April 2, 2019 / 9:34 AM / 2 months ago

Coffee maker Lavazza to see the perks of recent deals in 2019

MILAN, April 2 (Reuters) - Italian coffee maker Lavazza sees further expansion in 2019, leveraging organic growth and recent acquisitions after core profit rose by 6.2 percent last year.

The 123-year-old company, founded by Luigi Lavazza in the northern Italian city of Turin, has grown through overseas acquisitions in recent years, gradually reducing its exposure to the domestic market that accounted for 36 percent of sales in 2018.

But with revenue of just under 2 billion euros ($2.24 billion) Italy's top coffee company is dwarfed by industry leaders Nestle, JAB Holdings and Starbucks.

The family-owned group last year decided to bring its governance with that of public companies, poaching Enrico Cavatorta as chief financial officer from online luxury retailer YNAP.

In its first financial statement under the IFRS accounting rules, Lavazza said earnings before interest, taxes, depreciation and amortisation (EBITDA) were 197.3 million euros ($221.00 million), up from 185.8 million in 2017.

Revenues rose by 9.3 percent to 1.87 billion euros and by 6.6 percent excluding acquisitions thanks to performance in Italy, boosted by the coffee capsule segment, as well as in France, North America, Eastern Europe and Britain.

Cash-funded acquisitions such as that of the coffee business of Mars Inc. in 2018 meant the net financial position dropped to 15 million euros at the end of last year from 503 million euros in 2017. ($1 = 0.8928 euros) (Reporting by Maria Pia Quaglia, editing by Louise Heavens)

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