REG - Nestle SA Nestle Holdings Inc - Nestlé reports half-year results for 2023
27/07/2023 07:00
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RNS Number : 3964H Nestle SA 27 July 2023
Nestlé press release
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Report published today
2023 Half-Year Report:
https://www.nestle.com/sites/default/files/2023-07/2023-half-year-report-en.pdf
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[Ad hoc announcement pursuant to Art. 53 LR]
Vevey/Switzerland, July 27, 2023
Nestlé reports half-year results for 2023
· Organic growth reached 8.7%, with pricing of 9.5% and real internal
growth (RIG) of -0.8%. Growth was broad-based across geographies and
categories.
· Total reported sales increased by 1.6% to CHF 46.3 billion (6M-2022:
CHF 45.6 billion). Foreign exchange decreased sales by 6.7%. Net
acquisitions had a negative impact of 0.4%.
· The underlying trading operating profit (UTOP) margin was 17.1%, up
20 basis points on a reported basis and 30 basis points in constant currency.
The trading operating profit (TOP) margin increased by 120 basis points to
15.9% on a reported basis, reflecting one-off items in the prior year.
· Underlying earnings per share increased by 11.1% in constant currency
and increased by 4.1% on a reported basis to CHF 2.43. Earnings per share
increased by 10.6% to CHF 2.13 on a reported basis.
· Free cash flow increased by CHF 1.9 billion to CHF 3.4 billion,
mainly reflecting lower inventory levels.
· Full-year 2023 outlook updated: we are increasing organic sales
growth guidance to a range of 7% to 8%. The underlying trading operating
profit margin is expected to be 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: "We pursued our strategic priorities
with discipline and focus in a fast-evolving consumer environment. Based on
the strong performance in the first half of the year we upgrade our organic
sales growth outlook for 2023. At-home consumption post-COVID has now
normalized, removing a growth drag on some of our categories. Out-of-home
channels continue to see strong growth momentum.
For the remainder of the year, we are confident that we will deliver a
positive combination of volume and mix, an improvement in gross margin and a
significant increase in marketing investments. Combined with ongoing portfolio
management and optimization as well as the continued implementation of our
sustainability initiatives, we are well-positioned to grow and to generate
value for our stakeholders."
Total Group Zone North America Zone Europe Zone AOA Zone Latin America Zone Greater China Nestlé Health Nespresso Other Businesses
Science
Sales 6M-2023 (CHF m) 46 293 12 553 9 467 9 060 6 082 2 548 3 318 3 128 137
Sales 6M-2022 (CHF m) 45 580 12 138 9 283 9 335 5 659 2 677 3 167 3 190 131
Real internal growth (RIG) -0.8% -1.0% -2.4% 0.1% -0.9% 1.3% -1.9% 0.8% 8.3%
Pricing 9.5% 11.0% 11.3% 9.2% 12.5% 3.4% 5.3% 3.7% 1.3%
Organic growth 8.7% 10.0% 8.9% 9.3% 11.6% 4.7% 3.5% 4.5% 9.6%
Net M&A -0.4% -2.1% -0.9% -0.1% 0.1% 0.0% 6.0% -0.8% 0.0%
Foreign exchange -6.7% -4.4% -6.0% -12.1% -4.3% -9.5% -4.8% -5.6% -4.3%
Reported sales growth 1.6% 3.4% 2.0% -2.9% 7.5% -4.8% 4.7% -1.9% 5.3%
6M-2023 Underlying TOP Margin 17.1% 21.6% 16.6% 22.8% 19.8% 16.6% 13.0% 21.7% -12.5%
6M-2022 Underlying TOP Margin 16.9% 18.8% 17.3% 23.5% 21.1% 15.0% 13.7% 24.3% -3.6%
Group sales
Organic growth was 8.7%. Pricing was 9.5%, reflecting the impact of cost
inflation over the last two years. RIG was -0.8%, with a negative impact of
around 60 basis points from portfolio optimization actions. Remaining capacity
constraints also limited RIG. Overall, demand elasticity was limited in the
context of pricing actions.
