TIDM76TQ
RNS Number : 8826G
Nestle SA
29 July 2021
Nestlé press release
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.......................................
[Ad hoc announcement pursuant to art. 53 SIX Listing Rules]
Vevey/Switzerland, July 29, 2021
Nestlé reports half-year results for 2021, raises full-year
organic sales growth guidance
-- Organic growth reached 8.1%, with real internal growth (RIG)
of 6.8% and pricing of 1.3%. Growth was supported by continued
momentum in retail sales, a return to growth in out-of-home
channels, increased pricing and market share gains.
-- Total reported sales increased by 1.5% to CHF 41.8 billion
(6M-2020: CHF 41.2 billion). Foreign exchange reduced sales by
3.5%, reflecting appreciation of the Swiss franc against most
currencies. Net divestitures had a negative impact of 3.1%.
-- The underlying trading operating profit (UTOP) margin was
17.4%, unchanged versus the prior year. The trading operating
profit (TOP) margin decreased by 20 basis points to 16.7%.
-- Underlying earnings per share increased by 10.5% in constant
currency and increased by 8.3% on a reported basis to CHF 2.17.
Earnings per share increased by 3.2% to CHF 2.12 on a reported
basis.
-- Free cash flow was CHF 2.8 billion.
-- Further progress in portfolio management. In April, Nestlé
entered into an agreement to acquire core brands of The Bountiful
Company. The transaction is expected to close in August. On July
26, 2021, Nestlé and Starbucks strengthened their collaboration to
bring ready-to-drink coffee beverages to select markets across
South-East Asia, Oceania and Latin America.
-- Full-year 2021 outlook updated: we expect full-year organic
sales growth between 5% and 6%. The underlying trading operating
profit margin is now 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: "I would like to thank
the Nestlé team for their continued commitment to meeting consumer
needs and their relentless focus on execution. Organic growth was
strong across most geographies and categories, with robust momentum
in retail sales and a return to growth in out-of-home channels.
Through fast-paced innovation, strong brand support, increased
digitalization and stringent portfolio management we have built the
foundation for delivering consistent mid single-digit organic
growth for years to come.
Nestlé continues to invest for future profitable growth. We are
creating a global leader in vitamins, minerals and supplements with
the acquisition of The Bountiful Company's core brands. The
expansion of our partnership with Starbucks into ready-to-drink
coffee will open new opportunities in a fast-growing segment. Our
portfolio choices, strong execution and decisive actions on
sustainability enable us to create value for all stakeholders.
"
Group Results
Nestlé
Total Zone Nespresso Health
Group Zone AMS Zone EMENA AOA Science Other Businesses
------ -------- ---------- ------ ------------ -------------- ----------------
Sales 6M-2021
(CHF m) 41 755 16 162 10 214 10 210 3 158 1 914 97
Sales 6M-2020
(CHF m)* 41 152 16 674 10 029 10 062 2 762 1 540 85
------------------- ------ -------- ---------- ------ ------------ -------------- ----------------
Real internal
growth (RIG) 6.8% 5.3% 6.7% 6.3% 13.8% 13.6% 18.4%
Pricing 1.3% 2.3% 0.6% 0.5% 0.8% 0.0% -0.4%
Organic growth 8.1% 7.6% 7.3% 6.8% 14.6% 13.6% 18.0%
Net M&A -3.1% -4.3% -4.1% -3.7% * 0.2% 15.1% 0.0%
Foreign exchange -3.5% -6.3% -1.4% -1.7% * 0.1% * 4.4% -3.0%
Reported sales
growth 1.5% -3.1% 1.8% 1.5% 14.3% 24.3% 15.0%
------------------- ------ -------- ---------- ------ ------------ -------------- ----------------
6M-2021 Underlying
TOP Margin 17.4% 19.3% 18.8% 22.3% 26.0% 13.5% 7.6%
6M-2020 Underlying
TOP Margin* 17.4% 18.9% 18.3% 22.7% 25.9% 19.3% -28.6%
------------------- ------ -------- ---------- ------ ------------ -------------- ----------------
* 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 8.1%, with RIG of 6.8%. Pricing increased
to 1.3%, reflecting input cost inflation.
Growth was broad-based across most geographies. Organic growth
was 6.7% in developed markets, based mostly on RIG. Organic growth
in emerging markets was 10.0%, with strong RIG and positive
pricing.
