REG - Nestle SA Nestle Holdings Inc - Nestlé reports nine-month sales for 2023
19/10/2023 07:00
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RNS Number : 6529Q Nestle SA 19 October 2023
Nestlé Press Release
Vevey/Switzerland, October 19, 2023
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Nestlé reports nine-month sales for 2023
· Organic growth reached 7.8%, with pricing of 8.4% and real internal
growth (RIG) of -0.6%. Growth was broad-based across geographies and
categories.
· Total reported sales decreased by 0.4% to CHF 68.8 billion (9M-2022:
CHF 69.1 billion). Foreign exchange decreased sales by 7.4%. Net acquisitions
had a negative impact of 0.8%.
· Portfolio management progressing. In the third quarter, Nestlé
announced an agreement to acquire a majority stake in Grupo CRM, a premium
chocolate company in Brazil. Nestlé also divested Palforzia, its peanut
allergy treatment business, to Stallergenes Greer.
· Full-year 2023 outlook confirmed: we expect organic sales growth
between 7% 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: "Our diversified portfolio and
differentiated offerings helped us deliver strong organic growth in the first
nine months of the year. Growth was driven by pricing as we continued to
navigate historic inflation levels. The recovery of our volume and mix is
underway. We are seeing the benefits of our portfolio optimization initiatives
and increasing marketing investments behind our billionaire brands. These
steps underpin our confidence that real internal growth, the sum of volume and
mix, will turn positive in the second half of the year and again become the
main driver of growth going forward.
At the same time, Nestlé has further strengthened its nutrition strategy and
stepped-up its efforts to guide people towards a balanced diet. Actions
include providing clear, front-of-pack portion guidance, transparency on the
nutritional value of our products and leading marketing-to-children policies.
We also set an ambitious target to grow the sales of our more nutritious
products by CHF 20-25 billion by 2030."
Total Group Zone North America Zone Europe Zone AOA Zone Latin America Zone Greater China Nestlé Nespresso Other Businesses
Health
Science
Sales 9M-2023 (CHF m) 68 829 19 027 14 144 13 223 9 139 3 624 4 850 4 617 205
Sales 9M-2022 (CHF m) 69 132 19 093 13 968 13 899 8 648 3 843 4 811 4 674 196
Real internal growth (RIG) -0.6% -0.9% -2.3% 0.0% -0.6% 2.3% -1.9% 1.6% 8.3%
Pricing 8.4% 8.9% 11.1% 8.6% 10.5% 2.6% 4.4% 3.5% 1.5%
Organic growth 7.8% 8.0% 8.8% 8.6% 10.0% 4.9% 2.5% 5.2% 9.8%
Net M&A -0.8% -2.2% -2.4% -0.1% 0.0% 0.1% 3.8% -0.6% 0.0%
Foreign exchange -7.4% -6.1% -5.2% -13.3% -4.3% -10.6% -5.9% -5.7% -5.1%
Reported sales growth -0.4% -0.3% 1.3% -4.8% 5.7% -5.7% 0.5% -1.2% 4.7%
Group sales
Organic growth was 7.8%. Pricing was 8.4%, reflecting the impact of cost
inflation over the last two years. RIG was -0.6%, impacted by portfolio
optimization and remaining capacity constraints. In the third quarter, RIG
improved to -0.3%, despite temporary capacity constraints for Perrier and a
short-term supply constraint for vitamins, minerals and supplements, which
surfaced in August.
Growth was broad-based across most geographies and categories. In developed
markets, organic growth was 6.9%, led by pricing with negative RIG. In
emerging markets, organic growth was 9.0%, driven by pricing and slightly
positive RIG.
By product category, Purina PetCare was the largest contributor to organic
growth, with strong momentum across all channels. Purina ONE, Purina Pro Plan
and Felix all recorded double-digit growth. Coffee saw high single-digit
growth, with positive sales developments across brands and channels. Starbucks
products reported strong growth, supported by innovation and the launch of
ready-to-drink offerings in South-East Asia and Oceania. Infant Nutrition
posted high single-digit growth, with broad-based contributions across brands
and geographies. Confectionery recorded double-digit growth, fueled by a
strong sales development for KitKat. Dairy reported high single-digit growth,
led by coffee creamers and affordable fortified milks. Prepared dishes and
cooking aids posted mid single-digit growth, with strong demand for Maggi.
