TIDM76TQ
RNS Number : 6416P
Nestle SA
20 October 2021
Nestlé press release
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.......................................
[Ad hoc announcement pursuant to art. 53 SIX Listing Rules]
Vevey/Switzerland, October 20, 2021
Nestlé reports nine-month sales for 2021, raises full-year
organic sales growth guidance
-- Organic growth reached 7.6%, with real internal growth (RIG)
of 6.0% and pricing of 1.6%. Growth was supported by continued
momentum in retail sales, steady recovery of out-of-home channels,
increased pricing and market share gains.
-- Total reported sales increased by 2.2% to CHF 63.3 billion
(9M-2020: CHF 61.9 billion). Foreign exchange reduced sales by
2.0%. Net divestitures reduced sales by 3.3%.
-- Continued progress in portfolio management. On August 9,
2021, Nestlé completed the acquisition of the core brands of The
Bountiful Company.
-- Full-year guidance for 2021 updated: we expect full-year
organic sales growth between 6% and 7%. The underlying trading
operating profit margin is expected around 17.5%, reflecting
initial time delays between input cost inflation and pricing, as
well as the one-off integration costs related to the acquisition of
The Bountiful Company's core brands. Beyond 2021, our mid-term
outlook for continued moderate margin improvement remains
unchanged. Underlying earnings per share in constant currency and
capital efficiency are expected to increase this year.
Mark Schneider, Nestlé CEO, commented: "We are pleased with
Nestlé's strong organic growth in the nine months, driven by
broad-based contributions from most geographies and categories. The
relentless focus of our teams on local execution and agility
enabled us to navigate input cost inflation and supply chain
constraints. In the third quarter, we increased pricing in a
responsible manner, while maintaining strong real internal growth.
Investments in innovation, digitalization and sustainability
further supported growth by enhancing the relevance and
differentiation of our offerings.
Nestlé continues to take actions on sustainability. We recently
laid out our plans to support a just transition to regenerative
food systems, which will help achieve our climate targets as we
work closely with farming communities around the world to improve
soil health, restore water cycles and increase biodiversity for the
long-term."
Nestlé
Total .Health
Group Zone AMS Zone EMENA Zone AOA Nespresso Science Other Businesses
------ -------- ---------- -------- ------------ -------------- ----------------
Sales 9M-2021
(CHF m) 63 294 24 589 15 492 15 172 4 654 3 237 150
Sales 9M-2020
(CHF m)* 61 912 24 991 14 952 15 251 4 180 2 421 117
----------------- ------ -------- ---------- -------- ------------ -------------- ----------------
Real internal
growth (RIG) 6.0% 5.2% 6.4% 3.9% 10.4% 14.1% 25.5%
Pricing 1.6% 3.2% 0.8% 0.2% 0.6% 0.1% 2.9%
Organic growth 7.6% 8.4% 7.2% 4.1% 11.0% 14.3% 28.5%
Net M&A -3.3% -6.0% -2.8% -4.1% * 0.1% 22.4% 0.0%
Foreign exchange -2.0% -3.9% -0.7% -0.7% 0.4% -2.8% -2.4%
Reported sales
growth 2.2% -1.5% 3.6% -0.6% 11.3% 33.8% 26.0%
----------------- ------ -------- ---------- -------- ------------ -------------- ----------------
* 2020 figures restated following the disclosure of Nestlé
Health Science and Nespresso as standalone segments from 2021
onwards (previously combined and presented in Other
Businesses).
Group Sales
Organic growth reached 7.6%, with RIG of 6.0%. Pricing increased
to 1.6%, accelerating to 2.1% in the third quarter.
Growth was broad-based across most geographies and categories.
Organic growth reached 7.1% in developed markets, based mostly on
RIG with positive pricing. Organic growth in emerging markets was
8.3%, with robust RIG and positive pricing.
By product category, the largest contributor to organic growth
was coffee, fueled by strong momentum for the three main brands
Nescafé, Nespresso and Starbucks. Starbucks products posted 15.5%
growth, with sales reaching CHF 2.2 billion across 79 markets.
