Friday 29 March 2024
  • La Cimbali
  • Triesteexpresso

Lavazza Group Reports 9.6% rise in turnover

Profit rose sharply to a record 802 million euro, following the sale of Keurig Green Mountain. Volumes were up 4.4%; 53% of revenue generated outside Italy

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TURIN, Italy – The annual general meeting of shareholders approved the 2015 corporate and consolidated financial statements of Luigi Lavazza S.p.A. The Group reported a rise in volumes of 4.4%, turnover of 1,473 million euros (up 9.6% on 1,344 million in 2014), EBITDA of 147 million euros (226 million in 2014) and EBIT of 72 million euros (156 in 2014).

The fall in EBIT and EBITDA is due to multiple factors, including rising coffee prices and a significant increase in marketing and communication investments to drive development on international markets.

Consolidated operating profit stands at 802 million euros, compared with 127 million in 2014, mainly due to the effect of the capital gain recorded on the sale of the Group’s stake in Keurig Green Mountain. Financially, the year ended with a cash balance of 1,351 million euros, against 340 the previous year, mainly due to the aforementioned sale of KGM.

The share of turnover generated by international markets continues to rise, with an increase of 53% reported in 2015.

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The factors influencing good performance abroad include the introduction of different strategies based on the real situation in local markets and a substantial investment in marketing and communication, consistently with Lavazza’s strategic plan.

Sales in international markets were driven particularly by four countries, all reporting double-digit growth: United States (+35%), United Kingdom (+19%), Germany (+19%) and France (18%). Good performance was also reported by products sold under the Merrild brand, the market leader in Denmark and the Baltic countries.

The company was acquired in 2015 and its revenues were consolidated for the first time in the final quarter of last year. It should also be noted that the Group has a new structure in Australia: in September 2015, the company took over distribution operations and set up a new subsidiary to further strengthen penetration in a country where Lavazza has a significant market share, but there is still potential to exploit.

There was a slight improvement in Italy, where Lavazza confirms its leadership position with a market share by value of 43.7% (Nielsen data) in 2015.

“2015 was one of our most important years ever,” said Lavazza managing director Antonio Baravalle (in the picture), “While celebrating 120 years in business, the company asserted its position as one of Italy’s most credible brands on foreign markets, driven by a vision that underscores our commitment to tradition and innovation.

The creation of the new Australian subsidiary company; strong business growth in the United States, where we launched new products and marketing initiatives; the acquisition of Merrild and the commencement of the Carte Noire operation, which was closed in March this year, have sealed Lavazza’s place as one of the big global players. All confirmed by the fact that today we rank sixth in the world in the coffee industry.”

Last year will also be remembered as a special year for Lavazza because of the international visibility generated by the Group’s contribution to Expo 2015, as the Official Coffee of the Italian Pavilion, testifying to the excellence of a product that symbolises the quality represented by the “Made in Italy” brand.

There was also ongoing promotion at systemic level during the year of Lavazza’s points of excellence: innovation, research and sustainable growth, with the presentation of the sustainability report, the launch of compostable capsules and the first espresso coffee drunk in space; culture, through partnerships with the Guggenheim Museum in New York and the Venetian Civic Museums; and sport, where today Lavazza has partnership agreements in place with the four tennis Grand Slam tournaments.

Work also continued according to plan on the construction of the group’s new headquarters in Turin, which will be ready for use on a block-by-block basis starting early in 2017.

Commenting on the start to 2016, Baravalle stated, “the closing of the Carte Noire acquisition is a cornerstone in our growth strategy, together with a radical renewal of our industrial sites, major investments in marketing, communication and innovation, and the construction of the new management centre in Turin, amounting to a total investment of over one billion euros.

The effects of this strategy will already be visible at the end of the current year, which we expect to report turnover of 1.6 billion euros, 65% of which generated by international markets”.

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