REG - Nestle SA Nestle Holdings Inc - Nestlé reports three-month sales for 2024
25/04/2024 07:15
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RNS Number : 0036M Nestle SA 25 April 2024
[Ad hoc announcement pursuant to art. 53 SIX Listing Rules]
Nestlé Press Release
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Vevey, April 25, 2024
Nestlé reports three-month sales for 2024
· Organic growth of 1.4%, with pricing of 3.4% and real internal growth
(RIG) of
-2.0%.
· Total reported sales were CHF 22.1 billion, a decrease of 5.9%
(3M-2023: CHF 23.5 billion). Foreign exchange decreased sales by 6.7%. Net
divestitures had a negative impact of 0.6%.
· Overall, organic sales growth for the Group was driven by Europe and
emerging markets, with a negative impact from North America.
· Full-year 2024 outlook confirmed: we expect organic sales growth of
around 4% and a moderate increase in the underlying trading operating profit
margin. Underlying earnings per share in constant currency is expected to
increase between 6% and 10%.
Mark Schneider, Nestlé CEO, commented:
"We had expected a slow start and see a strong rebound in RIG in the second
quarter with reliable delivery for the remainder of the year. A wide range of
growth initiatives across the Group are now starting to deliver.
In North America, we have stepped up our innovation intensity and commercial
activities, primarily in frozen food, which lost ground in the first quarter.
The integration plan for Nestlé Health Science's vitamins, minerals and
supplements business is on track, with the turning point expected in the
second quarter and strong growth thereafter.
Nestlé's top priorities remain to execute with excellence, leverage our
science and nutrition expertise and drive growth with our billionaire brands.
We reiterate our 2024 guidance and look ahead with confidence."
Total Group Zone North America Zone Europe Zone Zone Latin America Zone Greater China Nestlé .Health Nespresso Other Businesses
AOA
Science
Sales 3M-2024 (CHF m) 22 092 5 823 4 642 4 240 3 072 1 233 1 511 1 503 68
Sales 3M-2023 (CHF m) 23 470 6 312 4 881 4 681 3 032 1 311 1 617 1 567 69
Real internal growth (RIG) -2.0% -5.8% -0.2% -0.4% -0.8% 2.1% -3.6% -0.2% 3.0%
Pricing 3.4% 3.3% 4.6% 4.1% 3.9% 1.5% 1.9% 1.2% 1.7%
Organic growth 1.4% -2.5% 4.4% 3.6% 3.1% 3.7% -1.8% 1.0% 4.7%
Net M&A -0.6% 0.1% -3.6% -0.1% -0.1% 0.2% 0.7% 0.1% 0.0%
Foreign exchange -6.7% -5.3% -5.8% -13.0% -1.5% -9.8% -5.6% -5.1% -5.9%
Reported sales growth -5.9% -7.7% -5.0% -9.4% 1.5% -5.9 % -6.6% -4.1% -1.2%
Group sales
Organic growth was 1.4%. Pricing was 3.4%, following a high base of comparison
in 2023. RIG was -2.0%, impacted by soft consumer demand, particularly in
North America, and the temporary supply constraints for vitamins, minerals and
supplements.
By geography, organic growth was driven by Europe and emerging markets, which
more than offset a sales decrease in North America. In developed markets,
organic growth was -0.4%, with negative RIG and positive pricing. In emerging
markets, organic growth was 4.1%, led by pricing with slightly negative RIG.
By product category:
· Purina PetCare was the largest contributor to organic growth,
fueled by continued momentum for science-based premium brands, Purina ONE,
Fancy Feast and Friskies.
· Coffee delivered low single-digit growth, with continued momentum
for Nescafé, Nespresso and Starbucks.
· Sales in Confectionery grew at a mid single-digit rate, with strong
growth for KitKat and seasonal products.
· Water delivered mid single-digit growth, underpinned by the rebound
in Perrier and continued momentum for S.Pellegrino.
· Infant Nutrition sales grew at a low single-digit rate, based on
continued momentum for NAN and human milk oligosaccharides (HMOs) products.
· As expected, Nestlé Health Science recorded negative growth, with
robust demand for Medical Nutrition more than offset by the temporary supply
constraints for vitamins, minerals and supplements.
· Dairy posted negative growth, following a high base of comparison
in the prior year.
· Culinary posted negative growth, as strong demand for Maggi was
more than offset by a sales decline for frozen food in North America.
By channel, organic growth in retail sales remained robust at 1.4%. E-commerce
sales grew by 6.1%, reaching 17.4% of total Group sales. Organic growth of
out-of-home channels was 2.0%.
Net divestitures decreased sales by 0.6%, largely related to the creation 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 6.7%. Total reported
sales decreased by 5.9% to CHF 22.1 billion.
