REG - Nestle SA Nestle Holdings Inc - Nestlé reports nine-month sales for 2024
17/10/2024 07:00
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RNS Number : 5748I Nestle SA 17 October 2024
Nestlé press release
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.......................................
[Ad hoc announcement pursuant to art. 53 SIX Listing Rules]
Vevey/Switzerland, October 17, 2024
Nestlé reports nine-month sales for 2024
· Organic growth was 2.0% for the first nine months, with positive real
internal growth (RIG).
o RIG was 0.5%, in an environment of softening consumer demand and actions
taken in the third quarter to reduce customer inventory.
o Pricing was 1.6%, reducing following unprecedented increases in the prior
two years.
· Total reported sales amounted to CHF 67.1 billion (9M-2023: CHF 68.8
billion), down 2.4%. Foreign exchange reduced sales by 4.1% and net
divestitures by 0.3%.
· Organizational and Executive Board changes announced to drive
performance and transformation (see separate press release).
· Full-year 2024 outlook updated: organic sales growth expected to be
around 2%. Underlying trading operating profit margin expected to be around
17.0%. Underlying earnings per share growth in constant currency expected to
be broadly flat.
Laurent Freixe, Nestlé CEO, commented: "We delivered organic sales growth,
driven by positive real internal growth. Consumer demand has weakened in
recent months, and we expect the demand environment to remain soft. Given this
outlook and our further actions to reduce customer inventories in the fourth
quarter, we have updated our full-year guidance, with organic sales growth
expected to be around 2%, in line with the first nine months.
Nestlé is uniquely positioned to win in our industry, given our global scale,
broad portfolio of iconic brands and innovative products that connect with
people every day and in every stage of their lives. Building on this strong
foundation, we will sharpen our focus on consumers and customers and advance
our categories to accelerate performance and gain market share. We will also
expand our digital transformation to enhance agility and efficiency. For our
brands to win in the market, we need to invest. We will generate the resources
we need through efficiencies and growth leverage. Disciplined in-market
execution will drive Nestlé's virtuous circle to sustain profitable growth
over time, and we have exceptional people to make this happen.
Today's organizational changes will align Nestlé, bringing simplicity and
focus. I look forward to sharing more of our plans at our Capital Markets Day
in November."
Total Group Zone North America Zone Europe Zone Zone Latin America Zone Greater China Nestlé Other Businesses
AOA Health
Science Nespresso
Sales 9M-2024 (CHF m) 67 148 18 524 13 900 12 542 8 913 3 550 4 915 4 586 218
Sales 9M-2023 (CHF m) 68 829 19 027 14 144 13 223 9 139 3 624 4 850 4 617 205
Real internal growth (RIG) 0.5% -0.9% 0.8% 0.8% -0.7% 3.9% 3.0% 1.3% 8.6%
Pricing 1.6% 0.6% 2.5% 2.8% 2.5% -1.5% 0.8% 0.5% 1.3%
Organic growth 2.0% -0.3% 3.3% 3.6% 1.9% 2.5% 3.8% 1.8% 9.8%
Net M&A -0.3% 0.0% -2.2% 0.0% 0.0% 0.2% 0.5% 0.2% 0.0%
Foreign exchange -4.1% -2.3% -2.9% -8.7% -4.2% -4.7% -3.0% -2.6% -3.3%
Reported sales growth -2.4% -2.6% -1.8% -5.2% -2.3% -2.0% 1.3% -0.7% 6.6%
Group sales
Organic growth was 2.0% for the nine months, similar to the 2.1% achieved in
the first half. RIG was 0.5%, impacted by soft consumer demand and consumer
hesitancy towards global brands, linked to geopolitical tension. Additionally
in the third quarter, RIG was negatively impacted by approximately 60 basis
points by actions taken to reduce customer inventory, mainly in the Americas.
Pricing was 1.6%, continuing to normalize following unprecedented increases in
the prior two years. In third quarter, pricing increases in confectionery and
coffee linked to higher input costs were partly offset by the impact of
promotional activity in PetCare and dairy. By geography, organic growth was
driven by emerging markets and Europe, which together more than offset a
slight decrease in North America. In developed markets, organic growth was
1.1%, with positive pricing and RIG. In emerging markets, organic growth was
3.5%, led by pricing with positive RIG.
Organic growth by product category:
§ Coffee was the largest growth contributor with mid single-digit growth,
supported by the three leading coffee brands, Nescafé, Starbucks and
Nespresso.
