UPDATE 1-Exports help Lavazza return to profit in 2012

Fri May 10, 2013 10:42am EDT

* Lavazza raises stake in Green Mountain to 8 percent

* International sales, cost-cutting help Lavazza return to profit

By Isla Binnie

LONDON, May 10 (Reuters) - Italian coffee company Lavazza said on Friday it had raised its stake in U.S.-based Green Mountain Coffee Roasters Inc to 8 percent, underlining its commitment to expansion abroad as it reported a return to profit for 2012.

The Turin-based group, founded by the Lavazza family in 1895, said 46 percent of revenues last year came from international markets, closing in on its aim to make 50 percent of its income abroad.

Focusing on international sales and cost-cutting helped the company resist a protracted recession in its home country to post net profit of 97.1 million euros ($127.15 million) in 2012, compared with a 9 million euro loss in the previous year.

Lavazza said last December it expected the United States to overtake Europe as its second-biggest market behind Italy over the next 10 years.

Chief executive Antonio Baravelle said he hoped to lure home the 85 percent of Americans who drink coffee at cafes with the new single-cup espresso and cappuccino machine Lavazza launched in the U.S. with Green Mountain last November.

Green Mountain, which makes Keurig single-serve brewers and K-cups which allow people to make Starbucks coffee in their machines at home, raised its full-year earnings outlook on Wednesday, sending its shares up almost 16 percent.

Lavazza also plans to penetrate the Indian, Chinese and Russian markets by forging local partnerships.

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