Zone North America
· -2.5% organic growth: -5.8% RIG; 3.3% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
3M-2024 3M-2023 M&A exchange Growth
Zone North America CHF 5.8 bn CHF 6.3 bn -5.8% 3.3% -2.5% 0.1% -5.3% -7.7%
Organic growth was -2.5%. Pricing moderated to 3.3%, following a high base of
comparison in 2023. RIG was -5.8%, primarily driven by a decline in frozen
food. Foreign exchange had a negative impact of 5.3%. Reported sales in Zone
North America decreased by 7.7% to CHF 5.8 billion. The Zone saw market share
gains in Purina PetCare and Coffee, with losses in frozen pizza and coffee
creamers.
By product category, Purina PetCare was the largest growth contributor, with
broad-based demand, particularly in e-commerce. Fancy Feast, Friskies and
Purina One all delivered strong growth. Water sales grew at a mid single-digit
rate, with strong momentum for S.Pellegrino and Acqua Panna. The beverages
category posted a sales decrease, as robust growth for Starbucks, Nescafé and
Seattle's Best was more than offset by negative growth for Coffee mate with a
high base of comparison in the prior year. Infant Nutrition saw a sales
decrease, as strong growth for Nido growing up milks was more than offset by
declines for Gerber baby food. Growth in frozen food was negative, reflecting
soft consumer demand for the category and intense price competition,
particularly in frozen pizza and snacks, as well as the winding down of the
frozen meals business in Canada, which is near completion.
Zone Europe
· 4.4% organic growth: -0.2% RIG; 4.6% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
3M-2024 3M-2023 M&A exchange Growth
Zone Europe CHF 4.6 bn CHF 4.9 bn -0.2% 4.6% 4.4% -3.6% -5.8% -5.0%
Organic growth was 4.4%, with pricing of 4.6% and RIG of -0.2%. Foreign
exchange negatively impacted sales by 5.8%. Net divestitures reduced sales by
3.6%. Reported sales in Zone Europe decreased by 5.0% to CHF 4.6 billion.
Growth was broad-based across geographies and categories. The Zone saw market
share gains in pet food and Infant Nutrition, with slowing market share losses
in water.
By product category, the key contributor to growth was Purina PetCare, driven
by premium brands Purina One, Felix and Gourmet. Sales in Coffee grew at a mid
single-digit rate, with strong contributions by Nescafé and Starbucks
products. Confectionery saw mid single-digit growth, with strong demand for
KitKat and seasonal products. In January, the Zone launched KitKat Breaks for
Good, the first chocolate bar made with cocoa sourced from farming families
supported by Nestlé's income accelerator program. Water recorded mid
single-digit growth, underpinned by a sales rebound for Perrier. Culinary
sales grew at a low single-digit rate, led by Maggi, which expanded
distribution for its noodles portfolio. Infant Nutrition saw low single-digit
growth, following a high base of comparison in 2023.
Zone Asia, Oceania and Africa (AOA)
· 3.6% organic growth: -0.4% RIG; 4.1% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
3M-2024 3M-2023 M&A exchange Growth
Zone AOA CHF 4.2 bn CHF 4.7 bn -0.4% 4.1% 3.6% -0.1% -13.0% -9.4%
Organic growth was 3.6%, with pricing of 4.1% and RIG of -0.4%. Foreign
exchange reduced sales by 13.0%, impacted by significant currency
depreciation. As a result, reported sales in Zone AOA decreased by 9.4% to CHF
4.2 billion. By geography, the key growth drivers were Central and West
Africa, India and the Philippines. In these markets, affordable offerings
fueled growth, led by Maggi, Lactogen and Nescafé. The Zone saw market share
gains in confectionery, coffee and pet food, with losses in dairy.
By product category, Infant Nutrition was the largest growth contributor, led
by NAN and Lactogen. Culinary achieved high single-digit growth, fueled by
distribution expansion and innovation for Maggi across product segments.
Coffee delivered mid single-digit growth, with continued robust demand for
Nescafé. Sales in Nestlé Professional grew at a high single-digit rate
across geographies and categories, fueled by distribution expansion.
Confectionery reported low single-digit growth, with strong momentum for
KitKat. Dairy posted close to flat growth.