§ Purina PetCare delivered low single-digit growth, driven by continued
momentum for science-based premium brands Purina ProPlan, Purina ONE and
Fancy Feast.
§ Sales in confectionery grew at a mid single-digit rate, led by KitKat and
key local brands.
§ Nestlé Health Science posted low single-digit growth. The recovery plan is
on track, with double-digit growth in the third quarter.
§ Water delivered mid single-digit growth, underpinned by continued momentum
for S.Pellegrino and a recovery in Perrier.
§ Infant Nutrition sales grew at a low single-digit rate, supported by
continued momentum for NAN, Lactogen and human milk oligosaccharides (HMOs)
products.
§ Dairy posted negative growth, as a decline in coffee creamers and ambient
dairy more than offset growth for affordable milks and dairy culinary
solutions.
§ Culinary reported negative growth, driven by a decline for frozen food in
North America, while growth for Maggi was robust.
By channel, organic growth in retail sales was 1.9%. Organic growth of
out-of-home channels was 3.4%. E-commerce sales grew organically by 9.7%,
reaching 18.5% of total Group sales.
Net divestitures impacted sales by 0.3%, largely related to the creation in
2023 of a joint venture with PAI Partners for Nestlé's frozen pizza business
in Europe. The impact on sales from foreign exchange was negative at -4.1%.
Total reported sales decreased by 2.4% to CHF 67.1 billion.
Zone North America
· 9M-2024: -0.3% organic growth: -0.9% RIG; 0.6% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2024 9M-2023 M&A exchange Growth
Zone North America CHF 18.5 bn CHF 19.0 bn -0.9% 0.6% -0.3% 0.0% -2.3% -2.6%
Organic growth was -0.3%. RIG was -0.9%, but remained positive in the third
quarter, supported by strong growth in e-commerce and specialty channels. As
previously highlighted, RIG in the second and third quarter was impacted by
phasing in customer inventory related to some retailer promotional campaigns,
which negatively impacted growth in the third quarter by approximately 100
basis points. Pricing was 0.6%, but was negative in the third quarter, with
the promotional environment returning to pre-Covid levels. Foreign exchange
had a negative impact of 2.3%. Reported sales decreased by 2.6% to CHF 18.5
billion. The Zone drove market share gains in pet food and coffee, with losses
in frozen pizza and coffee creamers.
By product category, Purina PetCare was the largest growth contributor with
low single-digit growth, led by Purina Pro Plan, Fancy Feast and Friskies.
Sales of confectionery grew at a mid single-digit rate, led by Tollhouse
baking products. Water delivered low single-digit growth, driven by sustained
momentum for S.Pellegrino and the launch of Maison Perrier. Growth for the
beverages category was positive, with continued momentum for Starbucks and
Nescafé offsetting a sales decrease in Coffee mate. Infant Nutrition saw a
sales decrease, driven by a category slowdown that impacted Gerber baby food,
more than offsetting robust growth for Nido growing up milks. Frozen food saw
negative growth, with the category continuing to see intense competition,
particularly in pizza.
Zone Europe
· 9M-2024: 3.3% organic growth: 0.8% RIG; 2.5% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2024 9M-2023 M&A exchange Growth
Zone Europe CHF 13.9 bn CHF 14.1 bn 0.8% 2.5% 3.3% -2.2% -2.9% -1.8%
Organic growth was 3.3%. RIG was 0.8%, turning slightly negative in the third
quarter, reflecting softness in consumer demand and temporary retailer
delistings. Pricing was 2.5%. Foreign exchange reduced sales by 2.9% and net
divestitures by 2.2%. Reported sales decreased by 1.8% to CHF 13.9 billion.
The Zone delivered market share gains in pet food and portioned coffee, with
share losses in confectionery and water.
By product category, the largest contributor to growth was Purina PetCare,
which delivered mid single-digit growth, driven by premium brands Purina ONE,
Gourmet and Pro Plan. Coffee delivered mid single-digit growth, led by
Nescafé soluble coffee and Starbucks products. Confectionery posted mid
single-digit growth, fueled by continued momentum for KitKat and key local
brands. Sales in water grew at a low single-digit rate, supported by the
relaunch of Perrier. Nestlé Professional delivered mid single-digit growth,
led by beverage solutions. Infant Nutrition posted slightly negative growth,
reflecting a category slowdown. Culinary reported slightly negative growth.
