Master Blenders Reports Unchanged Sales on European Drop

D.E Master Blenders 1753 NV (DE), the Dutch coffee company being acquired by Joh. A. Benckiser, reported 12-month sales growth at the bottom of its forecast range as demand declined in western Europe.

Sales in the period through June were unchanged at 2.65 billion euros ($3.54 billion), excluding acquisitions, disposals, green-coffee exports and currency shifts, the Amsterdam-based company said in a statement today. Master Blenders predicted an increase in February of 0 percent to 2 percent, a reduction from a previous forecast range of 3 percent to 5 percent growth.

JAB, the investment arm of the billionaire Reimann family, said April 12 that it agreed to buy Master Blenders, the maker of Douwe Egberts, for about 7.5 billion euros to build a coffee conglomerate in the industry’s biggest deal ever. The transaction was initially subject to shareholders who control 95 percent of the company tendering their stock. The minimum acceptance was lowered to 80 percent after an investor vote.

Oak Leaf BV, a company owned by a JAB-led investor group, said Aug. 16 that shareholders acceptance was 89.7 percent and extended the offer period by four weeks to Sept. 17.

The 12-month underlying operating margin at Master Blenders widened by 180 basis points to 13.8 percent, the company said today. That exceeded the coffee producer’s forecast of a 100- to 150-point improvement. Net income increased 48 percent to 196 million euros.

Master Blenders reduced its 2013 sales and profitability forecasts in February amid increasing pressure on prices in Europe. The company is in the final phase of an 18-month fiscal year as it shifts to a January-to-December reporting period starting in 2014.

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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