TIDM76TQ
RNS Number : 0545U
Nestle SA
28 July 2022
Nestlé press release
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Report published today
2022 Half-Year Report:
https://www.nestle.com/sites/default/files/2022-07/2022-half-year-report-en.pdf
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.......................................
[Ad hoc announcement pursuant to Art. 53 LR]
Vevey/Switzerland, July 28, 2022
Nestlé reports half-year results for 2022
-- Organic growth reached 8.1%, with real internal growth (RIG)
of 1.7% and pricing of 6.5%. Growth was broad-based across most
geographies and categories, with increased pricing and resilient
RIG.
-- Total reported sales increased by 9.2% to CHF 45.6 billion
(6M-2021: CHF 41.8 billion). Net acquisitions had a positive impact
of 1.0%. Foreign exchange increased sales by 0.1%.
-- The underlying trading operating profit (UTOP) margin was
16.9%, decreasing by 50 basis points. The trading operating profit
(TOP) margin decreased by 200 basis points to 14.7%, mainly due to
one-off items.
-- Underlying earnings per share increased by 8.1% in constant
currency and increased by 7.3% on a reported basis to CHF 2.33.
Earnings per share decreased by 9.5% to CHF 1.92 on a reported
basis.
-- Free cash flow was CHF 1.5 billion, as working capital and
capital expenditure increased temporarily in the context of supply
chain constraints and high volume demand.
-- Continued portfolio management progress. In the second
quarter, Nestlé Health Science agreed to acquire Puravida in Brazil
and The Better Health Company in New Zealand.
-- Full-year 2022 outlook updated : we expect organic sales
growth between 7% and 8%. The underlying trading operating profit
margin is now expected around 17.0%. Underlying earnings per share
in constant currency and capital efficiency are expected to
increase.
Mark Schneider, Nestlé CEO, commented: "In the first half of the
year, we delivered strong organic growth and a significant increase
in underlying earnings per share. Our local teams implemented price
increases in a responsible manner. Volume and product mix were
resilient, based on our strong brands, differentiated offerings and
leading market positions. We limited the impact of unprecedented
inflationary pressures and supply chain constraints on our margin
development through disciplined cost control and operational
efficiencies. At the same time, investments behind capital
expenditure, digitalization and sustainability increased
significantly.
We are focused on creating shared value over both the short and
long term. Growing food insecurity around the world and heightened
climate concerns, following an increase in unusual weather
patterns, underlines the importance of this strategic direction.
Good for you and good for the planet are the two key strategic
pillars that our company pursues in an unwavering manner, even in
the face of significant short-term challenges."
Zone Zone Zone Nespresso Nestlé
Total North Zone Zone Latin Greater .Health Other
Group America Europe AOA America China Science Businesses
------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
Sales 6M-2022
(CHF m) 45 580 12 138 9 283 9 335 5 659 2 677 3 190 3 167 131
Sales 6M-2021
(CHF m)* 41 755 11 364 9 022 8 878 4 798 2 524 3 158 1 914 97
----------------- ------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
Real internal
growth (RIG)** 1.7% -0.2% 2.1% 2.1% 4.2% 1.6% * 1.6% 4.4% 31.1%
Pricing** 6.5% 9.8% 4.9% 6.1% 9.4% 0.7% 4.2% 2.2% 2.7%
Organic growth** 8.1% 9.6% 7.1% 8.2% 13.6% 2.3% 2.6% 6.6% 33.8%
Net M&A** 1.0% -7.1% 1.6% -0.1% 0.1% 0.0% 0.1% 57.2% 0.0%
Foreign exchange 0.1% 4.3% -5.7% -3.0% 4.3% 3.8% * 1.7% 1.7% 0.3%
Reported sales
growth 9.2% 6.8% 2.9% 5.2% 17.9% 6.0% 1.0% 65.5% 34.1%
----------------- ------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
6M-2022
Underlying
TOP Margin 16.9% 18.8% 17.3% 23.5% 21.1% 15.0% 24.3% 13.7% -3.6%
6M-2021
Underlying
TOP Margin* 17.4% 18.5% 18.7% 24.4% 21.0% 14.0% 26.0% 13.5% 7.6%
----------------- ------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
* 2021 figures restated following the creation of Zone North
America (NA) and Zone Greater China (GC)
as of January 1, 2022. Zone AOA includes Middle East and North
Africa (MENA) previously included in Zone EMENA
**RIG, pricing and organic growth figures exclude the Russia
region, with a corresponding impact on the M&A and foreign
exchange lines
Group sales
Organic growth was 8.1%. Pricing increased to 6.5% to reflect
significant and unprecedented cost inflation. RIG was resilient at
1.7%, given the high base of comparison in 2021 and supply chain
constraints.
