Earnings call transcript: De Longhi Q4 2024 reports 14% revenue growth

De Longhi SpA (DLG) reported a 14% increase in total revenue for the fiscal year 2024, with significant growth in its coffee machine segment. Despite missing revenue forecasts, the company’s stock price rose by 1.54% in pre-market trading. The earnings call highlighted strong performance in key markets and ongoing strategic initiatives. According to InvestingPro data, the company has demonstrated robust revenue growth of 28.09% over the last twelve months, with a market capitalization of $4.78 billion.

Key Takeaways

• Total revenue growth of 14% in 2024, driven by coffee machines.
• Adjusted EBITDA reached €559.8 million, representing 16% of revenues.
• Stock price increased by 1.54% in pre-market trading despite revenue miss.
• Proposed an 87% increase in dividend for 2025.
• Continued focus on international expansion and product innovation.

Company Performance

De Longhi demonstrated robust performance in 2024, with a 14% increase in total revenue and a 6.6% like-for-like revenue growth. The company’s coffee segment, which accounts for 62% of its turnover, led the growth, supported by strong demand in Europe and the Americas. De Longhi’s strategic focus on innovation and international market expansion contributed to its positive results.

Financial Highlights

• Revenue: €1.27 billion, up 14% year-over-year.
• Adjusted EBITDA: €559.8 million, 16% of revenues.
• Net financial position: €643 million.
• Free cash flow: €416 million, with a 74% cash conversion rate.

Earnings vs. Forecast

De Longhi’s actual revenue of €1.27 billion fell short of the forecasted €1.97 billion, representing a significant miss. Despite this, the company’s strategic initiatives and growth in key segments helped maintain investor confidence, as reflected in the pre-market stock price increase.

Market Reaction

Following the earnings announcement, De Longhi’s stock price rose by 1.54% in pre-market trading, reaching €31.74. The stock has shown resilience, trading within its 52-week range of €24.84 to €34.82. The positive market reaction suggests investor confidence in De Longhi’s strategic direction and future growth potential. InvestingPro analysis shows the stock has delivered impressive returns, with a 55.89% gain over the past six months and a year-to-date return of 8.86%. Based on InvestingPro’s Fair Value analysis, the stock is currently trading near its fair value.

Outlook & Guidance

Looking ahead, De Longhi expects revenue growth between 5-7% for 2025, with adjusted EBITDA guidance set at €550-600 million. The company plans to continue its focus on mergers and acquisitions, particularly in the coffee and kitchen appliances sectors. InvestingPro data reveals the company’s strong financial position, with a Financial Health Score rated as "GOOD" and a 24-year track record of consistent dividend payments. For deeper insights into De Longhi’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. De Longhi also anticipates a €15-20 million impact from U.S. tariffs, which it aims to mitigate through pricing strategies and cost management.

Executive Commentary

"We are extremely satisfied with the latest achievements," stated CEO Fabio De’Longhi, emphasizing the company’s strong performance and strategic priorities. Group General Manager Nicola Serrafin noted, "We see a positive momentum in this moment," highlighting the company’s growth trajectory and market opportunities.

Risks and Challenges

• Potential impact of U.S. tariffs on profitability.
• Supply chain disruptions affecting production costs.
• Increased competition in the coffee machine and kitchen appliance markets.
• Economic uncertainties in key markets, particularly in Europe and the Americas.
• Balancing innovation with cost management to maintain competitive advantage.

Q&A

During the earnings call, analysts inquired about the company’s strategy to mitigate the impact of U.S. tariffs and the outlook for the professional coffee business. Executives reiterated their focus on pricing strategies and cost management, as well as continued international expansion of the NutriBullet brand. The potential for mergers and acquisitions in the coffee and kitchen appliances sectors was also discussed, with executives emphasizing its priority in their strategic plans.

Full transcript - De Longhi SpA (DLG) Q4 2024:

Conference Operator, Corusco: Good afternoon. This is the Corusco conference operator. Welcome and thank you for joining the Delonghi Full Year twenty twenty four Consolidated Results. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions.

