall, De’Longhi said ‘temporary factors’, such as a reduction in stock levels held by retailers a €56m exit from its US mobile air conditioning business, meant the business was on a positive trajectory.
 
There were also signs that its key European market was ‘returning to positive territory’ despite the ongoing Russia-Ukraine conflict and weakened consumer confidence. Half-year revenues fell 7.3% to €784.2m, with double-digit growth recorded for northeast Europe.
 
De’Longhi’s America’s business saw revenues rise 5.5% due to the expansion of coffee and nutrition brands, while a 7.4% decline in Asia Pacific was attributed to a slowdown in Australia and New Zealand.
 
“We are returning to normal business dynamics, despite a macroeconomic scenario characterised in the short-term by the potential impacts of inflation and the increase in interest rates on households’ wealth and consumption,” said De’Longhi CEO Fabio de’Longhi.
 
“Nonetheless, the group can count on the intact development potential of the coffee and Nutribullet-branded nutrition segments, which accounted for almost 65% of total turnover in the half-year and which are destined to represent the main engine in the medium term for the growth and profitability of the group,” he added.
 
De’Longhi is forecasting a ‘slight decrease’ in the €3.2bn ($3.5bn) total sales generated in 2022.