Organic growth was 6.9% in developed markets, with strong
pricing and positive RIG. Organic growth in emerging markets was
10.0%, with increased pricing and solid RIG.
By product category, Purina PetCare was the largest contributor
to organic growth, with continued momentum for science-based and
premium brands Purina Pro Plan, Purina ONE and Fancy Feast as well
as veterinary products. Sales in coffee grew at a high single-digit
rate, with broad-based growth across brands and geographies,
supported by a strong recovery of out-of-home channels.
Confectionery reported double-digit growth, reflecting particular
strength for KitKat and seasonal products. Growth in Infant
Nutrition reached a high single-digit rate, with a return to
positive growth in China and improving market share trends. Water
posted double-digit growth, led by premium brands and a further
recovery of out-of-home channels. Nestlé Health Science recorded
high single-digit growth, driven by Medical Nutrition and
healthy-aging products. Dairy reported mid single-digit growth,
with strong sales developments for coffee creamers and affordable
nutrition offerings. Prepared dishes and cooking aids posted low
single-digit growth, following a high base of comparison in 2021,
with continued strong demand for Maggi. Sales in vegetarian and
plant-based food continued to grow at a double-digit rate, led by
Garden Gourmet.
By channel, organic growth in retail sales remained robust at
6.7%. Within retail, e-commerce sales grew by 8.3%, building on
growth of 19.2% in the first half of 2021. Organic growth in
out-of-home channels reached 29.6%, with sales exceeding 2019
levels.
Net acquisitions increased sales by 1.0%, largely related to the
acquisitions of the core brands of The Bountiful Company as well as
Orgain. The impact on sales from foreign exchange was positive at
0.1%. Total reported sales increased by 9.2% to CHF 45.6
billion.
Underlying Trading Operating Profit
Underlying trading operating profit increased by 6.0% to CHF 7.7
billion. The underlying trading operating profit margin decreased
by 50 basis points to 16.9% in constant currency and on a reported
basis, reflecting time delays between cost inflation and pricing
actions.
Gross margin decreased by 280 basis points to 46.0%, following
significant broad-based inflation for commodity, packaging, freight
and energy costs. Pricing, growth leverage and efficiencies helped
to significantly offset the impact of cost inflation.
Distribution costs as a percentage of sales decreased by 10
basis points, mainly as a result of the divestment of the Nestlé
Waters North America brands.
Marketing and administration expenses as a percentage of sales
decreased by 210 basis points, supported by sales growth leverage
and disciplined cost control. Marketing spend decreased
temporarily, following a lower level of promotion and marketing
activities in the context of supply chain constraints.
Restructuring expenses and net other trading items were CHF 1.0
billion, reflecting higher impairments. As a result, trading
operating profit decreased by 4.3% to CHF 6.7 billion, and the
trading operating profit margin decreased by 200 basis points on a
reported basis to 14.7%.
Net Financial Expenses and Income Tax
Net financial expenses increased by 4.5% to CHF 434 million,
reflecting higher average net debt.
The Group reported tax rate increased by 680 basis points to
24.2% as a result of one-off items. The underlying tax rate
increased by 70 basis points to 20.9%, mainly due to the geographic
and business mix.
Net Profit and Earnings Per Share
Net profit decreased by 11.7% to CHF 5.2 billion. Net profit
margin decreased by 270 basis points to 11.5% as a result of
one-off items, including higher impairments and taxes. As a
consequence, earnings per share decreased by 9.5% to CHF 1.92 on a
reported basis.