Purina PetCare saw double-digit growth, led by science-based and
premium brands Purina Pro Plan, Fancy Feast and Purina ONE, as well
as veterinary products. Prepared dishes and cooking aids posted
high single-digit growth, based on strong sales developments for
Maggi, Stouffer's and Lean Cuisine. Vegetarian and plant-based food
offerings saw double-digit growth, with continued expansion of the
product range, led by Garden Gourmet. Dairy reported mid
single-digit growth, based on sustained demand for fortified milks,
coffee creamers and ice cream. Confectionery recorded high
single-digit growth, supported by a strong sales development for
KitKat. Sales in Nestlé Health Science grew at a double-digit rate,
reflecting strong demand for consumer care products particularly
vitamins, minerals and supplements. Infant Nutrition posted
negative growth, impacted by lower birth rates globally in the
context of the pandemic and a sales decline in China. In the third
quarter, growth in Infant Nutrition was positive outside of China.
Water reported mid single-digit growth, with strong demand in North
America and emerging markets in the third quarter.
By channel, organic growth in retail sales was 6.6%. E-commerce
sales grew by 17.2%, reaching 14.1% of total Group sales, with
strong momentum in most categories, particularly coffee, Purina
PetCare and culinary. Organic growth in out-of-home channels was
22.8%, helped by the further easing of movement restrictions in
some geographies.
Net divestitures decreased sales by 3.3%, largely related to the
Nestlé Waters North America, Yinlu and Herta transactions.
Divestitures were partially offset by acquisitions, including
Freshly and the core brands of The Bountiful Company. The negative
impact on sales from foreign exchange moderated to 2.0%. Total
reported sales increased by 2.2% to CHF 63.3 billion.
Portfolio Management
Nestlé is transforming its global water business, sharpening its
focus on international premium and mineral water brands and healthy
hydration products. In March, Nestlé completed the acquisition of
Essentia Water, a premium functional water brand in the U.S., and
the sale of its regional spring water brands, purified water
business and beverage delivery service in the U.S. and Canada.
Nestlé Health Science continues to focus on building a nutrition
and health powerhouse. On August 9, 2021, Nestlé completed the
acquisition of the core brands of The Bountiful Company for USD
5.75 billion. The Bountiful Company is the number one pure-play
leader in the highly attractive and growing global nutrition and
supplement category. In July, Nestlé completed the acquisition of
Nuun, a leading company in the fast-growing functional hydration
market, and entered into an agreement with Seres Therapeutics to
jointly commercialize SER-109, an investigational oral microbiome
therapeutic in the U.S. and Canada.
Building on the successful global coffee alliance, Nestlé
continues to expand the reach of Starbucks branded coffee and tea
products outside Starbucks retail stores. In July, Nestlé and
Starbucks announced a new collaboration to bring Starbucks
ready-to-drink coffee beverages to select markets across South-East
Asia, Oceania and Latin America.
Zone Americas (AMS)
-- 8.4% organic growth: 5.2% RIG; 3.2% pricing.
-- North America posted mid single-digit organic growth, with robust RIG and positive pricing.
-- Latin America reported double-digit organic growth, with both strong RIG and pricing.
Sales Sales Organic Net Foreign Reported
9M-2021 9M-2020 RIG Pricing growth M&A exchange Growth
--------- --------- ---- ------- ------- ----- --------- --------
CHF 24.6 CHF 25.0
Zone AMS bn bn 5.2% 3.2% 8.4% -6.0% -3.9% -1.5%
--------- --------- --------- ---- ------- ------- ----- --------- --------
Organic growth was 8.4%, with strong RIG of 5.2% supported by
volume and mix. Pricing increased to 3.2%, accelerating to 5.0% in
the third quarter. Net divestitures reduced sales by 6.0%, as the
divestment of the Nestlé Waters North America brands more than
offset the acquisitions of Freshly and Essentia Water. Foreign
exchange had a negative impact of 3.9%. Reported sales in Zone AMS
decreased by 1.5% to CHF 24.6 billion.