Zone Latin America
· 3.1% organic growth: -0.8% RIG; 3.9% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
3M-2024 3M-2023 M&A exchange Growth
Zone Latin America CHF 3.1 bn CHF 3.0 bn -0.8% 3.9% 3.1% -0.1% -1.5% 1.5%
Organic growth was 3.1%, with pricing of 3.9% and RIG of -0.8%. Foreign
exchange had a negative impact of 1.5%. Net divestitures decreased sales by
0.1%. On March 1(st) 2024, the Group completed the acquisition of a majority
stake in Grupo CRM, a premium chocolate player in Brazil. Reported sales in
Zone Latin America increased by 1.5% to CHF 3.1 billion. Growth was led by
Brazil, with continued momentum for Garoto, KitKat and Nescafé. Mexico
delivered low single-digit growth, based on strong sales momentum for Purina
PetCare, La Lechera and Carlos V. The Zone achieved market share gains in pet
food, Infant Nutrition, and portioned coffee, with losses in dairy, following
portfolio optimization.
By product category, confectionery was the largest growth contributor, with
strong momentum for KitKat and key local brands. Sales for Nestlé
Professional grew at a double-digit rate, with continued customer expansion.
Culinary delivered low single-digit growth, based on strong demand and
distribution expansion for Maggi. Purina PetCare saw low single-digit growth,
supported by Alpo and Felix. Dairy sales grew at a low single-digit rate, with
strong growth for La Lechera. Infant Nutrition and Coffee posted sales
decreases, following a high base of comparison in 2023.
Zone Greater China
· 3.7% organic growth: 2.1% RIG; 1.5% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
3M-2024 3M-2023 M&A exchange Growth
Zone Greater China CHF 1.2 bn CHF 1.3 bn 2.1% 1.5% 3.7% 0.2% -9.8% -5.9%
Organic growth was 3.7%, with pricing of 1.5% and RIG of 2.1%. Foreign
exchange had a negative impact of 9.8%. Reported sales in Zone Greater China
decreased by 5.9% to CHF 1.2 billion. Growth was driven by continued momentum
in out-of-home and e-commerce channels. The Zone saw market share gains in
soluble coffee, confectionery, and pet food, with losses for Wyeth infant
nutrition products.
By product category, confectionery was the largest growth contributor, led by
Hsu Fu Chi and Shark Wafer. Nestlé Professional achieved double-digit growth,
fueled by innovation and customer acquisition. Coffee delivered mid-single
digit growth, driven by Nescafé ready-to-drink offerings. Sales for Purina
PetCare grew at a double-digit rate, based on new product launches and strong
e-commerce momentum, particularly for Pro Plan and Fancy Feast. Infant
Nutrition saw positive growth, with continued strong demand for NAN, which
more than offset a sales decline for Wyeth products. Culinary posted slightly
negative growth, as positive sales trends in out-of-home channels were more
than offset by a decrease in retail sales.
Nestlé Health Science
· -1.8% organic growth: -3.6% RIG; 1.9% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
3M-2024 3M-2023 M&A Exchange growth
Nestlé Health Science CHF 1.5 bn CHF 1.6 bn -3.6% 1.9% -1.8% 0.7% -5.6% -6.6%
Organic growth was -1.8%, with pricing of 1.9%. RIG was -3.6%, impacted, as
expected, by the temporary supply constraints for the vitamins, minerals and
supplements business. Net acquisitions increased sales by 0.7%. Foreign
exchange negatively impacted sales by 5.6%. Reported sales in Nestlé Health
Science decreased by 6.6% to CHF 1.5 billion. By geography, Europe reported
mid single-digit growth, while other regions combined posted negative growth.
Vitamins, minerals and supplements posted negative growth, reflecting the
continued impact of supply constraints encountered in the second half of 2023.
The integration plan is on track, and the constraints are expected to be
resolved by the end of the first half of 2024. Pure Encapsulations, which was
not affected by the supply issue, continued to deliver strong double-digit
growth. Active Nutrition posted negative growth. Medical Nutrition delivered
mid single-digit growth and continued to gain market share. Growth was driven
by strong sales momentum for adult medical care products and Vitaflo. Sales
for gastrointestinal products continued to grow at a double-digit rate.
Nespresso
· 1.0% organic growth: -0.2% RIG; 1.2% pricing.
Sales Sales RIG Pricing Organic growth Net Foreign Reported
3M-2024 3M-2023 M&A Exchange growth
Nespresso CHF 1.5 bn CHF 1.6 bn -0.2% 1.2% 1.0% 0.1% -5.1% -4.1%
Organic growth was 1.0%, with pricing of 1.2%. RIG was -0.2%, impacted by the
phasing of commercial activities. Foreign exchange negatively impacted sales
by 5.1%. Reported sales in Nespresso decreased by 4.1% to CHF 1.5 billion. By
geography, sales in North America grew at a mid single-digit rate, with market
share gains. Europe posted slightly negative growth.
Growth was driven by the Vertuo system, which continued to generate
broad-based momentum. Growth in out-of-home channels was also robust, fueled
by further adoption of the Momento system. Innovation continued to resonate
with consumers, based on new limited editions, particularly Pierre Hermé and
Maple Pecan.