Underlying earnings per share increased by 8.1% in constant
currency and by 7.3% on a reported basis to CHF 2.33. The increase
was mainly the result of strong organic growth. Nestlé's share
buyback program contributed 1.7% to the underlying earnings per
share increase, net of finance costs.
Cash Flow
Cash generated from operations decreased from CHF 5.8 billion to
CHF 5.7 billion mainly due to an increase in working capital. The
Group increased its inventory levels temporarily, due to
significant supply chain constraints. Excluding the increase in
working capital, cash generated from operations increased from CHF
7.9 billion to CHF 8.8 billion, driven by strong organic growth.
Free cash flow decreased from CHF 2.8 billion to CHF 1.5 billion
reflecting higher taxes and a temporary increase in capital
expenditure to meet strong volume demand, particularly for Purina
PetCare and coffee.
Share Buyback Program
In the first half, the Group repurchased CHF 6.9 billion of
Nestlé shares as part of the three-year CHF 20 billion share
buyback program, which began in January 2022.
Net Debt
Net debt increased to CHF 48.5 billion as at June 30, 2022,
compared to CHF 32.9 billion at December 31, 2021. The increase
largely reflected the dividend payment of CHF 7.6 billion and share
buybacks of CHF 6.7 billion.
Portfolio Management
On April 1, 2022, Nestlé Health Science completed the
acquisition of a majority stake in Orgain, a leader in plant-based
nutrition. Orgain complements Nestlé Health Science's existing
portfolio of nutrition products that support healthier lives. The
deal is expected to be slightly accretive to Nestlé's organic
growth, while slightly dilutive to the Group's underlying trading
operating profit margin in 2022. The agreement includes the option
for Nestlé Health Science to fully acquire Orgain in 2024.
On May 23, 2022, Nestlé Health Science agreed to acquire
Puravida, a premium Brazilian nutrition and health lifestyle brand.
The acquisition will enable Nestlé Health Science to expand its
consumer health portfolio in Latin America.
On June 25, 2022, Nestlé Health Science agreed to acquire The
Better Health Company. The acquisition includes the GO Healthy
brand, New Zealand's leading supplement brand, and New Zealand
Health Manufacturing, an Auckland-based manufacturing facility for
vitamins, minerals and supplements. The acquisition will expand
Nestlé Health Science's portfolio of vitamins, minerals and
supplements in AOA.
Zone North America
-- 9.6% organic growth: -0.2% RIG; 9.8% pricing.
-- The underlying trading operating profit margin increased by
30 basis points to 18.8% as a result of the Nestlé Waters North
America brands divestment.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021
--------- --------- ----- ------- ------- -------- -------- -------- ---------
Zone North CHF 12.1 CHF 11.4 CHF 2.3 CHF 2.1
America bn bn -0.2% 9.8% 9.6% bn bn 18.8% 18.5%
----------- --------- --------- ----- ------- ------- -------- -------- -------- ---------
Organic growth was 9.6%, with increased pricing of 9.8%. RIG was
-0.2%, following a high base of comparison in 2021 and supply chain
constraints. Net divestitures reduced sales by 7.1%, mainly due to
the divestment of the Nestlé Waters North America brands. Foreign
exchange had a positive impact of 4.3%. Reported sales in Zone
North America increased by 6.8% to CHF 12.1 billion.
Organic growth in Zone North America was close to a double-digit
rate, led by increased pricing, strong momentum in e-commerce and a
further recovery of out-of-home channels. The Zone saw continued
broad-based market share gains, particularly in pet food, coffee
and creamers as well as premium water.
By product category, Purina PetCare was the largest growth
contributor with strong momentum across channels and brands. Purina
Pro Plan, including veterinary products, Fancy Feast and Purina ONE
all posted strong double-digit growth, helped by continued
innovation such as Purina ONE Microbiome Balance. Sales in Nestlé
Professional and Starbucks out-of-home products grew at a strong
double-digit rate. The beverages category, including Starbucks
at-home products, Coffee mate and Nescafé, saw mid single-digit
growth, following a high base of comparison in 2021. Sales in
premium water grew at a double-digit rate, with strong momentum for
S.Pellegrino, Perrier and Essentia. Infant formula recorded strong
growth, following supply shortages in the market. Nestlé helped
address the needs of parents and caregivers by importing essential
infant formula products to the United States. Baby food also posted
strong growth, fueled by new launches for Gerber in healthy
snacking and high demand for organic plant-based offerings. Frozen
food reported low single-digit growth, impacted by a high base of
comparison in 2021 for frozen meals. DiGiorno and Hot Pockets saw
solid demand, and growth in Stouffer's turned positive in the
second quarter. Ready-to-drink Nesquik in the U.S. and
confectionery in Canada saw double-digit growth, supported by new
product launches.