Nestlé Health Science recorded low single-digit growth, as continued momentum
for Medical Nutrition was partly offset by a sales decline in vitamins,
minerals and supplements. Water posted low single-digit growth, impacted by
temporary capacity constraints for Perrier.
By channel, organic growth in retail sales remained robust at 7.1%. E-commerce
sales grew by 12.7%, reaching 16.6% of total Group sales. Organic growth of
out-of-home channels was 15.7%.
Net divestitures decreased sales by 0.8%, 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 7.4%, following broad-based appreciation of the Swiss Franc. Total reported
sales decreased by 0.4% to CHF 68.8 billion.
Portfolio Management
Nestlé and private equity firm PAI Partners have completed the transaction to
create a joint venture for Nestlé's frozen pizza business in Europe. The
effective date is September 1, 2023. Nestlé retains 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.
On September 4, 2023, Nestlé divested Palforzia, its peanut allergy treatment
business, to Stallergenes Greer, a biopharmaceutical company which specializes
in the diagnosis and treatment of allergies. The transaction was closed upon
signing. Nestlé will receive milestone payments and ongoing royalties from
Stallergenes Greer.
Nestlé announced an agreement with Advent International on September 7, 2023,
to acquire a majority stake in Grupo CRM, a premium chocolate player in
Brazil. The transaction is expected to close in 2024, subject to customary
regulatory approvals.
Zone North America
· 8.0% organic growth: -0.9% RIG; 8.9% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2023 9M-2022 M&A exchange Growth
Zone North America CHF 19.0 bn CHF 19.1 bn -0.9% 8.9% 8.0% -2.2% -6.1% -0.3%
Organic growth was 8.0%, with pricing of 8.9%. RIG was -0.9%, reflecting
portfolio optimization actions and capacity constraints. Net divestitures
reduced sales by 2.2%, 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 6.1%. Reported sales in Zone North
America decreased by 0.3% to CHF 19.0 billion.
Zone North America maintained broad-based growth across most brands and
categories, despite a challenging consumer environment. Growth was driven by
pricing, favorable mix as well as strong momentum in e-commerce across
categories and out-of-home channels. The Zone saw market share gains in pet
food, soluble and portioned coffee, as well as frozen meals.
By product category, Purina PetCare was the largest growth contributor, with
broad-based demand across brands, segments and channels, particularly
e-commerce. In July, the Zone launched Tidy Care, a new range of litter
products to enhance comfort and monitor cat health, with strong initial
demand. Sales for Nestlé Professional and Starbucks out-of-home continued to
grow at a strong double-digit rate, led by new customer acquisition and
e-commerce momentum. The beverages category, including Starbucks products,
Coffee mate and Nescafé, posted mid single-digit growth. Gerber baby food
reported mid single-digit growth, led by healthy snacking and infant cereals.
Nido fortified milks reported strong double-digit growth, driven by
distribution expansion. Confectionery in Canada recorded double-digit growth,
fueled by KitKat. Growth in frozen food was negative, impacted by the
winding down of the frozen meals and pizza business in Canada. In the U.S.,
growth in frozen food was positive, with robust growth and market share gains
for mainstream pizza brands Jack's and Tombstone. Water saw a sales decrease,
as temporary capacity constraints for Perrier continued to outweigh strong
growth for S.Pellegrino and Acqua Panna.
Zone Europe
· 8.8% organic growth: -2.3% RIG; 11.1% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2023 9M-2022 M&A exchange Growth
Zone Europe CHF 14.1 bn CHF 14.0 bn -2.3% 11.1% 8.8% -2.4% -5.2% 1.3%
Organic growth was 8.8%, with pricing of 11.1%. RIG was -2.3%, following
capacity constraints and portfolio optimization actions. Foreign exchange
negatively impacted sales by 5.2%. Net divestitures reduced sales by 2.4%.
Reported sales in Zone Europe increased by 1.3% to CHF 14.1 billion.