By product category, the largest contributor to organic growth
was coffee, fueled by strong demand for the three main brands
Nescafé, Nespresso and Starbucks. Starbucks products posted 16.7%
growth, with sales reaching CHF 1.4 billion across 79 markets.
Purina PetCare saw double-digit growth led by science-based and
premium brands Purina Pro Plan, Purina ONE and Felix, as well as
veterinary products. Prepared dishes and cooking aids posted high
single-digit growth, based on strong demand for Maggi and
Stouffer's. Vegetarian and plant-based food offerings continued to
see strong double-digit growth, led by Garden Gourmet. Dairy
reported high single-digit growth, led by fortified milks, coffee
creamers and ice cream. Confectionery recorded double-digit growth,
supported by a strong sales development in impulse products. Sales
in Nestlé Health Science grew at a double-digit rate, reflecting
strong demand for vitamins, minerals and supplements and
healthy-aging products. Infant Nutrition saw a sales decrease,
impacted by lower birth rates in the context of the pandemic. Water
returned to positive growth, led by international premium brands S.
Pellegrino and Perrier.
By channel, organic growth in retail sales was 7.3%, moderating
to a mid single-digit rate in the second quarter due to a high base
of comparison in 2020. E-commerce sales grew by 19.2%, reaching
14.6% of total Group sales, with strong momentum in most categories
particularly coffee, Purina PetCare and culinary. Organic growth in
out-of-home channels was 21.3%, helped by the easing of movement
restrictions in some geographies.
Net divestitures decreased sales by 3.1%, largely related to the
divestments of Nestlé Waters North America brands, the Herta
charcuterie business and the Yinlu peanut milk and canned rice
porridge businesses. Foreign exchange reduced sales by 3.5%,
reflecting the appreciation of the Swiss franc versus most
currencies. Total reported sales increased by 1.5% to CHF 41.8
billion.
Underlying Trading Operating Profit
Underlying trading operating profit increased by 1.3% to CHF 7.3
billion. The underlying trading operating profit margin was 17.4%,
unchanged versus the prior year in constant currency and on a
reported basis.
Gross margin increased by 20 basis points to 48.8%.
Consumer-facing marketing expenses((1) ) increased by 80 basis
points to above 2019 levels, following reduced in-store activation
in 2020. Cost inflation also impacted margin development in the
second quarter. Operating leverage, structural cost reductions,
increased pricing and lower COVID-19-related costs offset these
increases.
Restructuring expenses and net other trading items increased by
CHF 78 million to CHF 264 million, reflecting higher asset
impairments. Trading operating profit increased by 0.2% to CHF 7.0
billion. The trading operating profit margin was 16.7%, a decrease
of 20 basis points in constant currency and on a reported
basis.
___
(1) 2019 figure excludes Nestlé Skin Health
Net Financial Expenses and Income Tax
Net financial expenses decreased by 6.9% to CHF 416 million,
reflecting a lower cost of debt.
The Group reported tax rate decreased by 970 basis points to
17.4%, as a result of one-off items. The underlying tax rate
decreased by 120 basis points to 20.2%, mainly due to the
geographic and business mix.
Net Profit and Earnings Per Share
Net profit grew by 1.1% to CHF 5.9 billion. Net profit margin
decreased by 10 basis points to 14.2%, as a result of one-off
income related to divestitures in 2020.
Underlying earnings per share increased by 10.5% in constant
currency and increased by 8.3% on a reported basis to CHF 2.17. The
increase was mainly the result of improved operating performance.
Nestlé's share buyback program contributed 1.4% to the underlying
earnings per share increase, net of finance costs. Earnings per
share increased by 3.2% to CHF 2.12 on a reported basis.
Cash Flow
Cash generated from operations was essentially unchanged at CHF
5.8 billion. Free cash flow decreased from CHF 3.3 billion to CHF
2.8 billion mainly due to a temporary increase in capital
expenditure to meet strong volume demand, particularly for Purina
PetCare and coffee.
Share Buyback Program
In the first half, the Group repurchased CHF 3.1 billion of
Nestlé shares as part of the three-year CHF 20 billion share
buyback program, which began in January 2020.
Net Debt
Net debt increased to CHF 38.5 billion as at June 30, 2021,
compared to CHF 31.3 billion at December 31, 2020. The increase
reflected the dividend payment of CHF 7.7 billion and share
buybacks of CHF 3.1 billion, which more than offset free cash flow
generation and a net cash inflow from divestitures and
acquisitions.