The Zone's underlying trading operating profit margin increased
by 30 basis points. Excluding the impact of the Nestlé Waters North
America brands divestment, the Zone's margin development was
negative as pricing did not fully offset significant cost
inflation.
Zone Europe
-- 7.1% organic growth: 2.1% RIG; 4.9% pricing.
-- The underlying trading operating profit margin decreased by 140 basis points to 17.3%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021
--------- --------- ---- ------- ------- -------- -------- -------- ---------
CHF 9.3 CHF 9.0 CHF 1.6 CHF 1.7
Zone Europe* bn bn 2.1% 4.9% 7.1% bn bn 17.3% 18.7%
------------- --------- --------- ---- ------- ------- -------- -------- -------- ---------
*RIG, pricing and organic growth figures exclude the Russia
region, with a corresponding impact on the M&A and foreign
exchange lines
Organic growth was 7.1%. Pricing reached 4.9%. RIG remained
solid at 2.1%, despite a high base of comparison in 2021 and supply
chain constraints. Foreign exchange negatively impacted sales by
5.7%. Reported sales in Zone Europe increased by 2.9% to CHF 9.3
billion.
Zone Europe reported high single-digit organic growth,
reflecting increased pricing, a further recovery of out-of-home
channels and innovation. The Zone continued to see market share
gains, particularly in pet food, coffee and Infant Nutrition.
By product category, the key growth driver was Purina PetCare,
fueled by premium brands Gourmet, Purina ONE and Purina Pro Plan,
including veterinary products. Growth was broad-based across
channels, particularly in e-commerce and pet specialty stores.
Gourmet Revelations, the recently launched super-premium cat food,
saw strong demand. Sales in Nestlé Professional grew at a
double-digit rate, led by beverages. Water posted double-digit
growth, driven by S.Pellegrino, Perrier and Acqua Panna. Sales in
Infant Nutrition grew at a double-digit rate, based on strong
momentum for human milk oligosaccharides (HMOs) products.
Confectionery reported mid single-digit growth, with strong demand
for KitKat across most geographies and Baci in Italy. Coffee posted
low single-digit growth, led by Nescafé soluble coffee. Starbucks
by Nespresso and other Nespresso-compatible capsules saw further
market share gains in the retail segment. Culinary reported a sales
decrease, impacted by negative growth in pizza and noodles. Garden
Gourmet plant-based products continued to see strong momentum,
reflecting new product launches.
The Zone's underlying trading operating profit margin decreased
by 140 basis points. Significant cost inflation more than offset
pricing, growth leverage and disciplined cost control.
Zone Asia, Oceania and Africa (AOA)
-- 8.2% organic growth: 2.1% RIG; 6.1% pricing.
-- The underlying trading operating profit margin decreased by 90 basis points to 23.5%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021
--------- --------- ---- ------- ------- -------- -------- -------- ---------
CHF 9.3 CHF 8.9 CHF 2.2 CHF 2.2
Zone AOA bn bn 2.1% 6.1% 8.2% bn bn 23.5% 24.4%
--------- --------- --------- ---- ------- ------- -------- -------- -------- ---------
Organic growth reached 8.2%, with RIG of 2.1%. Pricing increased
to 6.1%, with broad-based contributions from all geographies and
categories. Foreign exchange reduced sales by 3.0%. Reported sales
in Zone AOA increased by 5.2% to CHF 9.3 billion.
Organic growth in Zone AOA accelerated to a high single-digit
rate, driven by increased pricing, a further recovery of
out-of-home channels and strong supply chain execution. The Zone
saw market share gains across categories, particularly in culinary,
portioned and ready-to-drink coffee as well as dairy.
