illycaffè - 2022 Financial Results

Record growth in revenue (+13.6%): the highest in Ten Years.
Double-digit growth in profitability (+15.8%) in spite of an increase in the costs of production

- Consolidated revenue of € 567.7 million, a 13.6% increase compared to 2021, led by all markets and distribution channels
- EBITDA of € 71.4 million, a 15.8% increase compared to 2021, in spite of an exponential increase in the prices of green coffee and of energy (+ € 43 million in incremental costs)
- EBIT of € 25.9 million, a 24.8% increase compared to 2021
- Net profit amounting to € 14.2 million, an 18.9% increase compared to 2021, exceeding expectations
- Net financial position amounting to € 154.3 million, a 25.0% increase compared to the previous financial year, mainly driven by the general increase in production costs and the investment plan launched in 2022

Milan, 30th March 2023 – The Board of Directors of illycaffè S.p.A. has approved the draft financial statements of the parent company illycaffè S.p.A. and the consolidated financial statements for the 2022 financial year (The consolidated financial statements as of December 31, 2022 were prepared in accordance with IAS/IFRS international auditing standards).

In addition to rising inflation, 2022 also saw increases in the costs of raw materials.

In spite of the uncertain and complex macro-economic context, consolidated revenue in 2022 amounted to € 567.7 million, a record increase of 13.6% compared to 2021, the highest growth rate in ten years.

The growth achieved in 2022 was led by all of the markets and distribution channels in which the Group has a presence.

EBITDA amounted to € 71.4 million, a 15.8% increase compared to the previous financial year. The growth in revenue and the increased operating efficiency of the Group – in keeping with its strategy of sustainable and profitable growth – made it possible to offset the extraordinary pressure on margins dictated by the inflationary framework. Margins stood at 12.6% of revenue, an increase of 30 basis points (0.3%) compared to 2021.

Adjusted EBITDA stood at € 78.2 million, a 10.6% increase compared to the previous year.

EBIT, which amounted to € 25.9 million, also increased by 24.8% compared to the previous year thanks to the evolution of operating profitability and the lower impact of depreciation and amortization on net revenues.

Group Net Income stood at € 14.2 million, an increase of 18.9% compared to 2021, exceeding expectations.

The net financial position stood at € 154.3 million, a 25.0% increase compared to the previous financial year, due mostly to the general increase in production costs, particularly the price of green coffee, and to the investment plan launched in 2022.

Cristina Scocchia, Chief Executive Office of illycaffè commented:
“We are thrilled to have achieved the best results in the last ten years in spite of the challenging macro-economic context.
2022 marked a major milestone towards the achievement of our strategic goals: this year all markets and all distribution channels contributed to our growth, in terms of both revenue and EBITDA.
These results underscore the solidity of the strategic direction we have taken.
Thanks to its superior sustainable quality, illy coffee is one of the crown jewels of the Italian export sector, and we intend to continue to build on this strength by further accelerating our growth on international markets."

Concerning trends on the main markets, in Italy revenue grew by 9.9% compared to 2021 thanks to growth in all distribution channels. In particular, the Ho.Re.Ca channel saw double-digit growth compared to 2021 thanks to a strong acceleration in new client acquisition in the premium segment of the market.

In the United States, a priority market in the strategic plan, revenue grew by 27.4% compared to 2021 thanks to a positive performance in all the main distribution channels and a stronger dollar, leading to a favourable exchange rate.

The other markets in which the group has a presence also saw strong growth compared to 2021. In particular, in China revenue grew by 15% compared to 2021, led by online sales.

Turning to distribution channels, Ho.Re.Ca. registered a growth in revenue of 30.9% compared to 2021, helped by a constantly increasing client base and an increase in average consumption.

In the Retail channel, revenue increased by 42.8% compared to 2021, supporting brand awareness and boosting the customer experience. As of December 31, 2022, illycaffè’s retail network comprised 190 sales points in 34 countries.

Regarding the Home channels, the Modern Distribution channel saw a 4.8% increase in revenue compared to 2021, thanks to a larger distribution footprint, especially in the United States.

In the Online channel, revenue grew by 3.2% compared to 2021 thanks to the further consolidation of partnerships with e-Tailers.

In 2022 the Group continued to operate in accordance with its sustainability strategy, which extends to every phase of the value chain, from coffee producers to final consumers, thanks to the adoption of regenerative and sustainable farming practices, projects to support local communities, the sustainable management of resources, and the application of circular economy principles.

The results achieved thanks to sustainable business management practices were recognized in 2022 by Standard Ethics, which attributed to illycaffè the highest possible level of compliance with the international sustainability indicators established by the European Union, the OECD (Organization for Economic Cooperation and Development) and the United Nations and awarded it as the best of the 30 Italian companies that comprise the SE Food&Beverage Italian Sustainability Benchmark.

On the heels of the results achieved in 2022, in 2023 the Group aims to continue along the growth path identified in the 2022-26 strategic plan, concentrating on further accelerating its international development in the super-premium market segment.

The expected development will be supported by a major investment plan amounting to € 270 million, of which € 120 million destined for a major expansion in terms of production and logistics to be concentrated in Trieste, the Group’s strategic production hub, and focusing on the critical phases of the production process.