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25/04/2023 08:15
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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".
Total Group Zone North America Zone Europe Zone AOA Zone Latin America Zone Greater China Nestlé Nespresso Other Businesses
Health
Science
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%
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 RIG Pricing Organic growth Net Foreign Reported
3M-2023 3M-2022 M&A exchange Growth
Zone North America CHF 6.3 bn CHF 5.8 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 RIG Pricing Organic growth Net Foreign Reported
3M-2023 3M-2022 M&A exchange Growth
Zone Europe CHF 4.9 bn CHF 4.6 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 RIG Pricing Organic growth Net Foreign Reported
3M-2023 3M-2022 M&A exchange Growth
Zone AOA CHF 4.7 bn CHF 4.6 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 RIG Pricing Organic growth Net Foreign Reported
3M-2023 3M-2022 M&A exchange Growth
Zone Latin America CHF 3.0 bn CHF 2.7 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 RIG Pricing Organic growth Net Foreign Reported
3M-2023 3M-2022 M&A exchange Growth
Zone Greater China CHF 1.3 bn CHF 1.4 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 RIG Pricing Organic growth Net Foreign Reported
3M-2023 3M-2022 M&A Exchange growth
Nestlé Health Science CHF 1.6 bn CHF 1.4 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 RIG Pricing Organic growth Net Foreign Reported
3M-2023 3M-2022 M&A Exchange growth
Nespresso CHF 1.6 bn CHF 1.6 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 (mailto:mediarelations@nestle.com)
Investors
Luca Borlini
Tel.: +41 21 924 3509
ir@nestle.com (mailto:ir@nestle.com)
Annex
Three-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 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
Total Group Powdered & liquid beverages Water Milk products & ice cream Nutrition & Health Science Prepared dishes & cooking 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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