At this time, I would like to turn the conference over to Mr. Fabio De’Longhi, Chief Executive Officer of De’Longhi. Please go ahead, sir.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Thank you very much. Good afternoon, ladies and gentlemen, and welcome to the De’Longhi Group Full Year twenty twenty four Results Conference Call. Today, together with me are Nicola Serrafin, Group General Manager Marco Cengci, Chief Planning and Control Officer Second O’Bella, Chief Financial Officer Samuel Ekudetto, Investor Relations Director and M and A Manager and Sagamato Kato, IR Specialist. I’m extremely pleased with the Group ’20 ’20 ’4 results, which show a significant improvement in all the financial key performance indicators. These results reflect consistent organic growth combined with an acquisition driven turnover expansion.

A record EBITDA level more than €400,000,000 in free cash flow before dividends M and A, establishment of a professional coffee hub and a straightened market position. As can be observed on Slide five, the group revenue growth has been consistent and solid throughout the year with the household business experiencing robust organic expansion for the sixth consecutive quarter, thanks primarily to the structurally trending coffee and a renewed consumer focus on nutrition, driven by consumer changing habits. These trends combined with Amazocco consolidation has supported a 14% turnover increase, which accelerated to 18% in the fourth quarter equal to 11% on a like for like basis. We have sustained this upward trend over the years by investing continuously in innovation and communication, resulting in market leadership and growth. Specifically in 2024, we spent more than million in AMP, million above previous year, backing new product launches and establish brand awareness across regions and categories.

Furthermore, in the recent months, we’ve been working on the new Carfetto campaign, which will once again feature Brad Pitt as a coffee ambassador in the global advertising campaign. Looking ahead to 2025, these investments combined with a new product introduced in recent years are critical for driving category expansion and capitalizing on market opportunities, giving us confidence in a growth year. In terms of profitability, as shown on Slide six, we were able to significantly improve the level of EBITDA margin over the last two years, thanks to volume growth, stabilization of production costs and a positive product mix effect indicating that consumers interest in the premium segments of our product portfolio keeps increasing. In particular, while considering the last 12, the like for like margin enhancement and accretive professional coffee consolidation has allowed the group to target a record EBITDA. Looking ahead to ’25, we believe that expected volume growth and improved product mix will offset the impact of current tariffs regarding goods produced for The U.

S. Market as well as ordinary investments in organizational structure, resulting in an increase in EBITDA. Finally, Slide seven, the group ended 2024 with a positive net financial position of more than $600,000,000 roughly equivalent to the previous year. But after funding approximately $100,000,000 in dividends and more than $300,000,000 for the business combination of Lamart Zocco and Eresis. This solid financial position enables us to maintain full flexibility on capital allocation for potential external growth opportunities as well as shareholder remuneration as demonstrated by substantial increase in a proposed dividend for 2025.

The past twelve months have been extremely fruitful for us in term of the accomplishment made. Consumer preferences and awards for distinctive design and innovation have been rewarded, our products in the key areas, reinforcing our position as an industry leader in our core categories. Sustainability remains a fundamental element of our company’s strategic vision. And in recent months, we have been working on a number of initiatives, including pioneering eco design guidelines for coffee makers and original product refurbishment project and commitment to science based target initiative. Lastly, let me remind you that the business combination between Landmark Zocco and Evasis has accelerated the group growth rate, straightened its margin profile and increased business diversification.

This has reaffirmed the Group capacity to identify successful companies in the market for innovation and brand, which is consistent with the strategy implemented in recent years. After less than a year, we began putting in place a stronger governance system with a goal of further leveraging the market leadership and superior technological innovation capabilities of Evacis and La Marzocco. This will be done by making the most of shared resources and exchanging best practices and knowledge to enhance value creation. Now let me focus on the quarterly and full year results. The group achieved a robust increase in turnover of 14% in the twelve months, due to a considerable 6.6% growth on a like for like basis, as well as the consolidation of La Marzocco.

Specifically in 2024, the group recorded a positive trend in all geographical areas with Europe experiencing significant growth in all the quarters. Under analysis and The America accelerating the second part of the year in more details, in Western Europe, the turnover grew 10.4% over the year and 6.8% on a life for life basis, accelerating to 10.5% in the quarter with countries such as Germany, the European Peninsula, Austria and Switzerland leading the pack. The solid expansion of Northeast Europe persists in the fourth quarter, recording an increase of 14.1% on a like for like basis, thanks to considerable contribution of markets such as United Kingdom and Czech Republic, Slovakia, Hungary area would experience a like for like growth at around mid teen rate. EMEA achieved a significant recovery in the fourth quarter with a performance of 47.3%, thirty eight point one % at constant perimeter, resulting in a twelve month growth of 9.2% despite geopolitical tensions and macroeconomic uncertainty. The Americas recorded growth of 19.2% in the twelve months, equal to 5.9 at constant perimeter, accelerating to 14.3% in the fourth quarter, benefiting from the double digit progression of fully automatic coffee machines and then ultra bullet personal blenders.

