The Italian coffee machine and appliance manufacturer says a challenging economic environment in its key European market has led to falling revenues, but its professional coffee machine segment shows sustained growth
De'Longhi's key European market saw revenues decrease by 10% | Photo credit: De'Longhi
Treviso-based De’Longhi has cited weakened consumer demand and the ongoing impact of microeconomic uncertainty for its 5% fall in third quarter revenues.
Reporting on the three months ended 30 September 2022, De’Longhi achieved revenues of €683.8m ($702.2m), a fall of €34m ($35m) compared to the same period in 2021.
Its key European market saw revenues decrease by 10%, with Italy and the Iberian region the only continental European markets noted as achieving growth in the quarter.
De’Longhi said South-West Europe showed similar dynamics to the previous quarter, which the company labelled ‘a moderate weakness’. Meanwhile the Russian-Ukrainian conflict continued to negatively impact its North-Easter Europe segment.
While De’Longhi’s overall trading in North American fell 8% compared to last year, the company recorded double-digit growth in the coffee segment, supported by a strong acceleration of fully-automatic machine sales.
De’Longhi said the contribution of the professional coffee machines segment across all global markets was largely positive, led by Eversys which continued to show sustained growth. The company acquired the Swiss super-automatic espresso machine manufacturer in May 2021.
Looking at the first nine months of 2022 as a whole, De’Longhi said trading had confirmed the resilience of coffee but a ‘marked weakness’ in its other product categories, particularly food preparation, had hindered growth.
“From a long-term perspective, we have given continuity to the communication and marketing investments foreseen by the three-year plan and which are a solid basis for the growth in the coming years. The indications for our core segments remain unchanged: on one hand, the secular trend in coffee, which is confirmed year after year, with potential growth still largely unexpressed; on the other hand, a deep-rooted presence in leadership positions in the nutrition and cooking world,” said Fabio De’Longhi, CEO, De’Longhi Group.
De'Longhi’s faltering revenues underline weakened consumer confidence in developed markets around the world, which are grappling with high inflation and supply chain challenges arising from the war in Ukraine and the lingering fall-out of Covid-19.
They also mark a decline in fortunes for the manufacturer, which in July 2022 saw half-year sales surge 319.5%, results hailed as ‘extraordinary’ by then CEO Massimo Garavaglia.
In the first nine months of 2022, De’Longhi’s overall revenues fell 1% to €2.1bn ($2.2bn). The company’s full-year 2021 revenues reached €3.2bn ($3.6bn).