Zone AMS reported high single-digit organic growth, building on
a strong sales development in 2020. Increased pricing, continued
innovation, strong momentum in e-commerce and a further recovery of
out-of-home channels supported growth. The Zone saw continued
broad-based market share gains, led by coffee, pet food and
dairy.
North America posted mid single-digit growth in the context of
significant supply chain constraints. Sales in Purina PetCare grew
at a high single-digit rate, led by Purina Pro Plan, Fancy Feast
and Purina ONE. Purina Pro Plan LiveClear, the breakthrough
allergen-reducing cat food, continued to see strong momentum and
expanded its range to cover all life stages. Nestlé Professional
and Starbucks out-of-home products saw strong double-digit growth,
helped by a low base of comparison. Frozen and chilled food
reported mid single-digit growth. Strong sales developments for
Stouffer's, Lean Cuisine, Freshly and Hot Pockets were partially
offset by a sales decrease in pizza, following a high base of
comparison in 2020. Sales in the beverages category, including
Starbucks at-home products, Coffee mate and Nescafé, grew at a mid
single-digit rate. Water reported mid single-digit growth,
accelerating to a double-digit rate in the third quarter with a
strong sales development for Essentia. Home-baking products,
including Toll House and Carnation, saw a sales decline following
exceptional demand in 2020.
Latin America posted double-digit growth, with broad-based
contributions across geographies and most product categories. Sales
in Mexico grew at a double-digit rate, led by Nescafé and
confectionery brands Carlos V and KitKat. Brazil reported
double-digit growth, reflecting strong demand for confectionery,
coffee and fortified milks. Chile also recorded double-digit
growth, supported by confectionery and ice cream. By product
category, the largest contributor to growth was Purina PetCare with
strong sales developments across all brands, markets and channels.
Sales in confectionery, coffee, particularly Nescafé Dolce Gusto,
and Nestlé Professional all grew at a strong double-digit rate.
Growth in dairy moderated to a low single-digit rate, following
exceptionally strong demand in 2020 particularly for home cooking
and baking products. Infant Nutrition saw mid single-digit growth,
accelerating to a high single-digit rate in the third quarter based
on robust demand for new premium and functional products.
Zone Europe, Middle East and North Africa (EMENA)
-- 7.2% organic growth: 6.4% RIG; 0.8% pricing.
-- Western Europe saw mid single-digit organic growth with
strong RIG and slightly negative pricing.
-- Central and Eastern Europe posted double-digit organic
growth, with strong RIG and positive pricing.
-- Middle East and North Africa reported high single-digit
organic growth, with a balanced contribution from RIG and
pricing.
Sales Sales Organic Net Foreign Reported
9M-2021 9M-2020 RIG Pricing growth M&A exchange growth
--------- --------- ---- ------- ------- ----- --------- --------
CHF 15.5 CHF 15.0
Zone EMENA bn bn 6.4% 0.8% 7.2% -2.8% -0.7% 3.6%
----------- --------- --------- ---- ------- ------- ----- --------- --------
Organic growth reached 7.2%, with strong RIG of 6.4% supported
by volume and mix. Pricing increased by 0.8%, turning positive in
Western Europe in the third quarter. Net divestitures reduced sales
by 2.8%, largely related to the divestiture of the Herta
charcuterie business. Foreign exchange negatively impacted sales by
0.7%. Reported sales in Zone EMENA increased by 3.6% to CHF 15.5
billion.
Zone EMENA reported high single-digit organic growth, based on
product innovation and continued strong momentum in e-commerce and
specialist channels. All markets posted positive growth, with
strong sales developments led by Russia, Turkey, the United Kingdom
and Italy. The Zone continued to see broad-based market share
gains, particularly for pet food, coffee and plant-based
products.
By product category, Purina PetCare posted double-digit growth
driven by premium brands Felix, Gourmet and Purina Pro Plan, as
well as veterinary products. Tails.com continued its geographic
expansion, with more than 250 000 monthly subscribers across nine
markets. Sales in coffee grew by almost 10%, supported by strong
momentum for Nescafé and Starbucks at-home products with continued
innovation across all coffee brands. Nestlé Professional reported
strong double-digit growth, helped by further recovery in
out-of-home channels. Water posted mid single-digit growth, led by
S.Pellegrino. Sales in confectionery grew at a mid single-digit
rate, based on improved demand for impulse and gifting products.