Finally, the Asia Pacific region benefited from the consolidation of La Marzocco, achieving a 10% increase of turnover compared to quarter four twenty twenty three. However, like for like revenues show a partial decline in both periods analyzed. In both periods under analysis, all key categories except comfort showed a positive trend with the nutrition and food preparation sector accelerating in the second half of the year. In details, at the end of twenty twenty four, the overall incidence of the coffee area on the group turnover was approximately 62%, also thanks to the consolidation of La Marzocco. The significant increase of the home coffee was driven by the growth of fully automatic coffee machines.

Regarding the professional sector, we know the continued progression of La Marzocco that consolidates the strength of its brand, both in the semi automatic professional coffee machines and in the home premium segment. Nutrition and Food Preparation segment recorded a major acceleration in quarter four at a rate higher than high teens. We emphasized evolution of the blender category, personal blenders and blenders and blenders through the year together with a return to growth of the more traditional products such as kitchen machines. Concerning the home care sector, let me highlight a significant expansion of Brown brand ironing products, which experienced a double digit growth in the twelve months, while unfavorable weather condition in both summer and winter, as well as the tail end of the discontinuity of the mobile air conditioning in American market affected the comfort sector in 2024. Looking now at the evolution of the operating margins, the net industrial margin stood at 50.6% of revenues compared to 48.9% in 2023, benefiting from volumes and mix increase in the easing of inflationary pressures on product costs.

EBITDA adjusted was 559,800,000 in the year or 16% of revenues compared to last year 14.4% with the quarter four highlighting margin of 17.7% versus 16.6% in 2023. Aside from La Marzocco consolidation, profitability has been enhanced by a significant volume effect, cost stabilization and a positive prime mix contribution. I’d like to point out that the margin improvement occurred despite a 42% increase in investments in Media and Communication A and P, which accelerated in the second half of the year to support the launch of the new products and Nutribullet geographical expansion in Europe. As to balance sheet, the group ended the quarter with a positive net financial position of $643,000,000 following the distribution of more than $100,000,000 in dividend to shareholders and $327,000,000 of net absorption in relation to the closing of the business combination between La Marzocco and Everest. Four, free cash flow before dividends and acquisitions amounted to €416,000,000 for the year, demonstrated the group exceptional ability to maintain a high cash conversion rate, which in the last twelve months was around 74% on adjusted EBITDA.

This enables us to be more flexible in terms of capital allocation resulting in a significant higher dividend proposal for 2025. The proposal implies a distribution of a dividend of per share and an 87% increase over the previous year, resulting in a payout ratio of around 60% compared to the standard 40% defined by dividend policy. Summary, we are extremely satisfied with the latest achievements, which underline the group ability to deliver results. The FDA market has shown positive dynamics across the quarters with our categories benefiting especially from the structural trend in coffee and a renewed focus on nutrition. This consistent growth trends combined with industrial cost stabilization and the mix improvement have enabled us to significantly improve the group profitability, which combined with expansion of the Permian Professional Coffee has resulted in a record EBITDA level.

Thanks to these results, we were able to generate important cash flow once again allowing the group to maintain full flexibility on a capital allocation to promptly exploit potential external growth opportunities, as well as in terms of shareholder remuneration. During despite the increased volatility that characterizes the current geopolitical backdrop, we believe that the overall outlook for our key sectors and markets remains favorable. We expect a turnover increase between 57% for the new perimeter in 2025 based on the recent growth trends in the market and product launches supported by communication investments. In terms of margins, we anticipate an adjusted EBITDA in the range of $550,000,000, 6 hundred million new perimeter given the current situation with tariffs on new products inbound for the American market. Now we can open the floor to Q and A.

Conference Operator, Corusco: Thank you. This is the Corusco conference operator. We will now begin the question and answer session. The first question is from Niccolo Storoz, Kepler. Please go ahead.

Niccolo Storoz, Analyst, Kepler: Hi, Fabio. Hi, everyone. Thanks for taking my questions. Three. The first one is on your EBITDA guidance.

