Coffee Service

Groupe SEB improves earnings for HY 2023

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July 28, 2023

Groupe SEB, the Ecully, France-based multinational that owns Montebellow, California-based Wilbur Curtis Co., along with other coffee equipment brands, improved its earnings against a slight sales decline for the first half of 2023 against the prior year period, according to a press release.

Highlights include:

• Sales fell 1.5% from €3.66 billion ($4.04 billion) in HY 2022 to €3.612 billion ($3.99 billion) in the half year ending June 30, 2023, but rose 1.3% on a like-for-like basis.
• Basic EPS rose from €1.30 ($1.44) to €1.38 ($1.52) while diluted EPS rose from €1.29 ($1.42) to €1.38 ($1.41).
• After a negative start to the year with Q1 sales down 3.7% LFL, the group delivered organic revenue growth in Q2 of 6.8% LFL in a global macro environment that remained challenging. The performance was driven by the continued buoyant dynamic in the professional segment, up 21% LFL in Q2, which benefited from favorable business trends across the major markets and the return to positive revenue growth in the consumer segment, up 5.2% LFL in Q2, thanks to a sequential improvement in all key markets.
• The 1.5% decrease in reported turnover in the first half includes a 1.3% organic increase, a currency effect of -3.3% mainly from the Chinese Yuan and emerging currencies, and a scope effect of +0.5% related to the acquisition of Zummo in July 2022 and La San Marco in February 2023.
• Professional sales rose 25% to €435 million ($480.19 million) LFL in the first half of 2023, 32% on a reported basis.
• After a stellar performance in the first quarter (29% LFL), the group confirmed its outstanding progress in the second quarter (21% LFL). This momentum was fueled by most markets with China still delivering the highest growth and key historical markets such as Germany or the U.K.
• The consumer business sales fell 1% to €3.18 billion ($3.5 billion), 4.7% on a reported basis.
• In Western Europe, after a 10% decline in the first quarter, sales improved in the second quarter with organic revenue growth reaching 3.3%, on a more favorable comparison basis. In the first half of 2023, sales declined by 3.7% LFL.
• Sales in other Europe, Middle East and Africa countries rose 21% LFL in the first half and 37% LFL in the second quarter.
• First half sales in North America fell 15% LFL and 12% on a reported basis, with a positive effect coming from the exchange rates of the U.S. dollar and the Mexican peso. Sales decline mitigated in the second quarter with a LFL decline of only 7% thanks to a sequential improvement in the U.S. and in Mexico.
• In South America, first half turnover grew by 0.4% LFL but was down 8.7% on a reported basis mainly due to the weakness of the Colombian and Argentinian pesos.
• China sales rose 0.1% on a LFL basis, the result of a negative performance in Q1 (-4.6% LFL) and a significant improvement in the second quarter (5.5% LFL). This solid growth in Q2 was anticipated and is all the more satisfying as it was achieved in a soft market environment.
• In Asia, excluding China, first half revenue declined by around 11% LFL, following a slight sequential improvement in sales in the second quarter.

"Our professional business achieved an outstanding performance in the first half, which confirms our confidence and our ambition in this fast-growing industry," CEO Stanislas de Gramont said in the press release. "In a market environment that remains uncertain, and in an adverse currency context, Groupe SEB will further improve its performance during the rest of the year. Hence, we are strengthening the group's targets for the full year and are now aiming to deliver a mid-single digit organic revenue growth and an increase in our operating result from activity of at least 10%."