Culinary saw low single-digit growth. Strong demand for Garden
Gourmet and Mindful Chef was partially offset by slightly negative
growth in Maggi and pizza following elevated demand in 2020. The
recent launch of Wunda, the high-protein pea-based milk
alternative, resonated strongly with consumers. Infant Nutrition
posted slightly negative growth due to lower birth rates in the
context of the pandemic, but saw high single-digit growth in the
third quarter with continued market share gains.
Zone Asia, Oceania and sub-Saharan Africa (AOA)
-- 4.1% organic growth: 3.9% RIG; 0.2% pricing.
-- China posted low single-digit organic growth, based on
positive RIG and slightly negative pricing.
-- South-East Asia saw slightly negative organic growth, with negative RIG and pricing.
-- South Asia reported double-digit organic growth, with strong RIG and positive pricing.
-- Sub-Saharan Africa recorded double-digit organic growth, led
by strong RIG with positive pricing.
-- Japan, South Korea and Oceania saw mid single-digit organic
growth. Strong RIG was partially offset by negative pricing.
Sales Sales Organic Net Foreign Reported
9M-2021 9M-2020 RIG Pricing growth M&A Exchange Growth
--------- --------- ---- ------- ------- ----- --------- --------
CHF 15.2 CHF 15.3
Zone AOA bn bn 3.9% 0.2% 4.1% -4.1% -0.7% -0.6%
--------- --------- --------- ---- ------- ------- ----- --------- --------
Organic growth was 4.1%, with RIG of 3.9% and pricing of 0.2%.
Net divestitures had a negative impact of 4.1%, largely related to
the divestment of the Yinlu peanut milk and canned rice porridge
businesses in China. Foreign exchange reduced sales by 0.7%.
Reported sales in Zone AOA decreased by 0.6% to CHF 15.2
billion.
Zone AOA reported mid single-digit organic growth in a difficult
economic environment with regional lockdowns. In the third quarter,
growth turned slightly negative, reflecting a sales decline in
Infant Nutrition in China and a high base of comparison in 2020.
Most categories gained market share, led by coffee, culinary and
pet food.
China saw low single-digit growth, as strong sales developments
in most categories were partially offset by a sales decrease in
Infant Nutrition. The largest growth contributor was Nestlé
Professional, with sales exceeding 2019 levels. Coffee, culinary,
dairy and Purina PetCare all grew at strong double-digit rates,
supported by new digitally-driven product launches. Infant
Nutrition posted a sales decline. Turnaround initiatives continue
to progress, with further actions being implemented.
South-East Asia saw slightly negative growth in a difficult
economic environment with movement restrictions. The Philippines
saw a sales decline, also impacted by a high base of comparison in
2020. Indochina posted low single-digit growth, with a sales
decrease in on-the-go products and out-of-home channels. Sales in
Malaysia grew at a high single-digit rate.
South Asia recorded double-digit growth, supported by strong
e-commerce momentum and distribution expansion in rural areas.
Growth was broad-based across most categories, led by Maggi, KitKat
and Nescafé.
Sub-Saharan Africa recorded double-digit growth, based on strong
sales developments for Milo, Maggi and Nescafé led by affordable
offerings.
Japan posted high single-digit growth, led by Nescafé, Purina
PetCare and KitKat. Sales in South Korea grew at a strong
double-digit rate, driven by coffee. Oceania reported positive
growth, with market share gains and robust demand for KitKat,
Purina PetCare and Maggi.
By product category, the key growth drivers were culinary,
coffee and Nestlé Professional. Sales in confectionery and ice
cream grew at a high single-digit rate, with good sales momentum in
Malaysia. Dairy reported mid single-digit growth, led by strong
demand for fortified milks. Infant Nutrition saw a sales decline,
with growth turning positive outside of China in the third
quarter.