Growth was broad-based across most geographies and categories. In developed
markets, organic growth was 8.0%, led by pricing with negative RIG. In
emerging markets, organic growth was 9.6%, driven by pricing and flat RIG.
By product category, Purina PetCare was the largest contributor to organic
growth, with strong momentum for both wet and dry offerings. Purina ONE,
Purina Pro Plan and Friskies all recorded double-digit growth. Coffee saw high
single-digit growth, with positive sales developments across brands and a
continued recovery for out-of-home channels. Infant Nutrition posted
double-digit growth, with broad-based contributions across brands and
geographies. Dairy reported high single-digit growth, with strong demand for
coffee creamers and affordable fortified milks. Confectionery recorded
double-digit growth, fueled by a strong sales development for KitKat. Prepared
dishes and cooking aids posted mid single-digit growth, led by Maggi. Nestlé
Health Science recorded low single-digit growth, with a return to positive
growth for vitamins, minerals and supplements in the second quarter, led by
Garden of Life and Pure Encapsulations. Despite temporary capacity constraints
for Perrier, water posted mid single-digit growth led by S.Pellegrino and
Acqua Panna.
By channel, organic growth in retail sales remained robust at 8.0%. E-commerce
sales grew by 13.5%, reaching 16.7% of total Group sales. Organic growth of
out-of-home channels was 17.1%.
Net divestitures decreased sales by 0.4%, largely related to the divestment of
a majority stake in Freshly as well as the disposal of the Gerber Good Start
infant formula brand. The impact on sales from foreign exchange was negative
at 6.7%, following broad-based appreciation of the Swiss Franc. Total reported
sales increased by 1.6% to CHF 46.3 billion.
Underlying Trading Operating Profit
Underlying trading operating profit increased by 2.9% to CHF 7.9 billion. The
underlying trading operating profit margin reached 17.1%, an increase of 20
basis points on a reported basis and 30 basis points in constant currency.
Gross margin decreased by 40 basis points to 45.6%, following significant
inflation for commodity and packaging costs as well as salaries and wages.
Pricing, cost efficiencies and portfolio optimization helped to partly offset
the impact of cost inflation. Compared to the second half of 2022, gross
margin improved by 110 basis points.
Distribution costs as a percentage of sales decreased by 50 basis points to
8.6% of sales, mainly as a result of lower freight and energy costs.
Marketing and administration expenses as a percentage of sales were 18.6%.
Within this line item, advertising and marketing expenses were 7.1% of sales,
increasing by 50 basis points compared to the second half of 2022. In
constant currency, advertising and marketing expenses increased by 7.5%
compared to the prior year.
Net other trading items decreased to CHF 0.6 billion from CHF 1.0 billion,
reflecting one-off items in the prior year, particularly asset impairments. As
a result, trading operating profit increased by 10.0% to CHF 7.4 billion. The
trading operating profit margin reached 15.9%, an increase of 120 basis points
on a reported basis and 130 basis points in constant currency. This increase
reflects one-off items in the prior year and an improved underlying trading
operating profit margin in the current year.
Net Financial Expenses and Income Tax
Net financial expenses increased to CHF 697 million. The average cost of net
debt was 2.6% compared to 1.9% in the first half of 2022.
The Group reported tax rate decreased by 90 basis points to 23.3% as a result
of one-off items. The underlying tax rate decreased by 30 basis points to
20.6%, mainly due to the geographic and business mix.
Net Profit and Earnings Per Share
Net profit increased by 7.7% to CHF 5.6 billion. Net profit margin increased
by 70 basis points to 12.2% on a reported basis and by 90 basis points in
constant currency. The increase was mainly due to one-off items in the prior
year. As a result, earnings per share increased by 10.6% to CHF 2.13 on a
reported basis.
Underlying earnings per share increased by 11.1% in constant currency and by
4.1% on a reported basis to CHF 2.43. The increase was mainly the result of
strong organic growth and improved underlying trading operating profit margin.
