TIDM76TQ
RNS Number : 3590X
Nestle SA
25 April 2023
Nestlé Press Release
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.......................................
Vevey, April 25, 2023
Nestlé reports three-month sales for 2023
-- Total reported sales increased by 5.6% to CHF 23.5 billion
(3M-2022: CHF 22.2 billion). Foreign exchange decreased sales by
4.0%. Net acquisitions had a positive impact of 0.3%.
-- Organic growth reached 9.3%, with broad-based contributions
across geographies and categories. Pricing was 9.8%, reflecting
significant cost inflation. Real internal growth (RIG) was
-0.5%.
-- Full-year 2023 outlook confirmed : we expect organic sales
growth between 6% and 8% and underlying trading operating profit
margin between 17.0% and 17.5%. Underlying earnings per share in
constant currency is expected to increase between 6% and 10%.
Mark Schneider, Nestlé CEO, commented: "Nestlé delivered strong
organic growth in the first quarter, as our teams worked diligently
to protect volume and ensure resilient mix. Portfolio optimization
efforts and responsible pricing helped to offset the ongoing
pressures from two years of cost inflation.
We continued our portfolio management journey with the creation
of a joint venture dedicated to the frozen pizza business in
Europe. The new partnership provides the best platform to develop
the full potential of this business.
Following a strong start to the year, we confirm our full-year
2023 outlook and remain focused on creating value for all
stakeholders".
Zone Zone Zone Nestlé
Total North Zone Zone Latin Greater Health Other
Group America Europe AOA America China Science Nespresso Businesses
------ -------- ------- ----- ------------ ------------ ------------- ------------ -----------
Sales 3M-2023 23
(CHF m) 470 6 312 4 881 4 681 3 032 1 311 1 617 1 567 69
Sales 3M-2022 22
(CHF m) 238 5 800 4 633 4 633 2 697 1 361 1 449 1 602 63
-------------- ------ -------- ------- ----- ------------ ------------ ------------- ------------ -----------
Real internal
growth (RIG) -0.5% -0.8% -1.0% 1.3% * 0.6% * 0.8% * 2.2% * 1.1% 12.7%
Pricing 9.8% 12.4% 10.7% 9.1% 13.4% 3.9% 5.0% 4.0% 0.1%
Organic growth 9.3% 11.6% 9.7% 10.4% 12.8% 3.1% 2.8% 2.9% 12.8%
Net M&A 0.3% -2.3% 1.1% -0.1% 0.2% 0.0% 10.3% * 1.3% 0.0%
Foreign
exchange -4.0% -0.4% -5.4% -9.2% * 0.6% * 6.8% * 1.7% * 3.8% -2.3%
Reported sales
growth 5.6% 8.9% 5.4% 1.1% 12.5% * 3.7% 11.3% * 2.2% 10.5%
-------------- ------ -------- ------- ----- ------------ ------------ ------------- ------------ -----------
Group sales
Organic growth was 9.3%. Pricing was 9.8%, reflecting
significant cost inflation. RIG was -0.5%, impacted by capacity
constraints and portfolio optimization actions. Demand elasticity
and consumer downtrading remained limited in the context of pricing
actions.
Growth was broad-based across most geographies and categories.
Organic growth was 8.6% in developed markets, led by pricing.
Organic growth in emerging markets was 10.3%, driven by pricing and
positive RIG.
By product category, Purina PetCare was the largest contributor
to organic growth, fueled by strong momentum for science-based and
premium brands Purina ONE, Purina Pro Plan and Friskies. Coffee saw
high single-digit growth, with positive sales developments for
Nescafé, Starbucks and Nespresso. Sales in confectionery grew at a
double-digit rate, with strong growth for KitKat and seasonal
products. Growth in Infant Nutrition reached a double-digit rate,
with broad-based contributions across geographies and segments.
Dairy reported high single-digit growth, with strong demand for
coffee creamers and affordable fortified milks. Prepared dishes and
cooking aids posted high single-digit growth, led by Maggi,
Stouffers and Hot Pockets. Nestlé Health Science recorded low
single-digit growth, with continued strong demand for Medical
Nutrition and a positive sales development for active nutrition.
Despite temporary capacity constraints for Perrier, water posted
low single-digit growth led by S.Pellegrino.
By channel, organic growth in retail sales remained robust at
8.7%. E-commerce sales grew by 13.6%, reaching 16.2% of total Group
sales. Organic growth of out-of-home channels was 17.8%.