Nespresso
-- 11.0% organic growth: 10.4% RIG; 0.6% pricing.
Sales Sales Organic Net Foreign Reported
9M-2021 9M-2020 RIG Pricing growth M&A exchange growth
--------- --------- ----- ------- ------- ----- --------- --------
CHF 4.7 CHF 4.2
Nespresso bn bn 10.4% 0.6% 11.0% -0.1% 0.4% 11.3%
---------- --------- --------- ----- ------- ------- ----- --------- --------
Organic growth reached 11.0%, based on strong RIG of 10.4% and
pricing of 0.6%. Foreign exchange positively impacted sales by
0.4%. Reported sales in Nespresso increased by 11.3% to CHF 4.7
billion.
Nespresso posted double-digit growth, moderating to a mid
single-digit rate in the third quarter due to a high base of
comparison in 2020. The Vertuo system continued to see strong
growth, with the Original system also contributing positively.
Increased consumer adoption and innovation supported growth.
Nespresso expanded its coffee offerings across the Vertuo system,
including Peru Organic, and added Novecento and Millenio to the
Italian Heritage range for the Original System. The Nespresso x
Chiara Ferragni summer collection and social media campaign
resonated strongly with consumers.
By channel, boutiques and out-of-home channels saw a further
recovery, with a continued positive sales development in
e-commerce.
By geography, the Americas and AOA posted double-digit growth.
EMENA saw high single-digit growth.
Overall Nespresso gained market share, with contributions from
most markets.
Nestlé Health Science
-- 14.3% organic growth: 14.1% RIG; 0.1% pricing.
Sales Sales Organic Net Foreign Reported
9M-2021 9M-2020 RIG Pricing growth M&A exchange growth
--------- --------- ----- ------- ------- ----- --------- --------
Nestlé CHF 3.2 CHF 2.4
Health Science bn bn 14.1% 0.1% 14.3% 22.4% -2.8% 33.8%
---------------- --------- --------- ----- ------- ------- ----- --------- --------
Organic growth was 14.3%, with strong RIG of 14.1% and 0.1%
pricing. Net acquisitions increased sales by 22.4%, largely related
to the acquisitions of the core brands of The Bountiful Company,
Vital Proteins, Zenpep and Aimmune. Foreign exchange negatively
impacted sales by 2.8%. Reported sales in Nestlé Health Science
increased by 33.8% to CHF 3.2 billion.
Nestlé Health Science posted double-digit organic growth,
building on a strong sales development in 2020. Vitamins, minerals
and supplements that support health and the immune system continued
to see strong demand with broad-based market share gains across
channels and markets. Growth was supported by e-commerce momentum,
new product launches, geographic expansion and strong execution in
the supply chain.
Consumer care posted double-digit growth, with strong
contributions from Vital Proteins, Garden of Life, Persona and
healthy-aging products such as Boost and Meritene. The
newly-acquired core brands of The Bountiful Company, in particular
Nature's Bounty and Solgar, posted strong double-digit growth. Nuun
functional hydration products also grew at a strong double-digit
rate.
Medical Nutrition reported mid single-digit growth, with robust
demand for Compleat, a comprehensive nutritional tube-feeding
formula, and pediatric care products, such as Althéra, Alfaré and
Alfamino.
By geography, the Americas, EMENA and AOA all posted
double-digit growth.
Business as a force for good: supporting a just transition to
regenerative food systems
Nestlé is a signatory of the UN Business Ambition for 1.5degC
pledge and was one of the first companies to share a detailed,
time-bound climate plan in December 2020. The company is taking
action to halve its emissions by 2030 and achieve net zero by 2050.
Agriculture plays a critical role in achieving these climate
targets as two thirds of Nestlé's greenhouse gas emissions stem
from the production of food ingredients. In September 2021, Nestlé
announced that it will support and accelerate the transition to
regenerative food systems - one that aims to protect and restore
the environment, improve the livelihoods of farmers and enhance the
well-being of farming communities.
