Italian coffee roasting company Caffè Borbone reported an 8% increase in revenue during the first half of 2024, reaching €166.7 million.
However, the company's profitability took a hit due to record-high raw coffee prices. EBITDA declined by 9.1% to €37.4 million, and net profit fell from €14.8 million to €12.8 million.
International Sales
Despite these challenges, the company reported strong performance in large-scale retail and international markets, with sales abroad growing by over 50%. This growth is attributed to the company's recent entry into the US market, following the recent establishment of the subsidiary Caffè Borbone America Corp.
To mitigate the impact of rising raw material costs, Caffè Borbone implemented a strategy to minimise price increases for consumers. This approach proved effective in maintaining sales volume.
The company anticipates its annual revenue this year to surpass €300 million, exceeding the previous year's figure.
While revenue increased, profit margins contracted. EBITDA margin dropped to 22.4% from 26.7% in the first half of 2023. The company attributed this decline to the unprecedented cost of Robusta coffee, which remains near historic highs.
Despite distributing €35 million in dividends, Caffè Borbone's cash flow was negatively impacted by a €25 million increase in working capital to accommodate the growing coffee inventory.
Sustainability Targets
During the first half of the year, Caffè Borbone formally committed to the Science Based Targets initiative (SBTi) and is developing concrete plans to reduce CO2 emissions in line with net-zero goals. These targets will be submitted to SBTi experts for validation.
To further reduce its environmental impact, the company has completed the construction of a new 10,000 m² logistics hub near its Caivano plant. This facility, set to open in the second half of 2024, will enhance warehouse efficiency and contribute to the plant's energy independence through a 500 kW rooftop solar system.