South-East Asia posted mid single-digit growth, with positive
contributions from most geographies, led by Malaysia. Nescafé,
particularly ready-to-drink offerings, as well as Maggi and KitKat
saw strong demand. South Asia recorded broad-based double-digit
growth, due to distribution expansion and increased brand equity,
particularly for Maggi, KitKat and Nescafé. Growth in Middle East
and Africa was close to a double-digit rate, based on strong
momentum for affordable offerings in Central and West Africa. Japan
reported mid single-digit growth, based on solid demand for coffee
and Purina PetCare. Sales in South Korea grew at a double-digit
rate, driven by Starbucks products. Oceania reported high
single-digit growth, fueled by new product launches, including
KitKat Dark Tablet and the relaunch of Nescafé coffee mixes.
By product category, culinary was the largest growth
contributor, led by Maggi. Coffee posted high single-digit growth,
with continued strong demand for Nescafé and Starbucks products.
Sales in Nestlé Professional grew at a double-digit rate. Infant
Nutrition reported mid single-digit growth, with a broad-based
recovery in the second quarter. Sales in cocoa and malt beverages
as well as confectionery saw double-digit growth, based on strong
demand for Milo and KitKat. Purina PetCare recorded high
single-digit growth, with continued momentum for Purina ONE, Purina
Pro Plan and Felix.
The Zone's underlying trading operating profit margin decreased
by 90 basis points. Significant cost inflation more than offset
pricing, growth leverage and disciplined cost control.
Zone Latin America
-- 13.6% organic growth: 4.2% RIG; 9.4% pricing.
-- The underlying trading operating profit margin increased by 10 basis points to 21.1%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021
--------- --------- ---- ------- ------- -------- -------- -------- ---------
Zone Latin CHF 5.7 CHF 4.8 CHF 1.2 CHF 1.0
America bn bn 4.2% 9.4% 13.6% bn bn 21.1% 21.0%
----------- --------- --------- ---- ------- ------- -------- -------- -------- ---------
Organic growth was 13.6%, with increased pricing of 9.4%. RIG
remained strong at 4.2%, following high single-digit growth in
2021. Foreign exchange had a positive impact of 4.3%. Reported
sales in Zone Latin America increased by 17.9% to CHF 5.7
billion.
Zone Latin America maintained double-digit organic growth, with
broad-based contributions across geographies and categories. Growth
was supported by increased pricing, a further recovery of
out-of-home channels and sustained momentum for retail sales. The
Zone saw market share gains in Infant Nutrition, pet food and
coffee creamers.
Sales in Brazil grew at a double-digit rate, with strong
momentum for confectionery, cocoa and malt beverages as well as
Infant Nutrition. Mexico reported high single-digit growth, with
strong sales developments for Purina PetCare, Nescafé and
Carnation. Sales in Chile grew at a double-digit rate, led by
confectionery, Purina PetCare and coffee. Colombia and the Plata
Region also saw strong growth, supported by volumes.
By product category, confectionery was the largest growth
contributor, reflecting strong demand for KitKat and key local
brands, particularly Garoto in Brazil. Sales in Purina PetCare grew
at a double-digit rate, fueled by Dog Chow, Cat Chow and Purina Pro
Plan. Distribution of Purina ONE continued to expand across the
Zone. Coffee reported broad-based double-digit growth, supported by
Nescafé soluble coffee, Nescafé Dolce Gusto and the further
roll-out of Starbucks products. Sales in Nestlé Professional grew
at a strong double-digit rate, with particular strength for
beverages. Infant Nutrition saw high single-digit growth, based on
solid momentum for Nido and NAN. Dairy posted mid single-digit
growth, led by fortified milks and dairy culinary solutions.
The Zone's underlying trading operating profit margin increased
by 10 basis points. Pricing, growth leverage and disciplined cost
control more than offset cost inflation.
Zone Greater China
-- 2.3% organic growth: 1.6% RIG; 0.7% pricing.