Net acquisitions increased sales by 0.3%, largely related to the
acquisition of Orgain. The impact on sales from foreign exchange
was negative at 4.0%. Total reported sales increased by 5.6% to CHF
23.5 billion.
Portfolio Management
Nestlé and private equity firm PAI Partners have agreed to set
up a joint venture for Nestlé's frozen pizza business in Europe,
creating a dedicated player in a competitive and dynamic category.
Nestlé will retain a non-controlling stake with equal voting rights
alongside PAI Partners, remaining invested in this business and
participating in future growth and value creation in the category.
The transaction is subject to employee consultations and the
approval of regulatory authorities and is expected to close in the
second half of 2023.
Zone North America
-- 11.6% organic growth: -0.8% RIG; 12.4% pricing.
Sales Sales Organic Net Foreign Reported
3M-2023 3M-2022 RIG Pricing growth M&A exchange Growth
--------- --------- ----- ------- ------- ----- --------- --------
Zone North CHF 6.3 CHF 5.8
America bn bn -0.8% 12.4% 11.6% -2.3% -0.4% 8.9%
----------- --------- --------- ----- ------- ------- ----- --------- --------
Organic growth was 11.6%, with pricing of 12.4%. RIG was -0.8%,
with a strong recovery versus the fourth quarter of 2022. Net
divestitures reduced sales by 2.3%, as a result of the divestment
of a majority stake in Freshly as well as the disposal of the
Gerber Good Start infant formula brand. Reported sales in Zone
North America increased by 8.9% to CHF 6.3 billion.
Zone North America saw broad-based growth across brands and
categories, driven by pricing, strong operational execution and
continued momentum in e-commerce. The Zone saw market share gains
in pet food, frozen meals and soluble coffee.
By product category, Purina PetCare was the largest growth
contributor, with broad-based demand across channels, particularly
e-commerce. Purina ONE, Purina Pro Plan and Friskies all saw strong
double-digit growth. Sales for Nestlé Professional and Starbucks
out-of-home solutions grew at a strong double-digit rate, supported
by distribution expansion. The beverages category, including Coffee
mate, Nescafé and Starbucks products, posted high single-digit
growth. Frozen food saw mid single-digit growth, based on strong
demand for Stouffers as well as Tombstone and Jack's pizza. In
February, the Zone announced the decision to wind down its frozen
meals and pizza business in Canada starting from the second
quarter. Gerber baby food reported double-digit growth and gained
market share, with particular strength for healthy snacking
products. Confectionery in Canada recorded double-digit growth, led
by KitKat. Water saw a sales decrease, as temporary capacity
constraints for Perrier outweighed strong growth for
S.Pellegrino.
Zone Europe
-- 9.7% organic growth: -1.0% RIG; 10.7% pricing.
Sales Sales Organic Net Foreign Reported
3M-2023 3M-2022 RIG Pricing growth M&A exchange Growth
--------- --------- ----- ------- ------- ---- --------- --------
CHF 4.9 CHF 4.6
Zone Europe bn bn -1.0% 10.7% 9.7% 1.1% -5.4% 5.4%
------------ --------- --------- ----- ------- ------- ---- --------- --------
Organic growth was 9.7%, with pricing of 10.7%. RIG was -1.0%.
Foreign exchange negatively impacted sales by 5.4%, reflecting the
appreciation of the Swiss franc against the Euro. Reported sales in
Zone Europe increased by 5.4% to CHF 4.9 billion.
Growth in Zone Europe was supported by pricing, sustained
e-commerce momentum and a strong sales development for out-of-home
channels. The Zone saw market share gains in pet food,
confectionery and Infant Nutrition.
By product category, the key contributor to growth was Purina
PetCare, driven by premium brands Felix, Friskies and Gourmet. A
new celebrity campaign for Felix resonated strongly with consumers.
Confectionery reported double-digit growth, with strong demand for
KitKat and seasonal products. Sales in Nestlé Professional grew at
a double-digit rate, supported by branded coffee solutions. Coffee
saw high single-digit growth, supported by Nescafé and Starbucks
products. Nescafé Farmers Origins, a range of coffee capsules for
Nespresso machines, saw strong growth and is now sold in seven
markets. Infant Nutrition posted mid single-digit growth, based on
continued demand for premium infant formula, particularly NAN.
