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Massimo Zanetti Beverage reports 1Q revenues up 3% to 218 million euros

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VILLORBA, Italy – The Board of Directors of Massimo Zanetti Beverage Group S.p.A., one of the leading brands worldwide in the production, processing and marketing of roasted coffee, listed on the Milan Stock Exchange (MZB.MI), approved on Thursday the Interim Financial Report as at March 31st 2019.

The Group said it confirmed its forecast for profitability growth in 2019, despite a slight fall in core earnings in the first quarter. Core earnings adjusted to exclude the impact of new accounting standard IFRS 16 fell 3 percent to 14.8 million euros ($17 million).

Revenues reached 218 million euros, up 3 percent at current exchange rates but stable at constant rates between January and March.

However, net debt rose to 250 million euros at end-March after the effect of IFRS 16.

Massimo Zanetti, the Group’s chairman and chief executive officer, said:

“The first quarter of 2019 closed with an increase in turnover of 3% at current exchange rates, thanks to growth in volumes in almost all geographical areas and a steady improvement in the product mix that enabled us to achieve growth in gross profit of 4%. In addition, during the quarter we completed the acquisition of the Australian company “The Bean Alliance”, which will open up new growth opportunities in APAC, and the Portuguese company “Cafés Nandi”, which will enable us to double the production capacity of the existing plant during 2019 to meet the growing European demand. We also launched new projects in other markets, in response to new trends and with an ever-increasing focus on sustainability: from the bio-compostable capsules, product of the year in France, to the renewed range of products Segafredo that will soon be available in the Italian market.

Based on the current results and the outlook, together with the strategies implemented, we confirm our forecasts of profitability growth for the current year.”



In the first three months of 2019, the roasted coffee sales volumes of Massimo Zanetti Beverage Group S.p.A. increased 1.9% compared with the first quarter of 2018 (31.1 thousand tons compared with 30.6 thousand tons of the first quarter 2018).
This increase mainly relates Northern Europe (0.9 thousand tons) mainly in the Mass Market channel, the Americas (0.2 thousand tons) in the Private Label channel and the Asia-Pacific (0.2 thousand tons) and has been partially offset by the negative performance of Southern Europe (0.7 thousand tons) mainly in Private Label and Mass Market channel.

Consolidated Revenues

The Group’s consolidated revenues amounted to Euro 217.7 million in the first quarter of 2019 showing an increase of Euro 6.5 million (+3.1%) compared to the first quarter of 2018. This increase is a result of:

  • the foreign exchange rates (mainly Euro against the US dollars) had a positive impact of +3.5%
  • the increase in roasted coffee sales volumes (+1.6%);
  • and the decrease of roasted coffee sales price (-2.0%) as a consequence of the decrease of the cost of raw material (green coffee).

Revenues by Channel

The revenue from the Food Service channel, which represents 23.1% of the Group’s revenue, was in line with the first quarter of 2018, thanks to the strong performance in the Americas and in APAC, offset by the slight decrease in Europe, largely due to the strategy of selecting high traffic and high visibility customers. Performance of the Mass Market and Private Label channels equal to 36.8% and 33.0% respectively of the Group’s revenues is explained by the increase in volumes, offset by the slight decrease of roasted coffee sales price as a consequence of the reduction of the cost of green coffee, as explained before.

Revenues by Region

Revenue in the Americas, at Euro 96.3 million (44.2% of the Group’s revenue), was down by 1.9% at constant exchange rates, attributable to the Mass Market channel, mainly due to the decline in the market in the cans category, partially offset by the Private Label channel, which was stable at constant exchange rates, and by the strong growth achieved in the Food Service channel. Revenue generated in Northern Europe, up 6.3% at constant exchange rates compared to the first quarter of 2018, was linked to the significant growth achieved in the Mass Market channel, thanks to the acquisition of new customers and the positive performance of new products, also in the organic and fair trade segments.

Revenue in Southern Europe decreased by 7.0%, due to the sales prices adjustment in the Private Label channel and the timing of the introduction of new products Segafredo in the Italian Mass Market channel.

