NESTLÉ S.A.

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Press Release: Nestle: Nestlé reports nine-month -2-

10/20/2021 | 01:15am

North America posted mid single-digit growth in the context of significant supply chain constraints. Sales in Purina PetCare grew at a high single-digit rate, led by Purina Pro Plan, Fancy Feast and Purina ONE. Purina Pro Plan LiveClear, the breakthrough allergen-reducing cat food, continued to see strong momentum and expanded its range to cover all life stages. Nestlé Professional and Starbucks out-of-home products saw strong double-digit growth, helped by a low base of comparison. Frozen and chilled food reported mid single-digit growth. Strong sales developments for Stouffer's, Lean Cuisine, Freshly and Hot Pockets were partially offset by a sales decrease in pizza, following a high base of comparison in 2020. Sales in the beverages category, including Starbucks at-home products, Coffee mate and Nescafé, grew at a mid single-digit rate. Water reported mid single-digit growth, accelerating to a double-digit rate in the third quarter with a strong sales development for Essentia. Home-baking products, including Toll House and Carnation, saw a sales decline following exceptional demand in 2020.

Latin America posted double-digit growth, with broad-based contributions across geographies and most product categories. Sales in Mexico grew at a double-digit rate, led by Nescafé and confectionery brands Carlos V and KitKat. Brazil reported double-digit growth, reflecting strong demand for confectionery, coffee and fortified milks. Chile also recorded double-digit growth, supported by confectionery and ice cream. By product category, the largest contributor to growth was Purina PetCare with strong sales developments across all brands, markets and channels. Sales in confectionery, coffee, particularly Nescafé Dolce Gusto, and Nestlé Professional all grew at a strong double-digit rate. Growth in dairy moderated to a low single-digit rate, following exceptionally strong demand in 2020 particularly for home cooking and baking products. Infant Nutrition saw mid single-digit growth, accelerating to a high single-digit rate in the third quarter based on robust demand for new premium and functional products.

Zone Europe, Middle-East and North Africa (EMENA)

   -- 7.2% organic growth: 6.4% RIG; 0.8% pricing. 
 
   -- Western Europe saw mid single-digit organic growth with strong RIG and 
      slightly negative pricing. 
 
   -- Central and Eastern Europe posted double-digit organic growth, with 
      strong RIG and positive pricing. 
 
   -- Middle East and North Africa reported high single-digit organic growth, 
      with a balanced contribution from RIG and pricing. 
 
        Sales     Sales                    Organic   Net    Foreign   Reported 
        9M-2021   9M-2020   RIG   Pricing  growth    M&A    exchange   growth 
Zone    CHF 15.5  CHF 15.0 
 EMENA     bn        bn     6.4%     0.8%     7.2%  - 2.8%    - 0.7%      3.6% 
 

Organic growth reached 7.2%, with strong RIG of 6.4% supported by volume and mix. Pricing increased by 0.8%, turning positive in Western Europe in the third quarter. Net divestitures reduced sales by 2.8%, largely related to the divestiture of the Herta charcuterie business. Foreign exchange negatively impacted sales by 0.7%. Reported sales in Zone EMENA increased by 3.6% to CHF 15.5 billion.

Zone EMENA reported high single-digit organic growth, based on product innovation and continued strong momentum in e-commerce and specialist channels. All markets posted positive growth, with strong sales developments led by Russia, Turkey, the United Kingdom and Italy. The Zone continued to see broad-based market share gains, particularly for pet food, coffee and plant-based products.

By product category, Purina PetCare posted double-digit growth driven by premium brands Felix, Gourmet and Purina Pro Plan, as well as veterinary products. Tails.com continued its geographic expansion, with more than 250 000 monthly subscribers across nine markets. Sales in coffee grew by almost 10%, supported by strong momentum for Nescafé and Starbucks at-home products with continued innovation across all coffee brands. Nestlé Professional reported strong double-digit growth, helped by further recovery in out-of-home channels. Water posted mid single-digit growth, led by S.Pellegrino. Sales in confectionery grew at a mid single-digit rate, based on improved demand for impulse and gifting products. Culinary saw low single-digit growth. Strong demand for Garden Gourmet and Mindful Chef was partially offset by slightly negative growth in Maggi and pizza following elevated demand in 2020. The recent launch of Wunda, the high-protein pea-based milk alternative, resonated strongly with consumers. Infant Nutrition posted slightly negative growth due to lower birth rates in the context of the pandemic, but saw high single-digit growth in the third quarter with continued market share gains.

Zone Asia, Oceania and sub-Saharan Africa (AOA)

   -- 4.1% organic growth: 3.9% RIG; 0.2% pricing. 
 