Business as a force for good: Nespresso's integrated approach to
sustainability
Nespresso stands for truly outstanding coffee, brewed with matchless
convenience. Since the beginning, the business has understood that delivering
exceptional taste to consumers should go hand-in-hand with a true commitment
to sustainability: from coffee growing all the way to delivering a superb
brew. Nespresso uses just the right amount of coffee, water and energy for
each cup, while also helping to improve the livelihoods of coffee farmers and
protect the environment. Today, Nespresso is recognized as one of the top 100
brands in the world by Interbrand, a global brand consultancy. The business
embeds its sustainable production and consumption initiatives in its
communication and engagement with its consumers.
Having achieved B Corp certification in 2022, Nespresso is part of a global
community of businesses that meet high standards of social and environmental
performance, accountability and transparency.
The business's sustainability work focuses on two key aspects: its supply
chain and end-of-life management of used materials.
The Nespresso AAA Sustainable Quality Program supports coffee farmers in
implementing best agriculture practices, improving their productivity, and
producing higher-quality coffee. Co-created with the Rainforest Alliance, the
program celebrated its 20th anniversary last year and is building on its
experience and helping farmers transition to regenerative agriculture.
With over 95% of its green coffee being priced above the Fairtrade
International minimum, Nespresso is helping provide AAA coffee farmers with a
stable income. It is also scaling up a crop insurance program to give farmers
a safety net when impacted by weather events. The business additionally works
with partners to revive coffee production in origins that have suffered from
natural disasters or conflicts, including in Cuba, the Democratic Republic of
Congo, Puerto Rico and Uganda.
Nespresso has also taken great strides in reducing waste. It uses at least 80%
recycled aluminum content in its Original and Vertuo capsules and is expanding
its RELOVE refurbished machine program to more countries. Since 2014,
Nespresso has invested significantly in its recycling programs globally to
make recycling easier and more convenient. Today, more than 90% of Nespresso
aluminum capsules are purchased by consumers with access to a convenient
recycling option. The business has worked with various partners to showcase
creations using recycled coffee capsules, for instance, Hublot watch
(https://www.nespresso.com/ch/en/hublot) es, Caran d'Ache ball pens
(https://www.nespresso.com/ch/en/order/accessories/original/caran-dache-ballpen-849)
, or e-bikes from start-up Miloo
(https://www.nespresso.com/ch/en/nespresso-miloo) . Most recently, Nespresso
introduced a new range of paper-based home compostable coffee capsules.
With the conviction that coffee can make a positive impact on people and
planet, Nespresso will continue to be a pioneer in turning sustainable
practices into a superior coffee experience for consumers.
Outlook
Full-year 2024 outlook confirmed: we expect organic sales growth of around 4%
and a moderate increase in the underlying trading operating profit margin.
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
Three-month sales overview by operating segment
Total Group Zone North America Zone Europe Zone Zone Latin America Zone Greater China Nestlé Nespresso Other Businesses
AOA
.Health
Science
Sales 3M-2024 (CHF m) 22 092 5 823 4 642 4 240 3 072 1 233 1 511 1 503 68
Sales 3M-2023 (CHF m) 23 470 6 312 4 881 4 681 3 032 1 311 1 617 1 567 69
Real internal growth (RIG) -2.0% -5.8% -0.2% -0.4% -0.8% 2.1% -3.6% -0.2% 3.0%
Pricing 3.4% 3.3% 4.6% 4.1% 3.9% 1.5% 1.9% 1.2% 1.7%
Organic growth 1.4% -2.5% 4.4% 3.6% 3.1% 3.7% -1.8% 1.0% 4.7%
Net M&A -0.6% 0.1% -3.6% -0.1% -0.1% 0.2% 0.7% 0.1% 0.0%
Foreign exchange -6.7% -5.3% -5.8% -13.0% -1.5% -9.8% -5.6% -5.1% -5.9%
Reported sales growth -5.9% -7.7% -5.0% -9.4% 1.5% -5.9% -6.6% -4.1% -1.2%
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-2024 (CHF m) 22 092 5 847 701 2 605 3 680 2 626 2 043 4 590
Sales 3M-2023 (CHF m) 23 470 6 223 761 2 800 3 880 3 107 2 030 4 669
Real internal growth (RIG) -2.0% -1.4% -1.6% -2.3% -2.5% -6.5% 0.4% -0.4%
Pricing 3.4% 3.0% 5.9% 1.7% 3.2% 2.3% 5.9% 4.7%
Organic growth 1.4% 1.6% 4.3% -0.6% 0.7% -4.2% 6.3% 4.3%
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