Growth in Zone Europe was supported by pricing, strong sales development for
e-commerce and continued momentum for out-of-home channels. The Zone saw
market share gains in pet food 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. Coffee saw mid single-digit growth, with particular strength for
Nescafé. In September, the Zone launched Nescafé Dolce Gusto Neo paper-based
pods in France and Switzerland. Confectionery reported high single-digit
growth, with continued market share gains for KitKat. Nestlé Professional
posted double-digit growth, led by beverages. Infant Nutrition recorded high
single-digit growth, based on continued momentum for premium infant formula,
particularly NAN and BEBA. Culinary posted mid single-digit growth, with
robust sales developments for Maggi and Thomy. In the third quarter, the
transaction to create a frozen pizza joint venture in Europe was completed.
Sales growth in water was flat, as strong growth for S.Pellegrino and Acqua
Panna was offset by the impact of temporary capacity constraints for Perrier.
Zone Asia, Oceania and Africa (AOA)
· 8.6% organic growth: 0.0% RIG; 8.6% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2023 9M-2022 M&A exchange Growth
Zone AOA CHF 13.2 bn CHF 13.9 bn 0.0% 8.6% 8.6% -0.1% -13.3% -4.8%
Organic growth was 8.6%, with flat RIG. Pricing increased to 8.6%, with
broad-based contributions from all geographies and categories. Foreign
exchange reduced sales by 13.3%. Reported sales in Zone AOA decreased by 4.8%
to CHF 13.2 billion.
Growth in Zone AOA was supported by pricing as well as continued momentum of
e-commerce and out-of-home channels. The Zone saw market share gains in
coffee, cocoa and malt beverages as well as chocolate.
South-East Asia posted mid single-digit growth, with strong sales developments
in the Philippines, Malaysia and Thailand. South Asia recorded strong
double-digit growth across most categories. Growth in India was based on
continued distribution expansion and new product launches, with particularly
strong performance for KitKat and Nescafé. Middle East and Africa saw
double-digit growth, with particular strength for affordable offerings in
culinary, Infant Nutrition and coffee. Japan reported low single-digit growth,
with particular strength for KitKat based on innovation and gifting products.
South Korea posted high single-digit growth, fueled by Starbucks products.
Oceania recorded mid 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, with
continued strength for Maggi based on increased distribution and new product
launches. Coffee saw high single-digit growth, with robust demand for Nescafé
and Starbucks products and strong commercial execution. Ambient dairy posted
mid single-digit growth, driven by increased focus on value-added segments
following portfolio optimization actions. 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 high single-digit growth, fueled by strong momentum for KitKat.
Purina PetCare saw mid single-digit growth, led by Purina ONE, Supercoat and
Felix.
Zone Latin America
· 10.0% organic growth: -0.6% RIG; 10.5% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2023 9M-2022 M&A exchange Growth
Zone Latin America CHF 9.1 bn CHF 8.6 bn -0.6% 10.5% 10.0% 0.0% -4.3% 5.7%
Organic growth was 10.0%, with pricing of 10.5%. RIG was -0.6%, turning
slightly positive in the third quarter. Foreign exchange had a negative impact
of 4.3%. Reported sales in Zone Latin America increased by 5.7% to CHF 9.1
billion.
Zone Latin America recorded strong growth across all geographies and product
categories. Growth was 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 continued momentum for
confectionery, Infant Nutrition and beverages, including Nescafé and Nescau.
Mexico reported high single-digit growth, with strong sales developments for
dairy, coffee and Nestlé Professional.
By product category, confectionery was the largest growth contributor,
reflecting strong demand for KitKat and key local brands as well as new
product launches. Infant Nutrition saw double-digit growth, based on solid
momentum for NAN infant formula and Mucilon infant cereal. Coffee reported
broad-based double-digit growth, supported by Nescafé soluble coffee. Recent
launches such as Nescafé Dolce Gusto Neo and Nescafé Farmers Origins,
resonated strongly with consumers in Brazil. Dairy posted high single-digit
growth, supported by dairy culinary solutions and fortified milks. Sales for
Nestlé Professional grew at a strong double-digit rate, with continued
strength for branded coffee solutions. Culinary posted close to double-digit
growth, based on new product launches and continued traction for Recetas
Nestlé, the online recipe platform. Purina PetCare saw mid single-digit
growth, following a high base of comparison in 2022.