-- The underlying trading operating profit margin increased by 100 basis points to 15.0%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021
--------- --------- ---- ------- ------- -------- -------- -------- ---------
Zone Greater CHF 2.7 CHF 2.5 CHF 0.4 CHF 0.4
China bn bn 1.6% 0.7% 2.3% bn bn 15.0% 14.0%
------------- --------- --------- ---- ------- ------- -------- -------- -------- ---------
Organic growth was 2.3%, with RIG of 1.6%. Pricing reached 0.7%,
turning positive in the second quarter. Foreign exchange had a
positive impact of 3.8%. Reported sales in Zone Greater China
increased by 6.0% to CHF 2.7 billion.
Zone Greater China reported low single-digit organic growth,
impacted by COVID-19-related movement restrictions. Growth was
supported by robust demand in e-commerce channels and continued
innovation.
By product category, coffee posted mid single-digit growth.
Starbucks products and Nescafé soluble coffee saw continued
momentum. Culinary reported mid single-digit growth, helped by
increased distribution and new product launches. Confectionery
recorded mid single-digit growth, led by strong sales development
for Shark wafer chocolate and solid demand for Hsu Fu Chi. Purina
PetCare posted high single-digit growth, with particular strength
for Mon Petit, Fancy Feast and recently launched DentaLife. Growth
in Infant Nutrition turned positive, with improving market share
trends. The business saw a strong recovery in the second quarter,
particularly for NAN and illuma. Nestlé Professional reported a
sales decrease, reflecting restrictions on out-of-home
channels.
The Zone's underlying trading operating profit margin increased
by 100 basis points. Favorable mix and disciplined cost control
more than offset cost inflation.
Nespresso
-- 2.6% organic growth: -1.6% RIG; 4.2% pricing.
-- The underlying trading operating profit margin decreased by 170 basis points to 24.3%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021
--------- --------- ----- ------- ------- -------- -------- -------- ---------
CHF 3.2 CHF 3.2 CHF 0.8 CHF 0.8
Nespresso* bn bn -1.6% 4.2% 2.6% bn bn 24.3% 26.0%
----------- --------- --------- ----- ------- ------- -------- -------- -------- ---------
*RIG, pricing and organic growth figures exclude the Russia
region, with a corresponding impact on the M&A and foreign
exchange lines
Organic growth was 2.6%, with increased pricing of 4.2%. RIG was
-1.6% following strong double-digit growth in 2021 during the
pandemic. Foreign exchange negatively impacted sales by 1.7%.
Reported sales in Nespresso increased by 1.0% to CHF 3.2
billion.
Nespresso reported low single-digit organic growth, following
strong double-digit growth in 2021. Out-of-home channels saw
further recovery, with strong demand for the Momento system. The
Vertuo system saw sustained momentum and is now sold in 44
countries. Innovation continued to resonate with consumers with new
product launches, including the summer collection of Barista
Creations Liminha over Ice and Exotic Liminha over Ice.
By geography, North America posted double-digit growth with
continued market share gains. Europe reported a sales decrease,
following a high base of comparison in 2021. Other regions combined
recorded high single-digit growth.
In the second quarter, Nespresso obtained global certification
as a B Corp, reflecting the business's ongoing commitment to
sustainability and transparency.
The underlying trading operating profit margin of Nespresso
decreased by 170 basis points, impacted by investments in the
roll-out of the Vertuo system and cost inflation.
Nestlé Health Science
-- 6.6% organic growth: 4.4% RIG; 2.2% pricing.
-- The underlying trading operating profit margin increased by 20 basis points to 13.7%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021
--------- --------- ---- ------- ------- -------- -------- -------- ---------
Nestlé CHF 3.2 CHF 1.9 CHF 0.4 CHF 0.3
Health Science* bn bn 4.4% 2.2% 6.6% bn bn 13.7% 13.5%
----------------- --------- --------- ---- ------- ------- -------- -------- -------- ---------
*RIG, pricing and organic growth figures exclude the Russia
region, with a corresponding impact on the M&A and foreign
exchange lines
Organic growth was 6.6%, with robust RIG of 4.4% and increased
pricing of 2.2%. Net acquisitions increased sales by 57.2%, largely
related to the acquisition of the core brands of The Bountiful
Company as well as Orgain. Foreign exchange positively impacted
sales by 1.7%. Reported sales in Nestlé Health Science increased by
65.5% to CHF 3.2 billion.