   -- China posted low single-digit organic growth, based on positive RIG and 
      slightly negative pricing. 
 
   -- South-East Asia saw slightly negative organic growth, with negative RIG 
      and pricing. 
 
   -- South Asia reported double-digit organic growth, with strong RIG and 
      positive pricing. 
 
   -- Sub-Saharan Africa recorded double-digit organic growth, led by strong 
      RIG with positive pricing. 
 
   -- Japan, South Korea and Oceania saw mid single-digit organic growth. 
      Strong RIG was partially offset by negative pricing. 
 
        Sales     Sales                    Organic   Net    Foreign   Reported 
        9M-2021   9M-2020   RIG   Pricing  growth    M&A    exchange   growth 
Zone    CHF 15.2  CHF 15.3 
 AOA       bn        bn     3.9%     0.2%     4.1%  - 4.1%    - 0.7%    - 0.6% 
 

Organic growth was 4.1%, with RIG of 3.9% and pricing of 0.2%. Net divestitures had a negative impact of 4.1%, largely related to the divestment of the Yinlu peanut milk and canned rice porridge businesses in China. Foreign exchange reduced sales by 0.7%. Reported sales in Zone AOA decreased by 0.6% to CHF 15.2 billion.

Zone AOA reported mid single-digit organic growth in a difficult economic environment with regional lockdowns. In the third quarter, growth turned slightly negative, reflecting a sales decline in Infant Nutrition in China and a high base of comparison in 2020. Most categories gained market share, led by coffee, culinary and pet food.

China saw low single-digit growth, as strong sales developments in most categories were partially offset by a sales decrease in Infant Nutrition. The largest growth contributor was Nestlé Professional, with sales exceeding 2019 levels. Coffee, culinary, dairy and Purina PetCare all grew at strong double-digit rates, supported by new digitally-driven product launches. Infant Nutrition posted a sales decline. Turnaround initiatives continue to progress, with further actions being implemented.

South-East Asia saw slightly negative growth in a difficult economic environment with movement restrictions. The Philippines saw a sales decline, also impacted by a high base of comparison in 2020. Indochina posted low single-digit growth, with a sales decrease in on-the-go products and out-of-home channels. Sales in Malaysia grew at a high single-digit rate.

South Asia recorded double-digit growth, supported by strong e-commerce momentum and distribution expansion in rural areas. Growth was broad-based across most categories, led by Maggi, KitKat and Nescafé.

Sub-Saharan Africa recorded double-digit growth, based on strong sales developments for Milo, Maggi and Nescafé led by affordable offerings.

Japan posted high single-digit growth, led by Nescafé, Purina PetCare and KitKat. Sales in South Korea grew at a strong double-digit rate, driven by coffee. Oceania reported positive growth, with market share gains and robust demand for KitKat, Purina PetCare and Maggi.

By product category, the key growth drivers were culinary, coffee and Nestlé Professional. Sales in confectionery and ice cream grew at a high single-digit rate, with good sales momentum in Malaysia. Dairy reported mid single-digit growth, led by strong demand for fortified milks. Infant Nutrition saw a sales decline, with growth turning positive outside of China in the third quarter.

Nespresso

   -- 11.0% organic growth: 10.4% RIG; 0.6% pricing. 
 
            Sales     Sales                     Organic   Net    Foreign   Reported 
            9M-2021   9M-2020    RIG   Pricing  growth    M&A    exchange   growth 
            CHF 4.7   CHF 4.2 
Nespresso      bn        bn     10.4%     0.6%    11.0%  - 0.1%      0.4%     11.3% 
 

Organic growth reached 11.0%, based on strong RIG of 10.4% and pricing of 0.6%. Foreign exchange positively impacted sales by 0.4%. Reported sales in Nespresso increased by 11.3% to CHF 4.7 billion.

Nespresso posted double-digit growth, moderating to a mid single-digit rate in the third quarter due to a high base of comparison in 2020. The Vertuo system continued to see strong growth, with the Original system also contributing positively. Increased consumer adoption and innovation supported growth. Nespresso expanded its coffee offerings across the Vertuo system, including Peru Organic, and added Novecento and Millenio to the Italian Heritage range for the Original System. The Nespresso x Chiara Ferragni summer collection and social media campaign resonated strongly with consumers.

By channel, boutiques and out-of-home channels saw a further recovery, with a continued positive sales development in e-commerce.

By geography, the Americas and AOA posted double-digit growth. EMENA saw high single-digit growth.

Overall Nespresso gained market share, with contributions from most markets.

(MORE TO FOLLOW) Dow Jones Newswires

October 20, 2021 01:15 ET (05:15 GMT)

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