I was wondering how big is the impact of tariffs And where are you in the process of moving sourcing to Indonesia? The second question is on working capital evolution. Also this year, you ended with negative working capital broadly in line with previous year. Should we expect this to continue in the future? Or also this year or I mean, this year, we had some exceptional positive impacts, which will not be recurring?

Last question is on cash flow. If we go to presentation, Slide 18, if you comment on what is the other for positive EUR 57,000,000? Thank you.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: First question, Nicolas, was on EBITDA guidance. Yes, EBITDA consider the tariffs that have been announced. We think the impact would be between $15,000,000 and $20,000,000 net of actions, which means that in the plan we have some price mix effect as well as volume effect, but the net impact which will be offset would be around $15,000,000 and $20,000,000 We were moving, yes, indeed. So the plan is still in place. We’re moving to Indonesia and Southeast Asia and we think by September, we will have about 80% of the NutriBullet production moved to Southeast Asia.

Second question is about net working capital. It’s negative. It’s a number of years that we end the year with a negative working capital. I think this is, I would say, a new normal. So you can expect working capital to be around this level as a percentage of sales in the next year or years.

Third question was about the cash flow. For yes, Vivien and Nicole, you want

Nicola Serrafin, Group General Manager, De’Longhi Group: to end on Exchange rate is more related to exchange rate effect.

Second O’Bella, Chief Financial Officer, De’Longhi Group: Yes. Exchange rate effect on balance sheet.

Nicola Serrafin, Group General Manager, De’Longhi Group: On balance sheet, yes. This is the

Isakobranvilla, Analyst, Mediobanca: So say it again?

Nicola Serrafin, Group General Manager, De’Longhi Group: It was more the exchange rate effect on balance sheet.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Thank you.

Conference Operator, Corusco: The next question is from Natasha Brilliant, UBS. Please go ahead.

Natasha Brilliant, Analyst, UBS: Hello, good afternoon, everyone, and thank you for taking my questions. Three as well, please. So the first one is just on current trading. We’ve seen some negative signals from other consumer companies in the last couple of weeks. So can you just give us an update on current trading so far this year and any changes particularly to the sellout rates that you might be seeing?

Second question is on capital allocation. Obviously, a higher dividend with the strong cash flow. Is this a signal together with the small buyback about higher ongoing shareholder returns? Or is M and A still a top priority? And any updates on the pipeline there?

And then question number three is around the overseas contracts with Starbucks. If you could just give us an update as to where we are with the trial and the rollouts? Thank you.

Nicola Serrafin, Group General Manager, De’Longhi Group: For any color, maybe

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: you can handle current trading. I can take the question on current trading. So for

Nicola Serrafin, Group General Manager, De’Longhi Group: the time being on the first two and last month, we see a positive still positive momentum in this month. Yes, that is in line with the forecast and in line with the guidance that we have provided. Market is positive in this moment. So we do not have a major concern, if not the impact that we have spoken before about the tariffs and The U. S.

But in general, in all the other geographies is a positive trend.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Good. Thank you, Nicola. Yes. So second question is on capital allocation. No, M and A is still a priority, still our top priority for the year.

They say that the new or extra initiatives that we have announced, which are the buyback and increased dividend are just a consequence of the superior cash generation that we experienced in the final part of the year, which is in the end leaving unchanged our firepower with Repasto acquisition with cash position of net financial position of $640,000,000 dollars even if we have announced $60,000,000 increase dividend, the firepower remains almost unchanged. And the third one is on adhesives. Yes, we are moving on with good news. I mean, the Starbucks is extremely committed and we have maybe slightly accelerated the plan. 30 units would be invoiced in the month of March, which is good news.

This is a, say, the final test and we are now discussing the 400 unit that we were we had already announced and would be invoiced before year end, so in the second part of the year. But Sabax has confirmed that coal brew is at the top of their priorities and they’re pleased with the project and we’re moving on.

Natasha Brilliant, Analyst, UBS: Super. Thank you very much.

Conference Operator, Corusco: The next question is from Isakobranvilla, Mediobanca. Please go ahead.

Isakobranvilla, Analyst, Mediobanca: Hi, good afternoon, everybody. Thanks for taking my questions. I have two. The first one is on AMP. Pavel, you mentioned briefly the commitment to work on a new Perfecto campaign.

How should we figure out the impact on A and P on sales this year compared last year, if we have any specific impact meaningful for that? Second question is on the Americas region. Many concerns over the past weeks over a deterioration of U. S. Consumer environment.