Nestlé's share buyback program contributed 1.4% to the underlying earnings
per share increase, net of finance costs.
Cash Flow
Cash generated from operations increased to CHF 7.1 billion from CHF 5.7
billion. The step up was mainly due to working capital movements, particularly
lower inventory levels. Free cash flow increased to CHF 3.4 billion from CHF
1.5 billion, as working capital movements and the CHF 643 million proceeds
from the disposal of the Prometheus Biosciences stake more than offset higher
capital expenditure.
Share Buyback Program
In the first half, the Group repurchased CHF 2.4 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 55.6 billion as at June 30, 2023, compared to
CHF 48.2 billion at December 31, 2022. The increase largely reflected the
dividend payment of CHF 7.8 billion and share buybacks of CHF 2.6 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 expected to close on
September 1, 2023, subject to the approval of regulatory authorities.
The strategic review of Palforzia, the peanut allergy treatment, is
progressing, with several options under consideration. In the first half of
2023, the business has significantly enhanced its cost structure and seen some
progress in sales development.
Zone North America
· 10.0% organic growth: -1.0% RIG; 11.0% pricing.
· The underlying trading operating profit margin increased to 21.6%,
mainly as a result of the divestment of a majority stake in Freshly and
portfolio optimization actions.
Sales Sales RIG Pricing Organic growth UTOP UTOP Margin Margin
6M-2023 6M-2022 6M-2023 6M-2022 6M-2023 6M-2022
Zone North America CHF 12.6 bn CHF 12.1 bn -1.0% 11.0% 10.0% CHF 2.7 bn CHF 2.3 bn 21.6% 18.8%
Organic growth was 10.0%, with pricing of 11.0%. RIG was -1.0%, reflecting
portfolio optimization actions and capacity constraints, particularly for
Purina PetCare, Perrier and coffee creamers. Net divestitures reduced sales by
2.1%, 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. Foreign exchange
had a negative impact of 4.4%. Reported sales in Zone North America increased
by 3.4% to CHF 12.6 billion.
Zone North America saw broad-based growth across brands and categories,
driven by inflation-related pricing, favorable mix and continued momentum for
e-commerce. The Zone saw market share gains in pet food, frozen meals as well
as soluble and portioned coffee.
By product category, Purina PetCare was the largest growth contributor, with
broad-based demand across segments and channels, particularly e-commerce.
Purina ONE, Purina Pro Plan and Friskies all saw strong double-digit growth.
The beverages category, including Starbucks products, Coffee mate and
Nescafé, posted high single-digit growth. Sales for Nestlé Professional and
Starbucks out-of-home solutions grew at a strong double-digit rate, led by
distribution expansion. Gerber baby food reported mid single-digit growth with
market share gains, led by healthy snacking. Growth in frozen food was flat,
partly impacted by the rapid winding down of the frozen meals and pizza
business in Canada in the second quarter. Stouffers as well as Jack's and
Tombstone pizza recorded robust growth with market share gains. Nido fortified
milks reported strong double-digit growth, led by distribution expansion.
Water saw a slight sales decrease, as temporary capacity constraints for
Perrier continued to outweigh strong growth for S.Pellegrino and Acqua
Panna.
The Zone's underlying trading operating profit margin increased by 280 basis
points, mainly as a result of the divestment of a majority stake in Freshly
and portfolio optimization actions. Pricing and cost efficiencies also helped
to offset significant cost inflation.
Zone Europe
· 8.9% organic growth: -2.4% RIG; 11.3% pricing.
· The underlying trading operating profit margin decreased by 70 basis
points to 16.6%.
Sales Sales RIG Pricing Organic growth UTOP UTOP Margin Margin
6M-2023 6M-2022 6M-2023 6M-2022 6M-2023 6M-2022
Zone Europe CHF 9.5 bn CHF 9.3 bn -2.4% 11.3% 8.9% CHF 1.6 bn CHF 1.6 bn 16.6% 17.3%
Organic growth was 8.9% with pricing of 11.3%. RIG was -2.4%, following a high
base of comparison in the last 2 years and portfolio optimization actions.