Zone Asia, Oceania and Africa (AOA)
· 9M-2024: 3.6% organic growth: 0.8% RIG; 2.8% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2024 9M-2023 M&A exchange Growth
Zone AOA CHF 12.5 bn CHF 13.2 bn 0.8% 2.8% 3.6% 0.0% -8.7% -5.2%
Organic growth was 3.6%. RIG was 0.8%, reflecting ongoing consumer hesitancy
toward global brands, linked to geopolitical tensions. Pricing was 2.8%.
Foreign exchange reduced sales by 8.7%. Reported sales decreased by 5.2% to
CHF 12.5 billion. By geography, the key growth drivers were Central and West
Africa, the Philippines and Thailand. The Zone achieved market share gains in
confectionery, with losses in dairy and culinary.
By product category, coffee delivered mid single-digit growth, driven by
Nescafé, particularly in ready-to-drink offerings. Culinary delivered high
single-digit growth, fueled by strong sales momentum and innovation for Maggi
cooking solutions. Sales in Infant Nutrition grew at a mid single-digit rate,
with continued momentum for NAN and S-26 as well as the affordable nutrition
range Lactogen. Sales for Nestlé Professional grew at a high single-digit
rate across most geographies and categories, underpinned by customer
acquisition. Confectionery reported low single-digit growth, with continued
momentum for KitKat supported by new product launches. Purina PetCare
delivered mid single-digit growth, led by Felix and Purina One. Dairy posted
slightly positive growth.
Zone Latin America
· 9M-2024: 1.9% organic growth: -0.7% RIG; 2.5% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2024 9M-2023 M&A exchange Growth
Zone Latin America CHF 8.9 bn CHF 9.1 bn -0.7% 2.5% 1.9% 0.0% -4.2% -2.3%
Organic growth was 1.9%. RIG was -0.7%, becoming more negative in the third
quarter, reflecting soft consumer demand and customer inventory reductions.
Pricing was 2.5%. Foreign exchange had a negative impact of 4.2%. Reported
sales decreased by 2.3% to CHF 8.9 billion. Growth in the Zone was driven by
robust sales momentum in Brazil and Mexico, partially offset by weaker
performance in other markets. The Zone achieved market share gains in
chocolate, portioned coffee and culinary, with losses in dairy and soluble
coffee.
By product category, confectionery grew at a mid single-digit rate, driven by
key local brands, particularly Garoto as well as KitKat. Nestlé Professional
grew at a sustained double-digit rate, fueled by continued customer expansion.
Culinary delivered low single-digit growth, driven by Maggi. Coffee posted low
single-digit growth, led by Nescafé, with strong growth for Nescafé Dolce
Gusto. Purina PetCare posted flat growth, supported by Felix and Friskies.
Infant Nutrition and dairy posted negative growth, with robust demand for NAN
infant formula more than offset by a sales decline in Nido.
Zone Greater China
· 9M-2024: 2.5% organic growth: 3.9% RIG; -1.5% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2024 9M-2023 M&A exchange Growth
Zone Greater China CHF 3.6 bn CHF 3.6 bn 3.9% -1.5% 2.5% 0.2% -4.7% -2.0%
Organic growth was 2.5%. RIG was 3.9%, increasing in the third quarter
supported by new product launches and by improved momentum in Infant
Nutrition. Pricing was
-1.5%, reflecting a low inflation environment for the food & beverage
industry. Foreign exchange had a negative impact of 4.7%. Reported sales
decreased by 2.0% to CHF 3.6 billion. The Zone drove market share gains in
soluble coffee, Infant Nutrition and confectionery, with losses in culinary
and dairy.
By product category, Infant Nutrition was the largest contributor to growth,
with mid single-digit growth, driven by NAN and improved sales for illuma.
Coffee delivered high single-digit growth, driven by Nescafé ready-to-drink
and soluble offerings. Sales of confectionery grew at a mid single-digit rate,
driven by Shark Wafer and KitKat. Nestlé Professional and Culinary reported
positive growth, with a slow-down for out-of-home channels. Sales in Purina
PetCare continued to grow at a double-digit rate, building on new product
launches and continued e-commerce momentum for Purina Pro Plan and Friskies.
Dairy posted negative growth, reflecting a sharp market slowdown in
dairy-based categories.