Actually, the final quarter of the year for you was very positive. Could you just comment on the approach of like consumers and distributors you are seeing over the past weeks amid growing tariff news flow?

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: So first question is about A and P. Maybe I will leave the no, Nicola, just a minority is that the marketing team just returned from New Zealand, where we have shot the new infomercial with Brad Pitt starring. So we will kick in by mid year with a new campaign. We’re very excited about that and the continued relationship with Brad, which has been very effective in the past years and have the company to have more visibility globally and improve its positioning in the marketplace, exploit good share performance. Having said so, maybe, Nicolas, you can handle what are the investment that we expect for the year?

Nicola Serrafin, Group General Manager, De’Longhi Group: Thank you, Patrick. Yes, as you have seen, we have invested more in 2024 compared with 2023. And then we have the plan also going on growing the investment also in 2025, supporting also the new campaign that will be launched soon. Obviously, we will A and P is a growth driver for us. We build to grow on this.

And so we want to support this keeping more or less the same incidence on revenue. We need to consider that now that we are consolidating the professional business, you can see a bit of dilution. But if we look the incidence on the household business, we are keeping the same level in insurance. So A and P will grow with the growth of the business.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Okay. Now, Nicolas, can I also elaborate a bit about you can also make well, sales, Nicolas, you said they are in line with our guidance?

Nicola Serrafin, Group General Manager, De’Longhi Group: In this moment, yes, overall in the geographies. Obviously, in The U. S, for the time being, we didn’t have major effects. Obviously, we are managing duty in terms of impacting P and L. We are in strict contact with all the retailer and customers to minimize and keep momentum with consumer.

Obviously, we could expect a bit of softening the market, but we will put up all the necessary action to keep. Espresso is not penetrated, highly penetrated category, so it could be even not a better effect. So we want to be still positive and we will work to have all possible actions with the retailers. Yes. Okay.

Conference Operator, Corusco: The next question is from Alessandro Chacchini, Equita. Please go ahead.

Alessandro Chacchini, Analyst, Equita: Hello, everybody, and thank you for taking my questions. The first one actually is on the pipeline of new products, product launches. In particular, we saw last year, so 2024, that manual machines were actually down year on year. So just to understand if you expect 2025 to be a good year in term of pre launches, in particular, in the coffee business and the manual machines business in order to support the top line expansion? This is my first question.

My second question is instead on the professional business. I mean, last year was all in all probably up versus down, La Marzocco up, but it’s larger. So overall, probably it was up. What are your expectation for this year for the professional business considering that probably overseas is turning around? So if you can elaborate a little bit more on these.

And finally, on the net income, we saw that you had very small negative financial expenses, probably there are some one off ForEx something negative to smooth the total figures. So thank you.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Okay. Maybe, Nikkor, you want to comment on the launch?

Nicola Serrafin, Group General Manager, De’Longhi Group: So on the new product launches, Pamper Machine had, let’s say, had overall a slightly negative year, but there was a fourth quarter very strong double digit. So this is already giving a signal of the momentum that is already there also in the current trading and is on the back of a couple of important launches that we had on the Specialista range. We have launched a digital machine and also in the pump range, we had a mainstream product that is very successful in this moment. So it’s keeping momentum. Then we had a robust pipeline of launches also in we have some novelty coming fully out of machine in machine in NutriBullet and Brown and also in a premium kitchen machine.

So we are quite positive and optimistic in the contribution of the new launches for the next month.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Professional business, we are very positive for professional business. Last year was a very good year for La Marzocco. Unfortunately, it was a weak year as anticipated for Genesis, in particular with suffering from weakness in Asia, in particular in China. But this year, we have expectation to see both companies positive, in particular with a bounce back at Evasys, also on the back of significant contract in China and continued positive performance in the key markets, namely North America, United States and UK and Ireland. So positive on both businesses.

And with regards to the final expenses, so you want to end on that?

Conference Operator, Corusco: The next question is from Luca Bacoccoli, Inteos Sao Paulo. Please go ahead.

Second O’Bella, Chief Financial Officer, De’Longhi Group: Hello. Good afternoon, everyone. Can you hear me?

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Yes, yes. Sorry, Luca, sorry, can you ignore the moment? We have to comment on the financial equity on the financial expenses.