Culinary reported low single-digit growth, with particular strength
for Maggi. Water posted a sales decrease, as the impact of
temporary capacity constraints for Perrier outweighed a strong
sales development for S.Pellegrino.
Zone Asia, Oceania and Africa (AOA)
-- 10.4% organic growth: 1.3% RIG; 9.1% pricing.
Sales Sales Organic Net Foreign Reported
3M-2023 3M-2022 RIG Pricing growth M&A exchange Growth
--------- --------- ---- ------- ------- ----- --------- --------
CHF 4.7 CHF 4.6
Zone AOA bn bn 1.3% 9.1% 10.4% -0.1% -9.2% 1.1%
--------- --------- --------- ---- ------- ------- ----- --------- --------
Organic growth reached 10.4%, with pricing of 9.1%. RIG was
resilient at 1.3%. Foreign exchange reduced sales by 9.2%. Reported
sales in Zone AOA increased by 1.1% to CHF 4.7 billion.
Growth in Zone AOA was driven by pricing, improved mix and
continued momentum of out-of-home channels. The Zone saw market
share gains in culinary, coffee and ice cream.
South-East Asia posted mid single-digit growth, with strong
sales developments in Nescafé and Maggi. South Asia recorded strong
double-digit growth across most categories, supported by
distribution expansion in rural areas, e-commerce momentum and
increased focus on premiumization. Sales in Middle East and Africa
grew at a double-digit rate, led by Maggi, NAN and Nescafé. Japan
reported mid single-digit growth, driven by coffee, confectionery
and Purina PetCare. Sales in South Korea grew at a double-digit
rate, fueled by Starbucks products and KitKat. Oceania recorded
double-digit growth, supported by Purina PetCare, Nescafé and
KitKat.
By product category, Infant Nutrition was the largest growth
contributor, led by Lactogen. Sales in culinary grew at a
double-digit rate, based on distribution expansion and strong
execution for Maggi. Coffee saw high single-digit growth, with
continued robust demand for Nescafé and Starbucks products.
Confectionery reported double-digit growth, fueled by strong
momentum for KitKat. Sales in Nestlé Professional grew at a
double-digit rate across geographies and categories, supported by
distribution expansion. Purina PetCare saw double-digit growth, led
by Supercoat, Purina ONE and Felix. Cocoa and malt beverages posted
mid single-digit growth, with a solid sales development for Milo
ready-to-drink products.
Zone Latin America
-- 12.8% organic growth: -0.6% RIG; 13.4% pricing.
Sales Sales Organic Net Foreign Reported
3M-2023 3M-2022 RIG Pricing growth M&A exchange Growth
--------- --------- ----- ------- ------- ---- --------- --------
Zone Latin CHF 3.0 CHF 2.7
America bn bn -0.6% 13.4% 12.8% 0.2% -0.6% 12.5%
----------- --------- --------- ----- ------- ------- ---- --------- --------
Organic growth was 12.8%, with pricing of 13.4% and RIG of
-0.6%. Foreign exchange had a negative impact of 0.6%. Net
acquisitions increased sales by 0.2%. Reported sales in Zone Latin
America increased by 12.5% to CHF 3.0 billion.
Zone Latin America recorded sustained broad-based growth,
supported by pricing, strong operational execution and continued
momentum of out-of-home channels. The Zone saw market share gains
in Infant Nutrition, pet food and portioned coffee.
Sales in Brazil grew at a strong double-digit rate, led by
confectionery, Infant Nutrition and dairy. Mexico reported
broad-based double-digit growth, with robust demand for Nescafé, La
Lechera and NAN. Colombia saw strong double-digit growth, driven by
Purina PetCare, coffee and confectionery.
By product category, confectionery was the largest growth
contributor, with strong momentum for KitKat and seasonal products.
Dairy posted double-digit growth, based on robust demand for
fortified milks and home-baking products. Sales in Infant Nutrition
grew at a double-digit rate across most segments, with particular
strength for NAN and infant cereals. Nestlé Professional reported
strong double-digit growth, fueled by momentum for coffee solutions
and distribution expansion. Coffee saw high single-digit growth,
supported by Nescafé. In the first quarter, Nescafé Dolce Gusto
launched Neo in Brazil, the most sustainable system to date with
compostable coffee pods. Sales in cocoa and malt beverages grew at
a double-digit rate, led by Nescau. Purina PetCare reported mid
single-digit growth, following a high base of comparison in
2022.
Zone Greater China
-- 3.1% organic growth: -0.8% RIG; 3.9% pricing.