Zone Greater China
· 4.9% organic growth: 2.3% RIG; 2.6% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2023 9M-2022 M&A exchange Growth
Zone Greater China CHF 3.6 bn CHF 3.8 bn 2.3% 2.6% 4.9% 0.1% -10.6% -5.7%
Organic growth was 4.9%, with pricing of 2.6%. RIG was 2.3%. Foreign exchange
had a negative impact of 10.6%. Reported sales in Zone Greater China decreased
by 5.7% to CHF 3.6 billion.
Growth in Zone Greater China was supported by strong sales developments for
out-of-home businesses, e-commerce momentum 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. Confectionery recorded
high single-digit growth, led by Hsu Fu Chi and Shark wafer. Culinary posted
high single-digit growth, with increased demand for Totole in out-of-home
channels and innovation. Infant Nutrition saw low single-digit growth, led by
NAN specialty offerings. Coffee reported low single-digit growth, supported by
ready-to-drink offerings. Sales for Purina PetCare grew at a double-digit
rate, based on new product launches and the recent expansion of local
production.
Nestlé Health Science
· 2.5% organic growth: -1.9% RIG; 4.4% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2023 9M-2022 M&A exchange Growth
Nestlé Health Science CHF 4.9 bn CHF 4.8 bn -1.9% 4.4% 2.5% 3.8% -5.9% 0.5%
Organic growth was 2.5%, with pricing of 4.4%. RIG was -1.9%, impacted by a
short-term supply constraint in the third quarter for the vitamins, minerals
and supplements business. Net acquisitions increased sales by 3.8%, largely
related to the consolidation of Orgain. Foreign exchange negatively impacted
sales by 5.9%. Reported sales in Nestlé Health Science increased by 0.5% to
CHF 4.9 billion.
Vitamins, minerals and supplements saw negative growth. Sales in the third
quarter decreased following an IT integration issue when implementing highly
automated systems during the consolidation of U.S. packaging sites. The
resulting short-term supply constraints are expected to be resolved by early
2024. Market growth in the vitamins, minerals and supplements category has
returned to positive territory.
Active nutrition reported mid single-digit growth, with market share gains and
a robust sales development for Orgain and Vital Proteins.
Medical Nutrition recorded strong double-digit growth, with market share gains
across all segments. Growth was led by adult medical care products as well as
pediatric and allergy products. The gastrointestinal portfolio, including
Vowst and Zenpep, saw strong double-digit growth.
By geography, North America saw low single-digit growth. Europe reported high
single-digit growth. Other regions combined posted mid single-digit growth.
Nespresso
· 5.2% organic growth: 1.6% RIG; 3.5% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2023 9M-2022 M&A exchange Growth
Nespresso CHF 4.6 bn CHF 4.7 bn 1.6% 3.5% 5.2% -0.6% -5.7% -1.2%
Organic growth was 5.2%, with pricing of 3.5%. RIG was 1.6%, reaching 3.5% in
the third quarter. Foreign exchange negatively impacted sales by 5.7%.
Reported sales in Nespresso decreased by 1.2% to CHF 4.6 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 of the Momento system, particularly in the office segment.
Innovation continued to resonate with consumers, following the launch of home
compostable coffee capsules in France and Switzerland.
By geography, North America posted double-digit growth, with continued market
share gains. Europe reported positive growth. Other regions combined saw low
single-digit growth.
Business as a force for good: Creating economic opportunities for the world's
youth
Nestlé celebrates the tenth anniversary of Nestlé Needs YOUth this year. The
company launched this initiative at a time when youth unemployment in Europe
was at a record high. The goal was to help young people all over the continent
improve their employability and obtain employment. Since then, the program has
scaled to a global scope.
Nestlé helps youth become more employable by offering traineeships and
apprenticeships. Last year alone, the company provided nearly 11 500 such
opportunities. Nestlé also offers online training, career guidance,
mentorships and networking opportunities. Well over one million people took
part in digital events in 2022. While many trainees and apprentices take a
permanent position with Nestlé, the goal of the program is to equip them with
skills that can help them secure a job anywhere.