Conference Operator, Corusco: Thank you for that.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Yes. Sorry, Mr. Michele will handle this question. Mr. Guela will handle this question.

Interest, there will be interest income deriving from the cash that we have on hand. Therefore, if we continue to have a positive cash, share, we have also positive income from investment. Can you hear me?

Second O’Bella, Chief Financial Officer, De’Longhi Group: Yes, yes. You can go ahead.

Alessandro Chacchini, Analyst, Equita: Okay, okay, okay. Because and a follow-up, thank you for this. In particular, I would like to be back a little bit on The U. S. Coffee.

So probably you will launch a Rivelli also in The U. S. You are addressing manual machines. So can you provide maybe more granularity what you are seeing now in this moment in the coffee business in U. S.

Market? Because actually you said that it’s not so well penetrated. Understand if actually the momentum that you had in the fourth quarter is continuing in The U. S. Also driven by this kind of products in this market?

Nicola Serrafin, Group General Manager, De’Longhi Group: Okay. Yes. We are launching the value and fully auto has good momentum in this moment. So and they are not affected by any tariffs. So this is definitely a good potential growth pillar for us.

And then the capsule machine are going still pretty well. The major area of attention in this moment can be eventually other categories. But for the time being, we are positive on coffee in The U. S.

Alessandro Chacchini, Analyst, Equita: Thank you.

Conference Operator, Corusco: Next question is from Luca Bacall, Colintesi of Sao Paulo. Please go ahead.

Second O’Bella, Chief Financial Officer, De’Longhi Group: Yes, thank you. And first of all, congratulations for the very strong results. So some follow-up question. The first one is on duties. I was wondering if can we expect some positive impact once you have completed the relocation of the production to Southeast Asia?

So let’s say starting from 2026 given the EUR 15,000,000, EUR 20 million net impact that you are expecting in 2025? And also, still on the duties, if you can help us in quantifying what could be the impact if Trump were to impose similar tariffs on European products? And the other question is on capital allocation. I understood that this, let’s say, extraordinary dividend is because of the massive cash flow generation that you delivered in the last quarter last year. But is it fair to assume a 60% payout ratio going forward in the absence of any M and A or is this

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: too optimistic

Second O’Bella, Chief Financial Officer, De’Longhi Group: assumption? And finally, on the professional coffee, you’re expecting both the two brands or companies, Sola Marzoc, and Agencies contributing there positively to the growth. But in terms of costs, should we expect some savings given that, if I understood correctly, you start to really integrate these two companies? Thank you.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: So the first question is about duties and well on targets to positive, I think is to end. I mean, we are very happy. In the end, we think that the long equity story and the long ability to be a successful player in the industry given to a stronger industrial diversification will be improved after this initiative with no to offset the tariffs. I think to have another area of sourcing, namely Indonesia and Saudi Arabia in the long run will be an asset. But it’s too early to be positive.

I think we new factories will be up and running. We confident that we can offset the incremental cost due to the tariffs, but to have positive expectations is a bit too early to say. I think this is something that we will certainly look at, but probably maybe next year we’ll be in a different position to see what is the opportunity arising from the relocation to Southern in Asia. The second question is about Europe. Nicole, I mean maybe more

Nicola Serrafin, Group General Manager, De’Longhi Group: or less we have a balanced cost of goods and supply from Europe and from China and Europe. Obviously, the impact on Europe for the time being will be fully, while in China it’s partially mitigated going to Indonesia and Thailand. In Europe, it will be could be a bit higher for the same level of tariffs. But the major concern at that time could be really the consumption level of The U. S.

If also goods from Europe can be imposed. Yes, and this would affect all players. So it’s a better on the fully automatic coffee machine. So that’s because of all coffee fully automatic coffee machine and are coming from Europe.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: So So capital allocation, we think that the increased dividend is in the end a small increase compared to the cash that we have generated. Frankly, we could have increased the dividend easily to $400,000,000 5 hundred million dollars given the net financial position, but our priority remain M and A and we will just a small allocation to improve the remuneration of our shareholder, but maintaining intact the firepower on M and A, which in the end within that maybe the complexity in the world due to the current commercial war between The United States and China. Some will maybe give an extra opportunity to the ones that have a more solid position from a financial standpoint as De’Longhi with a strong cash position. And we want to maintain M and A as a priority for us. Although we continue to utilize potentially initiatives as the buyback eventually in the short term.