Nestlé Health Science posted high single-digit organic growth,
building on strong sales developments in 2020 and 2021. Growth was
supported by innovation, geographic expansion and market share
gains.
Consumer Care posted mid single-digit growth. Healthy-aging
products grew at a double-digit rate, supported by Boost and Nutren
. Vitamins, minerals and supplements reported low single-digit
growth, following a high base of comparison and supply chain
constraints. Sales of Pure Encapsulations, a super-premium offering
recommended by healthcare professionals, grew at a double-digit
rate. Vital Proteins saw robust demand, helped by geographic
expansion. Orgain, the newly acquired plant-based nutrition
business, posted strong double-digit growth, based on innovation
and increased distribution.
Medical Nutrition reported double-digit growth, with strong
sales developments for pediatric products, Althéra, Alfaré and
Alfamino. Zenpep posted strong growth with market share gains.
Palforzia, the peanut allergy treatment, saw further patient
adoption.
By geography, sales in North America grew at a high single-digit
rate. Europe saw positive growth. Other regions combined posted
double-digit growth.
The underlying trading operating profit margin of Nestlé Health
Science increased by 20 basis points. Growth leverage and
acquisition synergies more than offset cost inflation and growth
investments.
Business as a force for good: Improving the lives of
lower-income consumers through affordable nutrition
Supply chain disruptions and inflationary pressures have been
exacerbated by the war in Ukraine and extreme weather events
related to climate change. People's purchasing power has been
reduced. In this context, offering affordable, nutritious food to
lower-income consumers is more important than ever.
Working to make nutritious food products affordable and
accessible is part of Nestlé's mission. The company focuses on four
areas:
-- Micronutrient deficiencies are widespread globally. Nestlé
helps tackle the issue through micronutrient fortification based on
local needs. In Pakistan, for example, one out of two children are
deficient in iron. The company recently launched BUNYAD IRON+, an
affordable dairy-based drink fortified with a new source of iron
that is more easily absorbed in the body. In the Central and West
Africa Region (CWAR), where iron deficiency is also widespread,
Nestlé fortifies Maggi bouillon with iron and iodine. These
products are used widely and regularly in the region to add flavor
to home-cooked meals. Last year, Nestlé sold 82 billion fortified
servings of affordable Maggi bouillon in CWAR alone. Nestlé also
addresses inadequacies in macronutrients, like fiber, healthy fats
and protein, through its products.
-- To increase the availability and accessibility of affordable
nutrition products, Nestlé aims to offer them at a price people can
afford on their daily wages. It's also about making products
available wherever consumers shop. In remote areas around the
world, Nestlé leverages different channels specific to local
markets to distribute its affordable nutrition products. The
traditional open markets in CWAR, where Maggi bouillon is sold, is
just one example.
-- Nestlé works on value chain optimization to keep costs low
and secure supply. It sources ingredients from local producers and
strives to minimize food waste. Nestlé Cerevita Instant Sour
Porridge, for instance, is an affordable nutritious solution for
consumers in southern Africa. It uses high-quality ingredients that
are locally and sustainably sourced. Production of the product
leverages existing roller drying and dry-mixing technologies. In
this way, Nestlé minimizes production costs and provides a porridge
that is adapted to local consumer taste preferences and nutritional
requirements.
-- Nestlé is expanding its nutrition education programs and
partnerships to help consumers. For example, its 'Live Strong with
Iron' campaign in CWAR promotes the awareness and consumption of
iron-rich foods. In Australia, Nestlé developed and produced the
first custom-made product for Foodbank, a food relief organization.
The Maggi Hearty One Pot Recipe Mix is used in combination with the
fresh ingredients Foodbank provides and has added flavor to one
million meals so far. The product is helping fight food insecurity
and minimizing food waste at the same time.
Outlook
Full-year 2022 outlook updated: we expect organic sales growth
between 7% and 8%. The underlying trading operating profit margin
is now expected around 17.0%. Underlying earnings per share in
constant currency and capital efficiency are expected to
increase.
