TURIN, May 12, 2015 – The general shareholders’ meeting of Lavazza approved the 2014 financial statements of Luigi Lavazza S.p.A. and the Group’s consolidated accounts, which reported a 4% increase in volumes, turnover of EUR 1,344 million, basically stable compared with EUR 1,340.1 million in 2013, EBITDA of EUR 225.8 million (EUR 223.5 million the previous year) and EBIT of EUR 156.4 million (EUR 123.2 million the previous year, or a rise of 27%).Operating profit at consolidated level stands at EUR 126.7 million, up 16% on EUR 109.3 million in 2013[1].
Financially speaking, the year closed with a cash balance of EUR 340.5 million.
There was a significant improvement in the share of turnover generated by international markets, which is now close to 50%, compared to 46% in 2013, and therefore in line with the strategic objective established two years ago and gradually approaching the mid term target of 70%. The positive results reported outside Italy, equivalent when taken as a whole to an 8% rise in volumes, derive from business plans developed specifically for each individual country, with a view to increasing their respective market share. Excellent value performance was reported in three countries, all of which recorded double digit growth: United States (+27.6%), United Kingdom (+16,9%) and Germany (+12.7%). In addition to these markets, the other countries which are of particular importance for the company at this stage are France, Central and Northern Europe andAustralia.
Turning to 2014 results in Italy, despite the fall in consumption reported by the market as a whole, volumes have significantly remained at the same level as the previous year. In the retail segment, Lavazza has consolidated its leadership with a share by volume of 41.5% and by value of 44.9% (Nielsen figures).
Despite the uncertainty of the economic scenario, which has generated a recurrent sales crisis across the segment, in 2014 the company continued to invest heavily and strengthen its ties with consumers.
Another factor contributing to positive performance last year was the substantial completion of the process of internal reorganisation launched in 2011. In 2014, the company continued to pursue initiatives to implement the Lavazza Model in all Italian production facilities. This involves a fully polyfunctional production setup, achieved by improving process flexibility and efficiency, enhancing the value of competences, and optimising work organisation. The result is an improvement in terms of competitiveness, accompanied by cost containment.
“2014 is a year we won’t forget easily,” said Lavazza CEO Antonio Baravalle, “Faced with a global market still in recession for most of the year, Lavazza has not only maintained its positions but also grown, increasing its presence abroad and significantly improving profitability and competitiveness. The completion of the reorganisation process and substantial investments in innovation and research were the challenging features of 2014, ensuring that the company is ready to compete as a global player at a crucial time for the entire segment, in which Lavazza wants to play a leading role, with organic growth accompanied by acquisitions”.
Lavazza’s research and development efforts in 2014 were of historical importance for the company. The most significant project in terms of innovation was ISSpresso, the first capsule espresso machine able to operate without gravity, which was sent just a few days ago into orbit on the International Space Station, and which last May 3 made the first espresso coffee drunk in space.
Another showcase product, in the environmental sustainability arena this time, was the development of the first compostable capsule, which can be disposed of with domestic organic waste. Presented to the public in March this year, the compostable capsule marks another step forward on the path to sustainability that the company has always followed.
Planned in conjunction with the reorganisation process, in 2014 Lavazza completed a significant investment plan, representing a rise on the previous year to a total of about EUR 180 million, all in Italy. The most important initiative was to increase the capacity of the Gattinara (Vercelli) production facility, where all capsules for espresso systems are produced and where the first Roast&Ground line was launched early in 2015. Work also continues on the construction of the group’s new headquarters in Turin, which will be ready in 2016.
Turning to the first months of 2015, Baravalle commented: “the year got off to a good start on the back of results in Germany, France, the UK, the US and Australia, which reported double digit growth as a result of investments in marketing up more than twofold against 2014. At the same time, we have to take account of the economic situation in Italy, which for the moment is showing only timid signs of recovery. Faced with this, Lavazza confirms its commitment to keeping close to consumers, through targeted commercial policies involving very substantial investments. This said, 2015 is a very special year for us: Lavazza, the icon of Italian coffee in the world, is celebrating its first 120 years in business, an important milestone for a family business now in its fourth generation, and also playing a leading role at EXPO 2015 as the Official Coffee of the Italian Pavilion”. View the full report here.