Last question on professional, yes, I think I commented before. Both brands are also growing the short term. I think we had positive January and February for both brands. We think that this will continue the good momentum, probably with a strong acceleration for Evisys, which will bounce back after a very weak 2024 in particular with with sales back to growth in China. With Profellio, we discussed about the coffee hub and the new division.

We don’t like to talk too much about the integration. We think we have two companies with a very different identity, culture and focus. And we want to leverage opportunities together. And we are already starting initiatives in the commercial side, in particular we have announced that a company that is controlled by La Marzocco in Australia will start the distribution of devices machines and also support devices with after face service. We have a new commercial organization in Asia in place, which is now starting to follow both brands in Japan in particularly.

And we have initiatives now with the teams in terms to extract synergies on purchasing and on the cost side. So we’re at the beginning and we think that probably by June we will start explaining what are the results of this initiative to you.

Second O’Bella, Chief Financial Officer, De’Longhi Group: Okay. Thank you very much.

Conference Operator, Corusco: The next question is from Hela Taruk, ODDO BHF. Please go ahead.

Hela Taruk, Analyst, ODDO BHF: Yes, good afternoon, everyone, and thank you for taking my questions. I have two. The first one is on the professional coffee. Could you please give us the contribution of the professional coffee segment in 2024 in terms of revenue and EBITDA? And maybe if you can have we can have the split between Eversys and Lamart Zocco?

And my second question is on Nutribullet. Could you give us a good contribution of Nutribullet in full year 2024 results? And you talked about the geographic expansion of Nutribullet in Europe. Could you give us more details about this? Thank you.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Okay. So in time of, yes, we will give visibility to the division for next year. And at the moment, the revenues for the professional division would be about 10% of total sales and around $330,000,000 for the twelve months, which include only ten months for La Marzocco. Okay. About Nootebullet, let’s say it was a

Nicola Serrafin, Group General Manager, De’Longhi Group: great year for Nootebullet because it’s grown the brand grown 20 plus percent in overall with, let’s say, a pretty consistent growth both in The U. S. Thanks also to a couple of new important leasing with some relevant customers and the international expansion that was 25% plus.

Conference Operator, Corusco: Okay. Thank you. Thank you so much. The next question is from Francesco Brili in Termont. Please go ahead.

Francesco Brili, Analyst, Termont: Yes. Good evening, Fabio and Tims, and thanks for taking my questions. I have three questions. The first one is just a clarification on the guidance and the relative impact on tariffs. I’m not sure to catch it correctly.

Just that you can go through again to if the guidance includes some mitigation some mitigation actions that you could take to mitigate part of the impact on tariffs? Or it’s something that should be added to this in case? And the amount of the magnitude of tariffs that you have set in this analysis in terms of the impacts? The second one is on and a follow-up on Nitsugulet. If you think that the international expansion is on the way and sustained revenues in Western Europe, Do you think that further tariffs between Europe and U.

S. Can be detrimental to these, so to the expansion on multi bullet in Europe? And the last one is on CapEx. I saw likely declining percentage on sales of CapEx. Should we expect the same going forward for the next year?

Thank you.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Guidance. So I will make it, without the $20,000,000 of tariffs, probably Agada would be closer to $600,000,000, 6 20 million dollars. But given the extra costs that net effect of about $20,000,000, the guidance now is $580,000,000,

Nicola Serrafin, Group General Manager, De’Longhi Group: 6 hundred million dollars net.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Just to give an idea, it’s incorporated. The net effect of the negative effect of the 20,000,000 is in the numbers. On the current. Yes, on the new guidance.

Francesco Brili, Analyst, Termont: Yes, perfect. Okay. And it’s including the mitigation effect that you

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: will tell me. Nutribullet, Nicola, you can

Nicola Serrafin, Group General Manager, De’Longhi Group: go ahead. Nutribullet, we do not see major risks that the current situation can affect the international expansion. International expansion is on track. As I mentioned, it’s in between 25% to 30% of growth year on year. And we see this also from market share point of view in blending.

We outside of The U. S, we are heading to close to a leadership position that is very promising in this moment. So there is a positive momentum on this.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: There is a very fragmented market. We are just monitoring about 30 plus market around the world including China where blenders are usually cooking blenders not the traditional blenders as we know them and excluding also not AmeriWeb. In the end, NutriBullet has by far leading position in the personal blending segment. We have a market share now around 10% globally, which makes us one of the leading brands. Great.

