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Vevey, October 20, 2021

Nestlé reports nine-month sales for 2021, raises full-year organic sales growth guidance 


   -- Organic growth reached 7.6%, with real internal growth (RIG) of 6.0% and 
      pricing of 1.6%. Growth was supported by continued momentum in retail 
      sales, steady recovery of out-of-home channels, increased pricing and 
      market share gains. 
 
   -- Total reported sales increased by 2.2% to CHF 63.3 billion (9M-2020: CHF 
      61.9 billion). Foreign exchange reduced sales by 2.0%. Net divestitures 
      reduced sales by 3.3%. 
 
   -- Continued progress in portfolio management. On August 9, 2021, 
      Nestlé completed the acquisition of the core brands of The Bountiful 
      Company. 
 
   -- Full-year guidance for 2021 updated: we expect full-year organic sales 
      growth between 6% and 7%. The underlying trading operating profit margin 
      is expected around 17.5%, reflecting initial time delays between input 
      cost inflation and pricing, as well as the one-off integration costs 
      related to the acquisition of The Bountiful Company's core brands. Beyond 
      2021, our mid-term outlook for continued moderate margin improvement 
      remains unchanged. Underlying earnings per share in constant currency and 
      capital efficiency are expected to increase this year.

Mark Schneider, Nestlé CEO, commented: "We are pleased with Nestlé's strong organic growth in the nine months, driven by broad-based contributions from most geographies and categories. The relentless focus of our teams on local execution and agility enabled us to navigate input cost inflation and supply chain constraints. In the third quarter, we increased pricing in a responsible manner, while maintaining strong real internal growth. Investments in innovation, digitalization and sustainability further supported growth by enhancing the relevance and differentiation of our offerings.

Nestlé continues to take actions on sustainability. We recently laid out our plans to support a just transition to regenerative food systems, which will help achieve our climate targets as we work closely with farming communities around the world to improve soil health, restore water cycles and increase biodiversity for the long-term." 


 
                                                       Nestlé 
           Total    Zone    Zone    Zone                 Health       Other 
           Group    AMS    EMENA     AOA    Nespresso    Science    Businesses 
Sales 
 9M-2021 
 (CHF m)   63 294  24 589  15 492   15 172      4 654        3 237         150 
Sales 
 9M-2020 
 (CHF 
 m)*       61 912  24 991  14 952   15 251      4 180        2 421         117 
Real 
 internal 
 growth 
 RIG         6.0%    5.2%    6.4%     3.9%      10.4%        14.1%       25.5% 
Pricing      1.6%    3.2%    0.8%     0.2%       0.6%         0.1%        2.9% 
Organic 
 growth      7.6%    8.4%    7.2%     4.1%      11.0%        14.3%       28.5% 
Net M&A    - 3.3%  - 6.0%  - 2.8%   - 4.1%     - 0.1%        22.4%        0.0% 
Foreign 
 exchange  - 2.0%  - 3.9%  - 0.7%   - 0.7%       0.4%       - 2.8%      - 2.4% 
Reported 
 sales 
 growth      2.2%  - 1.5%    3.6%   - 0.6%      11.3%        33.8%       26.0%

* 2020 figures restated following the disclosure of Nestlé Health Science and Nespresso as standalone segments from 2021 onwards (previously combined and presented in Other Businesses).

Group Sales

Organic growth reached 7.6%, with RIG of 6.0%. Pricing increased to 1.6%, accelerating to 2.1% in the third quarter.

Growth was broad-based across most geographies and categories. Organic growth reached 7.1% in developed markets, based mostly on RIG with positive pricing. Organic growth in emerging markets was 8.3%, with robust RIG and positive pricing.