Sales Sales Organic Net Foreign Reported
3M-2023 3M-2022 RIG Pricing growth M&A exchange Growth
--------- --------- ----- ------- ------- ---- --------- --------
Zone Greater CHF 1.3 CHF 1.4
China bn bn -0.8% 3.9% 3.1% 0.0% -6.8% -3.7%
------------- --------- --------- ----- ------- ------- ---- --------- --------
Organic growth was 3.1%, with pricing of 3.9%. RIG was -0.8%,
partly impacted by the timing of Chinese New Year. Foreign exchange
had a negative impact of 6.8%. Reported sales in Zone Greater China
decreased by 3.7% to CHF 1.3 billion.
Growth in Zone Greater China was supported by strong operational
execution,
e-commerce momentum and continued innovation. The Zone saw
market share gains in confectionery, pet food and ice cream.
By product category, Infant Nutrition was the largest growth
contributor, led by NAN specialty offerings and illuma. Nestlé
Professional saw mid single-digit growth, supported by innovation
and distribution expansion. Culinary posted low single-digit
growth, with solid demand for Totole. Confectionery reported low
single-digit growth, led by increased distribution for Hsu Fu Chi.
Purina PetCare recorded double-digit growth, driven by Purina Pro
Plan dry cat and veterinary products. Coffee saw a sales decrease,
as a positive sales development in soluble coffee was offset by
negative growth for ready-to-drink coffee.
Nestlé Health Science
-- 2.8% organic growth: -2.2% RIG; 5.0% pricing.
Sales Sales Organic Net Foreign Reported
3M-2023 3M-2022 RIG Pricing growth M&A Exchange growth
--------- --------- ----- ------- ------- ----- --------- --------
Nestlé CHF 1.6 CHF 1.4
Health Science bn bn -2.2% 5.0% 2.8% 10.3% -1.7% 11.3%
---------------- --------- --------- ----- ------- ------- ----- --------- --------
Organic growth was 2.8%, with pricing of 5.0% and RIG of -2.2%,
following extraordinary growth over the last three years during the
pandemic. Net acquisitions increased sales by 10.3%, largely
related to the acquisition of Orgain. Foreign exchange negatively
impacted sales by 1.7%. Reported sales in Nestlé Health Science
increased by 11.3% to CHF 1.6 billion.
Growth in Nestlé Health Science was driven by pricing,
e-commerce momentum and geographic expansion. The business
continued to gain market share.
Consumer Care saw a sales decrease, as a positive sales
development in active nutrition was offset by negative growth in
vitamins, minerals and supplements. Within active nutrition,
healthy-aging products, Vital Proteins and Orgain all saw continued
strong momentum. Vitamins, minerals and supplements saw a sales
decrease, following three years of strong growth during the
pandemic.
Medical Nutrition recorded double-digit growth, with strong
sales developments for pediatric and allergy products, Althéra,
Alfaré and Alfamino. Acute and adult medical care products,
particularly Resource and Compleat, also posted strong growth.
By geography, North America saw positive growth. Europe reported
mid single-digit growth. Other regions combined posted high
single-digit growth.
Nespresso
-- 2.9% organic growth: -1.1% RIG; 4.0% pricing.
Sales Sales Organic Net Foreign Reported
3M-2023 3M-2022 RIG Pricing growth M&A Exchange growth
--------- --------- ----- ------- ------- ----- --------- --------
CHF 1.6 CHF 1.6
Nespresso bn bn -1.1% 4.0% 2.9% -1.3% -3.8% -2.2%
---------- --------- --------- ----- ------- ------- ----- --------- --------
Organic growth was 2.9%, with pricing of 4.0%. RIG was -1.1%,
mainly due to post-pandemic normalization. Following strong growth
during the pandemic, comparable sales were around 30% above 2019
levels. Foreign exchange negatively impacted sales by 3.8%.
Reported sales in Nespresso decreased by 2.2% to CHF 1.6
billion.
The key growth contributor was the Vertuo system, which
continued to see broad-based momentum. Growth in out-of-home
channels was also strong, with further adoption for the Momento
system, particularly in the office segment. Innovation continued to
resonate with consumers, including the expansion of the Ispirazione
Italiana range through the launch of the Milano Intenso coffee.
By geography, North America posted double-digit growth with
continued market share gains. Europe reported a sales decrease.
Other regions combined saw low single-digit growth.
