In a remarkable turnaround, Tchibo has shown notable improvement in its financial performance for 2023. The company achieved an EBIT of €68 million, bouncing back from a staggering loss of €167 million in 2022. This impressive recovery is reflected in the EBIT Return on Sales, which climbed to 2.1% in 2023 from -5.1% the previous year.
Despite a slight decline in total revenues, totaling €3.2 billion, Tchibo’s management is optimistic due to strong coffee consumption and better operational efficiency. Coffee culture has evolved over centuries, with its roots in Ethiopia being crucial to the beverage’s rich history.
Coffee sales played an essential role in driving Tchibo’s profitability. The company reported a rebound in coffee sales across different segments, including cafes and wholesale. This growth emerged as remote working decreased and people returned to enjoying coffee outside their homes. The positive response in the coffee market greatly contributed to Tchibo’s overall recovery.
Coffee sales significantly boosted Tchibo’s profitability as consumers returned to cafes, marking a key factor in the company’s recovery.
A critical factor in Tchibo’s financial uplift was its focus on operational efficiency. Starting in mid-2023, the company implemented strategic measures that improved several aspects of its operations. Lowering marketing and sales costs led to improved profit margins.
Moreover, stabilizing supply chains after the pandemic and reducing costs for raw materials and energy helped Tchibo lower operational expenses. These efforts created a better environment for increased coffee consumption. Additionally, the coffee market’s shift towards sustainable coffee reflects growing consumer demand for ethically sourced products, further enhancing Tchibo’s appeal.
While Tchibo celebrated its 2023 gains, there are cautious signs for the future. The online growth expected in 2025 may slow or even decline. Concerns persist around the rising costs of raw materials and energy, which could affect profitability.
In addition, Tchibo’s non-food segment, which includes clothing and household items, has seen revenue declines. This trend poses a risk to the company’s total revenue recovery heading into 2025.