By product category, the largest contributor to organic growth was coffee, fueled by strong momentum for the three main brands Nescafé, Nespresso and Starbucks. Starbucks products posted 15.5% growth, with sales reaching CHF 2.2 billion across 79 markets. Purina PetCare saw double-digit growth, led by science-based and premium brands Purina Pro Plan, Fancy Feast and Purina ONE, as well as veterinary products. Prepared dishes and cooking aids posted high single-digit growth, based on strong sales developments for Maggi, Stouffer's and Lean Cuisine. Vegetarian and plant-based food offerings saw double-digit growth, with continued expansion of the product range, led by Garden Gourmet. Dairy reported mid single-digit growth, based on sustained demand for fortified milks, coffee creamers and ice cream. Confectionery recorded high single-digit growth, supported by a strong sales development for KitKat. Sales in Nestlé Health Science grew at a double-digit rate, reflecting strong demand for consumer care products particularly vitamins, minerals and supplements. Infant Nutrition posted negative growth, impacted by lower birth rates globally in the context of the pandemic and a sales decline in China. In the third quarter, growth in Infant Nutrition was positive outside of China. Water reported mid single-digit growth, with strong demand in North America and emerging markets in the third quarter.

By channel, organic growth in retail sales was 6.6%. E-commerce sales grew by 17.2%, reaching 14.1% of total Group sales, with strong momentum in most categories, particularly coffee, Purina PetCare and culinary. Organic growth in out-of-home channels was 22.8%, helped by the further easing of movement restrictions in some geographies.

Net divestitures decreased sales by 3.3%, largely related to the Nestlé Waters North America, Yinlu and Herta transactions. Divestitures were partially offset by acquisitions, including Freshly and the core brands of The Bountiful Company. The negative impact on sales from foreign exchange moderated to 2.0%. Total reported sales increased by 2.2% to CHF 63.3 billion.

Portfolio Management

Nestlé is transforming its global water business, sharpening its focus on international premium and mineral water brands and healthy hydration products. In March, Nestlé completed the acquisition of Essentia Water, a premium functional water brand in the U.S., and the sale of its regional spring water brands, purified water business and beverage delivery service in the U.S. and Canada.

Nestlé Health Science continues to focus on building a nutrition and health powerhouse. On August 9, 2021, Nestlé completed the acquisition of the core brands of The Bountiful Company for USD 5.75 billion. The Bountiful Company is the number one pure-play leader in the highly attractive and growing global nutrition and supplement category. In July, Nestlé completed the acquisition of Nuun, a leading company in the fast-growing functional hydration market, and entered into an agreement with Seres Therapeutics to jointly commercialize SER-109, an investigational oral microbiome therapeutic in the U.S. and Canada.

Building on the successful global coffee alliance, Nestlé continues to expand the reach of Starbucks branded coffee and tea products outside Starbucks retail stores. In July, Nestlé and Starbucks announced a new collaboration to bring Starbucks ready-to-drink coffee beverages to select markets across South-East Asia, Oceania and Latin America.

Zone Americas (AMS) 


   -- 8.4% organic growth: 5.2% RIG; 3.2% pricing. 
 
   -- North America posted mid single-digit organic growth, with robust RIG and 
      positive pricing. 
 
   -- Latin America reported double-digit organic growth, with both strong RIG 
      and pricing. 
 
        Sales     Sales                    Organic   Net    Foreign   Reported 
        9M-2021   9M-2020   RIG   Pricing  growth    M&A    exchange   growth 
Zone    CHF 24.6  CHF 25.0 
 AMS       bn        bn     5.2%     3.2%     8.4%  - 6.0%    - 3.9%    - 1.5%

Organic growth was 8.4%, with strong RIG of 5.2% supported by volume and mix. Pricing increased to 3.2%, accelerating to 5.0% in the third quarter. Net divestitures reduced sales by 6.0%, as the divestment of the Nestlé Waters North America brands more than offset the acquisitions of Freshly and Essentia Water. Foreign exchange had a negative impact of 3.9%. Reported sales in Zone AMS decreased by 1.5% to CHF 24.6 billion.

Zone AMS reported high single-digit organic growth, building on a strong sales development in 2020. Increased pricing, continued innovation, strong momentum in e-commerce and a further recovery of out-of-home channels supported growth. The Zone saw continued broad-based market share gains, led by coffee, pet food and dairy.

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