Business as a force for good: Material progress on plastic
packaging
Nestlé is reducing plastic usage through less packaging, better
packaging and better systems. The company passed peak virgin
plastic consumption and peak greenhouse gas emissions in 2019,
while the business continued to grow.
Global estimates show that over 180 million tonnes of plastics
are used for packaging in a year*. In 2022, Nestlé used 0.9 million
tonnes of plastics for packaging, representing 0.5% of the plastic
packaging globally.
Nestlé strives to use only the minimum amount of plastic
packaging necessary to ensure food safety. The company is
accelerating the development and scaling of next-generation
packaging solutions. These include delivery models like reuse and
refill with 20 pilots in 12 countries, recyclable paper in products
like Quality Street and KitKat, as well as compostable packaging
such as coffee pods. It is also continuously reducing packaging by
volume and weight.
Nestlé has reduced its use of virgin plastic in packaging by
10.5% since 2018 and is on track to reduce virgin plastic usage by
one third by 2025. For example, the company phased out the use of
4.5 billion plastic straws per year and replaced them with paper
straws globally.
In 2022, the company cut the weight of its total product
packaging by 200 000 tonnes while reducing the number of pieces by
14 billion. This reduction in total packaging weight combined with
packaging redesign led to greenhouse gas reductions of
280 000 tonnes in 2022.
At year-end 2022, 81.9% of the company's plastic packaging was
designed for recycling. By 2025, Nestlé aims to reach over 95%.
Ultimately, it aims for 100% reusable or recyclable packaging and a
waste-free future.
The company takes its responsibility to advance the circular
economy seriously and is determined to keep effecting change
through a collaborative approach. Nestlé is collaborating with
supply chain partners, civil society and government stakeholders to
act on infrastructure as well as the UN Treaty on Plastics
Pollution.
* Source: OECD Global Plastics Outlook 2022
Outlook
Full-year 2023 outlook confirmed : we expect organic sales
growth between 6% and 8% and underlying trading operating profit
margin between 17.0% and 17.5%. Underlying earnings per share in
constant currency is expected to increase between 6% and 10%.
Contacts
Media
Christoph Meier
Tel.: +41 21 924 2200
mediarelations@nestle.com
Investors
Luca Borlini
Tel.: +41 21 924 3509
ir@nestle.com
Annex
Three-month sales overview by operating segment
Zone Zone Zone Nestlé
Total North Zone Zone Latin Greater Health Other
Group America Europe AOA America China Science Nespresso Businesses
------ -------- ------- ----- ------------ ------------ ------------- ------------ -----------
Sales 3M-2023
(CHF m) 23 470 6 312 4 881 4 681 3 032 1 311 1 617 1 567 69
Sales 3M-2022
(CHF m) 22 238 5 800 4 633 4 633 2 697 1 361 1 449 1 602 63
-------------- ------ -------- ------- ----- ------------ ------------ ------------- ------------ -----------
Real internal
growth (RIG) -0.5% -0.8% -1.0% 1.3% * 0.6% * 0.8% * 2.2% * 1.1% 12.7%
Pricing 9.8% 12.4% 10.7% 9.1% 13.4% 3.9% 5.0% 4.0% 0.1%
Organic growth 9.3% 11.6% 9.7% 10.4% 12.8% 3.1% 2.8% 2.9% 12.8%
Net M&A 0.3% -2.3% 1.1% -0.1% 0.2% 0.0% 10.3% * 1.3% 0.0%
Foreign
exchange -4.0% -0.4% -5.4% -9.2% * 0.6% * 6.8% * 1.7% * 3.8% -2.3%
Reported sales
growth 5.6% 8.9% 5.4% 1.1% 12.5% * 3.7% 11.3% * 2.2% 10.5%
-------------- ------ -------- ------- ----- ------------ ------------ ------------- ------------ -----------
Three-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 3M-2023
(CHF m) 23 470 6 223 761 2 800 3 880 3 107 2 030 4 669
Sales 3M-2022
(CHF m) 22 238 6 063 790 2 709 3 596 3 098 1 873 4 109
--------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
Real internal
growth (RIG) -0.5% -1.1% -7.3% -3.7% 0.3% -4.3% 5.9% 3.5%
Pricing 9.8% 8.3% 10.5% 11.8% 7.9% 11.1% 7.6% 12.2%
Organic growth 9.3% 7.2% 3.1% 8.1% 8.2% 6.8% 13.5% 15.7%
--------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
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