Well done. And third question is about CapEx. Yes, slightly negative. Nicolas, you can add Yes, we are, let’s say,

Nicola Serrafin, Group General Manager, De’Longhi Group: we are beating also, we had some investment in the past few years. As you know, we are expanding also our

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: manufacturing

Nicola Serrafin, Group General Manager, De’Longhi Group: capacity to support volumes. 2024 was a bit lower and we see more or less the same trend also for 2025. This moment is we are exploiting the capacity that we have built. That is there and sustained growth that is coming.

Francesco Brili, Analyst, Termont: Thank you. Thank you very much.

Conference Operator, Corusco: The next question is from Andrea Bonfah, Bank of Acros. Please go ahead.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group0: Hello. Good afternoon to everybody. Most of my questions have already been answered. So I would like to know if it’s possible to expand a little bit, let’s say, the competitive situation of your sorry, again, the repetition competitors in The U. S.

Market as far as industrial production concerned. For what I know, your industrial footprint or better your, let’s say, exposure of Chinese product to U. S. Is lower than your competitors? If you can comment on that and what’s the state of the art in term of local production, if there is any or if that is essentially manufacturing in Mexico?

Thank you very much.

Nicola Serrafin, Group General Manager, De’Longhi Group: Yes. Let’s say that our competitive situation is going is different category by category. For the category that are relevant to us, let’s say that I don’t want to say that we are ahead of the curve, but we are in similar position. Some of our relevant key competitors are falling behind. For example, in blending, there is still a competitor and probably the major one that is most of the production still in China.

In terms of coffee machine, there is limited production for the time being out outside of China. And we are leveraging on our internal competencies also to build capabilities outside of China. So So I would say that more or less we are in a slight advantage and there is no competitor that can have in our category, in the category relevant to us advantage compared with us. There are some factors that are not relevant to us where probably you can have news of competitors that are well positioned, but not relevant to us.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group1: Thank you very much.

Conference Operator, Corusco: The next question is from Geoffrey D’Alhoyen, VMP Paribas Exane. Please go ahead.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group1: Yes. Good afternoon, gentlemen. Two questions, please. Just a follow-up on the competitive on the almonds. Just curious if you’ve seen some changes in terms of competitions, but much more on the European markets and much more on the coffee machines category, especially given the success of the coffee business.

So I’ve seen some players being a bit more aggressive into these categories? And my second question is related to your comments on M and A. So I got you’ve said M and A is the top priority for the company. Any thoughts regarding which categories or which geographies you are looking for and which might be interested to delunk it? Thank you.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: Well, first question about coffee, I would say that then maybe you can I would handle the answer to Nicola? But in coffee, we have grown our shares last year. In fully auto, the competition landscape is exactly the same. Maybe some newcomer is in the pump and granular, which is just a specific segment with Ninja in The United States agenda. But I would say that it’s more or less unchanged the landscape.

Yes, we don’t see major changes. I would say that with Espresso for instance, we are consolidating. We are now winning four new markets. We have announced that. We’re very pleased with France, Belgium, Netherlands and UK.

So I would say that in principle there is more consolidation on the contrary on the cathode market. The new player in to sum up on the pump and grinder and fairly stable environment When the market is expanding

Nicola Serrafin, Group General Manager, De’Longhi Group: new player means also Market is declining

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: and fairly stable on the fully automatic, which is 60% of the long year revenues in home coffee machines. Second question on M and A. Coffee, we said provided there is no issue in antitrust priority. Professional, maybe in the coffee in the Adiascend segments. Still in the kitchen or more typical appliances.

U. S. Was a top priority, maybe still is, but probably for the moment is a very unclear situation also what’s going to happen to U. S. Players after the tariff.

I think we are in a better position as most of our sales are outside The United States. Probably there is an opportunity in The U. S. Market, maybe a player with a specific interesting product or segment and leadership, maybe in the new geopolitical situation there are opportunities which will come up.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group1: That’s clear. Thank you very much.

Conference Operator, Corusco: Gentlemen, Mr. De’Longhi, there are no more questions registered at this time. I’ll turn the conference back to you for any closing remarks.

Fabio De’Longhi, Chief Executive Officer, De’Longhi Group: No. Thank you so much for attending the Delonghi full year twenty twenty four conference call. Thank you.

Conference Operator, Corusco: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephone.

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