Together with external partners, from farming communities,
academia, civil societies and government, Nestlé is piloting trials
with more than 50 reference farms globally. The learnings from
these trials will be adapted locally and scaled up.
Regeneration is fundamental to creating more resilient food
systems. Regenerative farming practices aim to restore soil health,
renew water cycles, increase biodiversity, and integrate livestock.
These practices can also sequester carbon, which will contribute to
achieving Nestlé's ambitious climate targets .
The transition to regenerative food systems will only succeed if
it is socially and economically viable for all, which is why Nestlé
is putting farmers at the center of its efforts. The company will
offer investment support to mitigate initial risks and pay premiums
for raw materials produced using regenerative agriculture. This
will reward farmers not only for the quantity and quality of
ingredients, but also for the environmental benefits.
For technical assistance, Nestlé's vast network of experts and
agronomists will deploy state-of-the art science to help farmers
adopt regenerative practices. The company will also offer
agricultural training and help farmers exchange information and
best practices that can be adapted locally.
Nestlé expects to invest CHF 1.2 billion over the next five
years to support the adoption of regenerative farming practices by
its network of more than 500 000 farmers and 150 000 suppliers.
Outlook
Full-year guidance for 2021 updated: we expect full-year organic
sales growth between 6% and 7%. The underlying trading operating
profit margin is expected around 17.5%, reflecting initial time
delays between input cost inflation and pricing, as well as the
one-off integration costs related to the acquisition of The
Bountiful Company's core brands. Beyond 2021, our mid-term outlook
for continued moderate margin improvement remains unchanged.
Underlying earnings per share in constant currency and capital
efficiency are expected to increase this year.
Contacts:
Media Christoph Meier Tel.: +41 21 924 22 00
mediarelations@nestle.com
Investors Luca Borlini Tel.: +41 21 924 3509 ir@nestle.com
Annex
Nine-month sales overview by operating segment
Nestlé
Total .Health
Group Zone AMS Zone EMENA Zone AOA Nespresso Science Other Businesses
------ -------- ---------- -------- ------------ -------------- ----------------
Sales 9M-2021
(CHF m) 63 294 24 589 15 492 15 172 4 654 3 237 150
Sales 9M-2020
(CHF m)* 61 912 24 991 14 952 15 251 4 180 2 421 117
----------------- ------ -------- ---------- -------- ------------ -------------- ----------------
Real internal
growth (RIG) 6.0% 5.2% 6.4% 3.9% 10.4% 14.1% 25.5%
Pricing 1.6% 3.2% 0.8% 0.2% 0.6% 0.1% 2.9%
Organic growth 7.6% 8.4% 7.2% 4.1% 11.0% 14.3% 28.5%
Net M&A -3.3% -6.0% -2.8% -4.1% * 0.1% 22.4% 0.0%
Foreign exchange -2.0% -3.9% -0.7% -0.7% 0.4% -2.8% -2.4%
Reported sales
growth 2.2% -1.5% 3.6% -0.6% 11.3% 33.8% 26.0%
----------------- ------ -------- ---------- -------- ------------ -------------- ----------------
Nine-month sales overview by product
Milk Prepared
Powdered products Nutrition dishes
Total & liquid & ice & Health & cooking
Group beverages Water cream Science aids Confec-tionery PetCare
------ ---------- ----- --------- --------- ---------- -------------- -------
Sales 9M-2021
(CHF m) 63 294 17 499 3 230 7 837 9 363 8 873 5 132 11 360
Sales 9M-2020
(CHF m) 61 912 16 219 5 020 8 114 9 004 8 460 4 713 10 382
--------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
Real internal
growth (RIG) 6.0% 8.6% 1.9% 3.2% 0.1% 5.9% 7.9% 9.9%
Pricing 1.6% 0.7% 2.4% 3.2% 0.6% 1.6% 1.5% 2.3%
Organic growth 7.6% 9.3% 4.3% 6.4% 0.8% 7.5% 9.5% 12.1%
--------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
* 2020 figures restated following the disclosure of Nestlé
Health Science and Nespresso as standalone segments from 2021
onwards (previously combined and presented in Other
Businesses).
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