Master Blenders Sales Stagnate Amid Weaker Europe DemandJulie Cruz
D.E Master Blenders 1753 NV, 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.
Like-for-like sales in the period through June were unchanged, the Amsterdam-based company said in a statement today. Master Blenders had forecast 0 percent to 2 percent after lowering the prediction from 3 percent to 5 percent in February.
Demand was weakest in western Europe, where high unemployment and government austerity measures have weighed on consumer spending. Retail sales in the region dropped to 1.23 billion euros ($1.6 billion), a 1.9 percent decline on a like-for-like basis. That offset a 5.7 percent increase to 781 million euros in the rest of the world.
The 12-month underlying operating margin widened by 180 basis points to 13.8 percent, Master Blenders said. That exceeded the coffee producer’s forecast of a 100-to 150-point improvement. Net income rose 48 percent to 196 million euros.
Master Blenders, which sells Douwe Egberts coffee, 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.
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 in the industry’s biggest deal ever. The transaction can proceed with a minimum 80 percent acceptances from shareholders. JAB can close the acquisition immediately with 95 percent acceptances.
Oak Leaf BV, a company owned by a JAB-led investor group, said Aug. 16 that shareholder acceptance was 89.7 percent and it extended the offer period by four weeks to Sept. 17.
Master Blenders shares were almost unchanged at 12.38 euros as of 11:58 a.m. in Amsterdam.
Like-for-like sales exclude acquisitions, disposals, green-coffee exports and currency shifts
Total sales fell 4.1 percent to 2.68 billion euros.