Master Blenders Third-Quarter Sales Decline on Price Pressure
D.E Master Blenders 1753 NV, the Dutch coffee company being acquired by Joh. A. Benckiser, said third-quarter revenue fell due to promotions in western Europe.
Sales dropped 3.2 percent to 633 million euros ($823 million) on a like-for like measure and excluding green coffee exports, the Amsterdam-based company said in a statement today. Revenue in western Europe dropped 8.5 percent on that basis.
JAB, the investment arm of the billionaire Reimann family, said on April 12 it agreed to buy Master Blenders, the maker of Douwe Egberts (DE), for about 7.5 billion euros ($9.8 billion) to build a coffee conglomerate in the industry’s biggest deal ever. The transaction is expected to be completed in late July or early August, interim Chief Executive Officer Jan Bennink said.
Sales declined 5.5 percent on a reported basis in the third quarter, Master Blenders said today.
Using the like-for-like measure, revenue in the out-of-home category decreased 3.3 percent.
Master Blenders reduced its 2013 sales and profitability forecasts in February amid increasing pressure on prices in Europe. Organic sales will rise as much as 2 percent in the year through June, the company said at the time, compared with a previous prediction of 3 percent to 5 percent growth. The forecast for operating margins was also lowered at that time.
Master Blenders slipped 0.1 percent to 12.09 euros in Amsterdam trading today. After years of underinvestment when it was part of Sara Lee Corp., Master Blenders’ share price had barely trodden water between its first day of trading on July 9, 2012 and March 28 this year, when the maker of Senseo capsules and JAB announced they were in talks that could lead to a deal.
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