Foreign exchange negatively impacted sales by 6.0%. Net divestitures reduced
sales by 0.9%. Reported sales in Zone Europe increased by 2.0% to CHF 9.5
billion.
Growth in Zone Europe was supported by pricing, strong sales development for
e-commerce and a continued momentum 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 differentiated offerings across premium brands Felix, Gourmet and Purina
ONE. Confectionery reported high single-digit growth, led by KitKat and
seasonal products. Nestlé Professional posted double-digit growth. Coffee saw
mid single-digit growth, with particular strength for Nescafé soluble coffee
and Starbucks products. Infant Nutrition recorded high single-digit growth,
based on continued momentum for premium infant formula, particularly NAN.
Culinary posted low single-digit growth, with improved sales developments for
Maggi and Thomy. Water sales were close to flat, as strong growth for
S.Pellegrino and Acqua Panna offset the impact of temporary capacity
constraints for Perrier.
The Zone's underlying trading operating profit margin decreased by 70 basis
points. Significant cost inflation outweighed pricing and cost efficiencies.
Zone Asia, Oceania and Africa (AOA)
· 9.3% organic growth: 0.1% RIG; 9.2% pricing.
· The underlying trading operating profit margin decreased by 70 basis
points to 22.8%.
Sales Sales RIG Pricing Organic growth UTOP UTOP Margin Margin
6M-2023 6M-2022 6M-2023 6M-2022 6M-2023 6M-2022
Zone AOA CHF 9.1 bn CHF 9.3 bn 0.1% 9.2% 9.3% CHF 2.1 bn CHF 2.2 bn 22.8% 23.5%
Organic growth was 9.3%, with RIG of 0.1%. Pricing increased to 9.2%, with
broad-based contributions from all geographies and categories. Foreign
exchange reduced sales by 12.1%. Reported sales in Zone AOA decreased by 2.9%
to CHF 9.1 billion.
Growth in Zone AOA was driven by pricing, continued momentum of out-of-home
channels and innovation. The Zone saw market share gains in coffee, culinary
and confectionery.
South-East Asia posted mid single-digit growth, with strong sales developments
in coffee, culinary and Infant Nutrition. South Asia recorded strong
double-digit growth, led by KitKat and Munch as well as Maggi and Nescafé.
Middle East and Africa saw double-digit growth, with particular strength for
affordable offerings in culinary, Infant Nutrition and coffee. Japan reported
mid single-digit growth, driven by KitKat and Purina PetCare. South Korea
posted high single-digit growth, fueled by Starbucks products. Oceania
recorded high single-digit growth, supported by Purina PetCare, KitKat and
Nescafé.
By product category, Infant Nutrition was the largest growth contributor, led
by Lactogen, NAN and Cerelac. Culinary recorded double-digit growth, based on
distribution expansion and strong execution for Maggi. Coffee saw high
single-digit growth, with continued robust demand for Nescafé and Starbucks
products. The recently launched Starbucks ready-to-drink products resonated
strongly with consumers. Sales for Nestlé Professional grew at a strong
double-digit rate across most geographies and categories, supported by channel
penetration and customer acquisition. Confectionery reported double-digit
growth, fueled by strong momentum for KitKat. Purina PetCare saw high
single-digit growth, led by Supercoat, Purina ONE and Felix. Cocoa and malt
beverages posted low single-digit growth, supported by Milo powder and
ready-to-drink products.
The Zone's underlying trading operating profit margin decreased by 70 basis
points. The impact of input cost inflation and currency depreciation more than
offset pricing and disciplined cost control.
Zone Latin America
· 11.6% organic growth: -0.9% RIG; 12.5% pricing.
· The underlying trading operating profit margin decreased by 130 basis
points to 19.8%.