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
Half-year sales and underlying trading operating profit (UTOP)
overview by operating segment
Zone Zone Zone Nestlé
Total North Zone Zone Latin Greater .Health Other
Group America Europe AOA America China Nespresso Science Businesses
------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
Sales 6M-2022
(CHF m) 45 580 12 138 9 283 9 335 5 659 2 677 3 190 3 167 131
Sales 6M-2021
(CHF m)* 41 755 11 364 9 022 8 878 4 798 2 524 3 158 1 914 97
----------------- ------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
Real internal
growth (RIG)** 1.7% -0.2% 2.1% 2.1% 4.2% 1.6% * 1.6% 4.4% 31.1%
Pricing** 6.5% 9.8% 4.9% 6.1% 9.4% 0.7% 4.2% 2.2% 2.7%
Organic growth** 8.1% 9.6% 7.1% 8.2% 13.6% 2.3% 2.6% 6.6% 33.8%
Net M&A** 1.0% -7.1% 1.6% -0.1% 0.1% 0.0% 0.1% 57.2% 0.0%
Foreign exchange 0.1% 4.3% -5.7% -3.0% 4.3% 3.8% * 1.7% 1.7% 0.3%
Reported sales
growth 9.2% 6.8% 2.9% 5.2% 17.9% 6.0% 1.0% 65.5% 34.1%
----------------- ------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
6M-2022
Underlying
TOP (CHF m) 7 683 2 284 1 606 2 198 1 196 400 777 435 -5
----------------- ------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
6M-2021
Underlying
TOP (CHF m)* 7 251 2 104 1 686 2 162 1 008 352 822 258 7
----------------- ------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
6M-2022
Underlying
TOP Margin 16.9% 18.8% 17.3% 23.5% 21.1% 15.0% 24.3% 13.7% -3.6%
6M-2021
Underlying
TOP Margin* 17.4% 18.5% 18.7% 24.4% 21.0% 14.0% 26.0% 13.5% 7.6%
----------------- ------ -------- ------- ----- ---------- ---------- ------------ -------------- -----------
* 2021 figures restated following the creation of Zone North
America (NA) and Zone Greater China (GC)
as of January 1, 2022. Zone AOA includes Middle East and North
Africa (MENA) previously included in Zone EMENA
**RIG, pricing and organic growth figures exclude the Russia
region, with a corresponding impact on the M&A and foreign
exchange lines
Half-year sales and underlying trading operating profit (UTOP)
overview by product
Milk Prepared
Powdered products Nutrition dishes
Total & liquid & ice & Health & cooking
Group beverages Water cream Science aids Confec-tionery PetCare
------ ---------- ----- --------- --------- ---------- -------------- -------
Sales 6M-2022
(CHF m) 45 580 12 335 1 792 5 443 7 689 6 137 3 595 8 589
Sales 6M-2021
(CHF m) 41 755 11 648 2 291 5 205 6 060 5 919 3 229 7 403
------------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
Real internal
growth (RIG)** 1.7% 1.3% 8.8% -3.3% 4.2% -5.0% 6.8% 5.1%
Pricing** 6.5% 6.2% 8.4% 6.8% 3.6% 7.9% 4.0% 8.8%
Organic growth** 8.1% 7.6% 17.2% 3.5% 7.8% 2.9% 10.8% 13.9%
------------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
6M-2022 Underlying
TOP (CHF m) 7 683 2 915 175 1 192 1 502 974 498 1 635
6M-2021 Underlying
TOP (CHF m) 7 251 2 905 204 1 309 1 079 962 372 1 568
------------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
6M-2022 Underlying
TOP Margin 16.9% 23.6% 9.7% 21.9% 19.5% 15.9% 13.8% 19.0%
------------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
6M-2021 Underlying
TOP Margin 17.4% 24.9% 8.9% 25.2% 17.8% 16.3% 11.5% 21.2%
------------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
**RIG, pricing and organic growth figures exclude the Russia
region, with a corresponding impact on the M&A and foreign
exchange lines
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END
IR RPMATMTJTMAT
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July 28, 2022 02:00 ET (06:00 GMT)
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