Asia-Pacific and Cafés, which also includes the revenue generated by the international network of cafés, posted revenue of Euro 22.7 million, with growth of 11.7% at constant exchange rates, also reflecting the recent acquisition of The Bean Alliance.

Gross Profit

Gross profit amounts to Euro 97.0 million, a Euro 3.8 million increase compared with the first quarter of 2018 (+4.1%). This increase is explained by the favorable impact of exchange rates (+2.4%) and by the increase in Gross profit resulting from the sales of roasted coffee and other products (+1,7% compared to the first months of 2018).

The increase in Gross Profit from the sale of roasted coffee is in turn mainly due to the positive impact of the trends in sales and purchase prices respectively of roasted and green coffee, to the positive effect of the different mix in the sales channels and to the growth in roasted coffee volumes. In percent of revenues the Gross Profit increased 50 basis points (from 44.1% of revenues to 44.6%).


EBITDA amounts to Euro 17.2 million compared to Euro 15.2 million in the first quarter of 2018. This result was attributable to:

  • the increase in Gross Profit, as mentioned above
  • the increase in operating costs (of Euro 2.3 million) partly due to the acquisitions completed in the quarter. On a comparable basis, the increase was mainly driven by i) the personnel costs to strengthen the sales departments and ii) the increase in costs for services, including advertising costs to support the launch of new products
  • the positive impact of exchange rate fluctuations (Euro 0.2 milllion)
  • and the positive impact of the adoption of the new accounting standard IFRS 16, in force since January 1st, 2019 (amounting to Euro 2.4 million) as a result of lower costs for leased assets.

Operating Income (EBIT)

Operating income (EBIT) is equal to Euro 6.1 million compared to Euro 6.4 million of the first quarter of 2018. In addition to that disclosed about EBITDA, the decrease is mainly attributable to the increase in amortization and depreciation impacted by the adoption of IFRS 16 (for Euro 2.1 million).

Net Profit

The net profit amounts to Euro 2.4 million, compared to Euro 2.8 million of the first quarter of 2018. In addition to what disclosed above, the decrease is mainly due to the increase in net financial charges linked to the IFRS 16 adoption (for Euro 0.3 million).

Net Debt

Net debt, excluding the effect of the IFRS 16 adoption, amounts to Euro 204.2 million compared to 174.7 million at December 31, 2018. During the first quarter, non-recurring investments were made for a total of Euro 22.3 million, compared to Euro 0.3 million in the first quarter of 2018. These investments included the acquisition of the business and assets of a group of companies based in Melbourne known as “The Bean Alliance” and the acquisition of the Portuguese company Cafés Nandi SA based in Amadora, near Lisbon.
Lastly, the adoption of the new accounting standard IFRS 16 increased the Net Debt by Euro 45.1 million. As a result, the Net Debt as at March 31st, 2019, after the adoption of IFRS 16, amounted to Euro 249.4 million.

Forecast for operations and significant subsequent events

In view of the results achieved in the first quarter of 2019 and considering current trends, the expectations relating to the performance of the Group for 2019, assuming the absence of extraordinary transactions, excluding those already announced in the first quarter of 2019, are as follows:

  • slight increase in revenues driven by:
    • the improvement in product and channel mix
    • growth in volumes in line with market trends
  • increase in EBITDA adjusted of approximately 3%- 5%
  • net debt is expected to be around Euro 195 million These forecasts are assumed at constant exchange rates and exclude the impact of the application of IFRS 16.

Conference Call to present first quarter 2019 Financial Results

The Group’s First Quarter 2019 results were presented during a conference held on May 9, 2019 at 5:45 CET.

Digital Playback service will be available for 8 days, dialling the following numbers: +1 718 705 8797 (US and Canada), +39 02 72495 (Italy), +44 1 212 818 005 (UK) with the following passcode: 936#

The presentation will be available before the conference call on the company website www.mzb-group.com and on the storage system (www.emarketstorage.com). The recording file will be available on the company website.


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