Sales Sales RIG Pricing Organic growth UTOP UTOP Margin Margin
6M-2023 6M-2022 6M-2023 6M-2022 6M-2023 6M-2022
Zone Latin America CHF 6.1 bn CHF 5.7 bn -0.9% 12.5% 11.6% CHF 1.2 bn CHF 1.2 bn 19.8% 21.1%
Organic growth was 11.6%, with pricing of 12.5% and RIG of -0.9%. Foreign
exchange had a negative impact of 4.3%. Reported sales in Zone Latin America
increased by 7.5% to CHF 6.1 billion.
Zone Latin America recorded sustained strong growth across all geographies and
product categories, supported by pricing, strong operational execution and
continued momentum of out-of-home channels. The Zone saw market share gains in
pet food, Infant Nutrition and culinary.
Brazil posted strong double-digit growth, with strong momentum for Garoto and
KitKat as well as NAN and Mucilon infant cereals. Mexico reported double-digit
growth, with strong sales developments for dairy, coffee and Infant Nutrition.
The Plata region saw double-digit growth, led by coffee and water.
By product category, confectionery was the largest growth contributor,
reflecting strong demand for KitKat and key local brands as well as new
product launches. Dairy posted double-digit growth, supported by fortified
milks and dairy culinary solutions. Infant Nutrition saw double-digit growth,
based on solid momentum for NAN and Nido growing-up milks. Coffee reported
broad-based double-digit growth, supported by Nescafé soluble coffee. Sales
for Nestlé Professional grew at a strong double-digit rate, with continued
strength for branded coffee solutions. Purina PetCare saw mid single-digit
growth, following a high base of comparison in 2022.
The Zone's underlying trading operating profit margin decreased by 130 basis
points. One-off items in the prior year and cost inflation more than offset
pricing and cost efficiencies.
Zone Greater China
· 4.7% organic growth: 1.3% RIG; 3.4% pricing.
· The underlying trading operating profit margin increased by 160 basis
points to 16.6%.
Sales Sales RIG Pricing Organic growth UTOP UTOP Margin Margin
6M-2023 6M-2022 6M-2023 6M-2022 6M-2023 6M-2022
Zone Greater China CHF 2.5 bn CHF 2.7 bn 1.3% 3.4% 4.7% CHF 0.4 bn CHF 0.4 bn 16.6% 15.0%
Organic growth was 4.7%, with pricing of 3.4%. RIG was 1.3%. Foreign exchange
had a negative impact of 9.5%. Reported sales in Zone Greater China decreased
by 4.8% to CHF 2.5 billion.
Growth in Zone Greater China was supported by e-commerce momentum, recovery of
out-of-home channels and pricing. The Zone saw market share gains in pet food
and confectionery.
By product category, Nestlé Professional was the largest growth contributor,
supported by innovation and distribution expansion. Infant Nutrition saw mid
single-digit growth, led by NAN specialty offerings and illuma. Confectionery
recorded high single-digit growth, led by Hsu Fu Chi and Shark wafer. Culinary
posted mid single-digit growth, with increased demand for Totole in
out-of-home channels. Coffee reported low single-digit growth, supported by
soluble coffee and Starbucks products. Ready-to-drink coffee saw positive
growth, with a strong recovery in the second quarter. Nutritional milk
products for adults recorded double-digit growth, supported by new product
launches. Purina PetCare reported double-digit growth, driven by Purina Pro
Plan and Fancy Feast. In the second quarter, Purina PetCare opened new
production lines in Tianjin.
The Zone's underlying trading operating profit margin increased by 160 basis
points. Favorable mix and disciplined cost control more than offset cost
inflation.
Nestlé Health Science
· 3.5% organic growth: -1.9% RIG; 5.3% pricing.
· The underlying trading operating profit margin decreased by 70 basis
points to 13.0%.