Employability remains a key pillar of the program today, but Nestlé has also
expanded it to include two additional dimensions: agripreneurship and
entrepreneurship. Supporting young farmers and entrepreneurs all over the
world is in line with the company's objectives to advance regenerative
agriculture and to develop innovative products and services.
With the average age of farmers now well into the 50s in many parts of the
world, Nestlé is also striving to make farming more attractive to young
people. Encouraging them to pursue a livelihood in farming is an opportunity
to embed regenerative agriculture methods, which are key to helping address
climate change. Through Nestlé's Agripreneurship Program, young farmers learn
how to run their farms as businesses from which they can make a decent living.
Nestlé provides them with access to training courses that include
regenerative farming topics like agroforestry, soil health and animal welfare.
In 2022, more than 5 000 young farmers participated in the program.
The ability to sustainably feed the world's growing population will be
determined not only by today's young farmers but also by today's young
innovators. Many of them have ideas in line with Nestlé's priorities - be
they related to regenerative agriculture, plant-based products, sustainable
packaging solutions, or nutrition. Through Nestlé's Youth Entrepreneurship
Platform (https://nestleyouthentrepreneurship.com/)
(https://nestleyouthentrepreneurship.com), the company empowers young people
to learn, develop new skills, test ideas and turn concepts into viable
business projects. It connects them to like-minded individuals and provides
them with access to experts, equipment and R&D labs.
Nestlé endeavors to scale this important work to have a greater impact.
That's why it founded the Global Alliance for YOUth
(https://www.globalallianceforyouth.org/)
(https://www.globalallianceforyouth.org) and brought together 24 other
like-minded companies that also provide training and first job opportunities
to young people. It has additionally partnered with UNESCO to help young
people in Latin America achieve positive social impact in their communities,
and it continuously looks for new opportunities to support more of the world's
youth.
Outlook
Full-year 2023 outlook confirmed: we expect organic sales growth between 7%
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%.
Annex
Nine-month sales overview by operating segment
Total Group Zone North America Zone Europe Zone AOA Zone Latin America Zone Greater China Nestlé Nespresso Other Businesses
Health
Science
Sales 9M-2023 (CHF m) 68 829 19 027 14 144 13 223 9 139 3 624 4 850 4 617 205
Sales 9M-2022 (CHF m) 69 132 19 093 13 968 13 899 8 648 3 843 4 811 4 674 196
Real internal growth (RIG) -0.6% -0.9% -2.3% 0.0% -0.6% 2.3% -1.9% 1.6% 8.3%
Pricing 8.4% 8.9% 11.1% 8.6% 10.5% 2.6% 4.4% 3.5% 1.5%
Organic growth 7.8% 8.0% 8.8% 8.6% 10.0% 4.9% 2.5% 5.2% 9.8%
Net M&A -0.8% -2.2% -2.4% -0.1% 0.0% 0.1% 3.8% -0.6% 0.0%
Foreign exchange -7.4% -6.1% -5.2% -13.3% -4.3% -10.6% -5.9% -5.7% -5.1%
Reported sales growth -0.4% -0.3% 1.3% -4.8% 5.7% -5.7% 0.5% -1.2% 4.7%
Nine-month sales overview by product
Total Group Powdered & liquid beverages Water Milk products & ice cream Nutrition & Health Science Prepared dishes & cooking aids Confec-tionery PetCare
Sales 9M-2023 (CHF m) 68 829 18 257 2 606 8 100 11 470 8 649 5 735 14 012
Sales 9M-2022 (CHF m) 69 132 18 461 2 776 8 267 11 625 9 152 5 640 13 211
Real internal growth (RIG) -0.6% -0.3% -6.9% -3.0% -0.8% -3.2% 2.2% 2.6%
Pricing 8.4% 7.0% 10.4% 9.6% 7.1% 8.5% 7.9% 10.4%
Organic growth 7.8% 6.7% 3.5% 6.6% 6.3% 5.3% 10.1% 13.1%
Contacts
Media
Christoph Meier
Tel.: +41 21 924 2200
mediarelations@nestle.com (mailto:mediarelations@nestle.com)
Investors
Luca Borlini
Tel.: +41 21 924 3509
ir@nestle.com (mailto:ir@nestle.com)
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