Nestlé Health Science
· 9M-2024: 3.8% organic growth: 3.0% RIG; 0.8% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2024 9M-2023 M&A exchange Growth
Nestlé Health Science CHF 4.9 bn CHF 4.9 bn 3.0% 0.8% 3.8% 0.5% -3.0% 1.3%
Organic growth was 3.8%, and reached double digits in the third quarter. RIG
was 3.0%, accelerating strongly in the third quarter driven by increased
product availability. Net acquisitions increased sales by 0.5%. Foreign
exchange negatively impacted sales by 3.0%. Reported sales increased by 1.3%
to CHF 4.9 billion. By geography, North America delivered low single-digit
growth. Europe delivered high single-digit growth, while other regions
combined saw positive growth.
Growth in vitamins, minerals and supplements was broadly flat in the first
nine months, with double-digit growth in the third quarter. The recovery plan
is on-track, and the business has started retaking market share. Active
nutrition saw low single-digit growth, with strong sales contribution from
Orgain. Medical Nutrition delivered close to double-digit growth, with
continued market share gains. Growth was driven by strong sales momentum for
adult medical care products, particularly Peptamen, Resource and Vitaflo.
Sales for gastrointestinal products continued to grow at a double-digit rate.
Nespresso
· 9M-2024: 1.8% organic growth: 1.3% RIG; 0.5% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
9M-2024 9M-2023 M&A exchange Growth
Nespresso CHF 4.6 bn CHF 4.6 bn 1.3% 0.5% 1.8% 0.2% -2.6% -0.7%
Organic growth was 1.8%. RIG was 1.3%. Pricing was 0.5%. Foreign exchange
negatively impacted sales by 2.6%. Reported sales decreased by 0.7% to
CHF 4.6 billion. By geography, sales in North America grew at a mid
single-digit rate with market share gains. Europe posted slightly negative
growth in a market that remains competitive.
Growth was driven by the Vertuo system, with continued broad-based sales
momentum. Out-of-home channels continued to generate robust growth, fuelled by
the further adoption of the Momento system.
Outlook
Full-year 2024 outlook updated: Given the consumer environment and further
actions to reduce customer inventories in the fourth quarter, full-year
guidance has been updated. Organic sales growth is now expected to be around
2%, in line with the first nine months. Underlying trading operating profit
margin is expected to be at around 17.0%. Underlying earnings per share growth
in constant currency is expected to be broadly flat.
Contacts
Media
Christoph Meier
Tel.: +41 21 924 2200
mediarelations@nestle.com
Investors
David Hancock
Tel.: +41 21 924 3509
ir@nestle.com
Annex
Nine-month sales overview by operating segment
Total Group Zone North America Zone Europe Zone Zone Latin America Zone Greater China Nestlé .Health Other Businesses
AOA Science
Nespresso
Sales 9M-2024 (CHF m) 67 148 18 524 13 900 12 542 8 913 3 550 4 915 4 586 218
Sales 9M-2023 (CHF m) 68 829 19 027 14 144 13 223 9 139 3 624 4 850 4 617 205
Real internal growth (RIG) 0.5% -0.9% 0.8% 0.8% -0.7% 3.9% 3.0% 1.3% 8.6%
Pricing 1.6% 0.6% 2.5% 2.8% 2.5% -1.5% 0.8% 0.5% 1.3%
Organic growth 2.0% -0.3% 3.3% 3.6% 1.9% 2.5% 3.8% 1.8% 9.8%
Net M&A -0.3% 0.0% -2.2% 0.0% 0.0% 0.2% 0.5% 0.2% 0.0%
Foreign exchange -4.1% -2.3% -2.9% -8.7% -4.2% -4.7% -3.0% -2.6% -3.3%
Reported sales growth -2.4% -2.6% -1.8% -5.2% -2.3% -2.0% 1.3% -0.7% 6.6%
Nine-month sales overview by product
Total Group Powdered Water Milk products & ice cream Nutrition Prepared dishes & cooking aids Confec-tionery PetCare
& liquid beverages & Health Science
Sales 9M-2024 (CHF m) 67 148 17 952 2 474 7 648 11 313 7 826 5 920 14 015
Sales 9M-2023 (CHF m) 68 829 18 257 2 606 8 100 11 470 8 649 5 735 14 012
Real internal growth (RIG) 0.5% 1.3% -0.8% -0.8% 0.8% -2.2% 0.7% 1.8%
Pricing 1.6% 1.7% 3.7% 0.1% 1.3% 0.5% 5.1% 1.2%
Organic growth 2.0% 3.0% 3.0% -0.7% 2.1% -1.6% 5.8% 3.0%
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