Sales Sales RIG Pricing Organic growth UTOP UTOP Margin Margin
6M-2023 6M-2022 6M-2023 6M-2022 6M-2023 6M-2022
Nestlé Health Science CHF 3.3 bn CHF 3.2 bn -1.9% 5.3% 3.5% CHF 0.4 bn CHF 0.4 bn 13.0% 13.7%
Organic growth was 3.5%, with pricing of 5.3%. RIG was -1.9%, following
extraordinary growth over the last three years during the pandemic. Net
acquisitions increased sales by 6.0%, largely related to the acquisition of
Orgain. Foreign exchange negatively impacted sales by 4.8%. Reported sales in
Nestlé Health Science increased by 4.7% to CHF 3.3 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, with a return to positive growth in the
second quarter.
· Active nutrition reported low single-digit growth, with positive
sales developments for healthy-aging products, Vital Proteins and Orgain.
· Vitamins, minerals and supplements posted a sales decrease,
following three years of strong growth during the pandemic. The business
returned to positive growth in the second quarter, led by Garden of Life and
Pure Encapsulations.
Medical Nutrition recorded double-digit growth, with strong momentum across
all segments. Growth was led by acute and adult medical care products as well
as pediatric and allergy products.
By geography, North America saw low single-digit growth. Europe reported mid
single-digit growth. Other regions combined posted high single-digit growth.
The underlying trading operating profit margin of Nestlé Health Science
decreased by 70 basis points. Cost inflation more than offset pricing and
acquisition synergies.
Nespresso
· 4.5% organic growth: 0.8% RIG; 3.7% pricing.
· The underlying trading operating profit margin decreased by 260 basis
points to 21.7%.
Sales Sales RIG Pricing Organic growth UTOP UTOP Margin Margin
6M-2023 6M-2022 6M-2023 6M-2022 6M-2023 6M-2022
Nespresso CHF 3.1 bn CHF 3.2 bn 0.8% 3.7% 4.5% CHF 0.7 bn CHF 0.8 bn 21.7% 24.3%
Organic growth was 4.5%, with pricing of 3.7%. RIG was 0.8%. Foreign exchange
negatively impacted sales by 5.6%. Reported sales in Nespresso decreased by
1.9% to CHF 3.1 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 roll-out of
Vertuo Pop, a new compact machine, as well as the launch of home compostable
coffee capsules in France in June.
By geography, North America posted double-digit growth, with continued market
share gains. Europe reported slightly positive growth. Other regions combined
saw low single-digit growth.
The underlying trading operating profit margin of Nespresso decreased by 260
basis points. Significant coffee cost inflation and the appreciation of the
Swiss Franc more than offset pricing actions. The business continued to invest
in the rollout of the Vertuo system as well as in media advertising.
Business as a force for good: Eliminating deforestation from Nestlé's palm
oil supply chains
The European Union recently passed legislation that will ban the import of
commodities linked to deforestation, including palm oil. Nestlé has worked
for over a decade to address deforestation in its palm oil supply chains and
in all other major supply chains. This strong foundation means the company is
well placed to address the new law.
Traceability is key to preventing deforestation. As such, Nestlé sources from
suppliers that can trace their palm oil all the way back to the plantation on
which it was grown. Together with external partners, Nestlé assessed the
company's palm oil supply chains to be 95.6% deforestation-free at the end of
2022. Nestlé is vigilant in its efforts to maintain this level of
performance. It works with experts and industry bodies to continually improve
environmental and social practices, take action when risks or issues are
identified, and invest in technology to stay ahead.
One such technology is Starling, a satellite-based system, which Nestlé uses
to monitor its palm oil supply chains. Starling helps the company identify
deforestation risks and cases around the mills from which it sources as well
as deforestation patterns. This supports Nestlé in prioritizing actions on
the ground, where they are most needed.
In the Aceh and Riau provinces of Indonesia, for example, Nestlé collaborates
with partners to drive sustainable production, forest conservation as well as
good social and labor practices. It works with the government on integrated
land use planning and supports a "No Deforestation, No Peatland, No
Exploitation" policy. Based on new information from satellite monitoring, the
company recently expanded the scope of this work to include the East
Kalimantan province.
Nestlé also strives to include smallholder farmers in its supply chains,
given that they represent 40% of the world's palm oil supply. It recently
helped launch a Smallholders Hub in Aceh that trains farmers on good
agricultural practices and helps them increase their yields from existing
farmland. This reduces the risk of encroachment into protected areas. Similar
programs are being rolled out in other landscapes.
Nestlé is now going beyond deforestation to conserve and restore natural
ecosystems, while also promoting sustainable livelihoods and respecting human
rights. It was recognized for its work in this year's Forest 500 report,
coming in third for its efforts in tackling deforestation among companies
exposed to the issue.
Palm oil is highly versatile. It requires four to ten times less land to
produce the same amount of oil as other plants. Replacing it is not the answer
- neither for the environment, nor for the millions of farmers whose
livelihoods depend on it. That is why Nestlé goes ever further to make palm
oil production truly sustainable, for both forests and communities.
Outlook
Full-year 2023 outlook updated: we are increasing organic sales growth
guidance to a range of 7% to 8%. The underlying trading operating profit
margin is expected to be 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 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
Total Group Zone North America Zone Europe Zone AOA Zone Latin America Zone Greater China Nestlé Health Science Nespresso Other Businesses
Sales 6M-2023 (CHF m) 46 293 12 553 9 467 9 060 6 082 2 548 3 318 3 128 137
Sales 6M-2022 (CHF m) 45 580 12 138 9 283 9 335 5 659 2 677 3 167 3 190 131
Real internal growth (RIG) -0.8% -1.0% -2.4% 0.1% -0.9% 1.3% -1.9% 0.8% 8.3%
Pricing 9.5% 11.0% 11.3% 9.2% 12.5% 3.4% 5.3% 3.7% 1.3%
Organic growth 8.7% 10.0% 8.9% 9.3% 11.6% 4.7% 3.5% 4.5% 9.6%
Net M&A -0.4% -2.1% -0.9% -0.1% 0.1% 0.0% 6.0% -0.8% 0.0%
Foreign exchange -6.7% -4.4% -6.0% -12.1% -4.3% -9.5% -4.8% -5.6% -4.3%
Reported sales growth 1.6% 3.4% 2.0% -2.9% 7.5% -4.8% 4.7% -1.9% 5.3%
6M-2023 Underlying TOP (CHF m) 7 904 2 713 1 570 2 068 1 202 422 432 678 -17
6M-2022 Underlying TOP (CHF m) 7 683 2 284 1 606 2 198 1 196 400 435 777 -5
6M-2023 Underlying TOP Margin 17.1% 21.6% 16.6% 22.8% 19.8% 16.6% 13.0% 21.7% -12.5%
6M-2022 Underlying TOP Margin 16.9% 18.8% 17.3% 23.5% 21.1% 15.0% 13.7% 24.3% -3.6%
Half-year sales and underlying trading operating profit (UTOP) overview by
product
Total Group Powdered & liquid beverages Water Milk products & ice cream Nutrition & Health Science Prepared dishes & cooking aids Confec-tionery PetCare
Sales 6M-2023 (CHF m) 46 293 12 339 1 706 5 418 7 832 5 931 3 694 9 373
Sales 6M-2022 (CHF m) 45 580 12 335 1 792 5 443 7 689 6 137 3 595 8 589
Real internal growth (RIG) -0.8% -0.6% -6.3% -3.8% -0.5% -4.2% 2.6% 2.9%
Pricing 9.5% 7.8% 10.5% 11.3% 7.8% 10.0% 8.2% 12.1%
Organic growth 8.7% 7.2% 4.2% 7.5% 7.4% 5.8% 10.8% 15.0%
6M-2023 Underlying TOP (CHF m) 7 904 2 607 187 1 261 1 529 989 536 1 959
6M-2022 Underlying TOP (CHF m) 7 683 2 915 175 1 192 1 502 974 498 1 635
6M-2023 Underlying TOP Margin 17.1% 21.1% 11.0% 23.3% 19.5% 16.7% 14.5% 20.9%
6M-2022 Underlying TOP Margin 16.9% 23.6% 9.7% 21.9% 19.5% 15.9% 13.8% 19.0%
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