Portfolio Management
Nestlé is transforming its global water business, sharpening its
focus on international premium and mineral water brands and healthy
hydration products. On March 5, 2021, Nestlé completed the
acquisition of Essentia Water, a premium functional water brand in
the U.S. On March 31, 2021, Nestlé completed the sale of its
regional spring water brands, purified water business and beverage
delivery service in the U.S. and Canada for USD 4.3 billion.
Nestlé Health Science continues to focus on building a nutrition
and health powerhouse. On April 30, 2021, Nestlé entered into an
agreement to acquire 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. The transaction is expected to close in
August. On July 1, 2021, Nestlé completed the acquisition of Nuun,
a leading company in the fast-growing functional hydration market.
On July 1, 2021, Nestlé Health Science entered into an agreement
with Seres Therapeutics to jointly commercialize SER-109, an
investigational oral microbiome therapeutic in the U.S. and Canada.
If approved, SER-109 would become the first-ever FDA-approved
microbiome therapeutic.
Building on the successful global coffee alliance, Nestlé
continues to expand the reach of Starbucks branded coffee and tea
products outside Starbucks retail stores. On July 26, 2021, 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)
-- 7.6% organic growth: 5.3% RIG; 2.3% pricing.
-- North America saw mid single-digit organic growth, with positive RIG and pricing.
-- Latin America reached double-digit organic growth, with strong RIG and pricing.
-- The underlying trading operating profit margin increased by 40 basis points to 19.3%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2021 6M-2020 RIG Pricing growth 6M-2021 6M-2020 6M-2021 6M-2020
--------- --------- ----- ------- ------- -------- -------- --------- --------
CHF 16.2 CHF 16.7 CHF 3.1 CHF 3.2
Zone AMS bn bn 5.3% 2.3% 7.6% bn bn 19.3% 18.9%
--------- --------- --------- ----- ------- ------- -------- -------- --------- --------
Organic growth was 7.6%, with strong RIG of 5.3% supported by
volume and mix. Pricing increased significantly to 2.3%. Net
divestitures reduced sales by 4.3%, as the divestments of the
Nestlé Waters North America brands and U.S. ice cream business more
than offset the acquisitions of Freshly and Essentia Water. Foreign
exchange had a negative impact of 6.3%, reflecting broad-based
currency depreciations against the Swiss franc. Reported sales in
Zone AMS decreased by 3.1% to CHF 16.2 billion.
Zone AMS reported high single-digit organic growth, with a high
base of comparison in 2020. Growth was supported by continued
innovation, strong momentum in e-commerce and recovery in
out-of-home channels. The Zone saw broad-based market share gains,
led by coffee, pet food, dairy and Infant Nutrition.
North America posted mid single-digit growth. The largest growth
contributor was Purina PetCare, with sustained momentum in
e-commerce. Its science-based and premium brands Purina Pro Plan,
Purina ONE and Fancy Feast all grew at a double-digit rate.
Beverages, including Starbucks at-home products, Coffee mate and
Nescafé, saw high single-digit growth. Frozen and chilled food
recorded mid single-digit growth. Strong sales developments for
Stouffer's, Lean Cuisine and Freshly were partially offset by a
sales decrease in pizza. Home-baking products, including Toll House
and Carnation, saw a sales decline following exceptionally high
demand in 2020. Sales in ice cream and confectionery in Canada grew
at a double-digit rate, driven by Häagen-Dazs and KitKat. Water
posted positive growth, with strong demand for international
premium brands S.Pellegrino and Perrier, as well as Essentia.
Nestlé Professional returned to positive growth.
Latin America reached double-digit growth, with strong
contributions from most geographies and product categories. Brazil
posted double-digit growth, reflecting strong demand for KitKat,
Nescafé and the newly launched Ninho Forti+. Sales in Mexico grew
at a double-digit rate, led by coffee and confectionery. Chile also
reported double-digit growth, supported by ice cream and
confectionery. By product category, confectionery, Purina PetCare
and coffee all grew at a strong double-digit rate. Growth in dairy
moderated to a high single-digit rate, following exceptionally
strong demand in 2020, particularly for home cooking and baking
products. Infant Nutrition saw mid single-digit growth, supported
by robust demand for new premium and functional products. Nestlé
Professional recorded strong double-digit growth, with sales almost
recovering to 2019 levels.
The Zone's underlying trading operating profit margin increased
by 40 basis points. Operating leverage, structural cost reductions
and product mix more than offset input cost inflation and increased
consumer-facing marketing expenses.
Zone Europe, Middle East and North Africa (EMENA)
-- 7.3% organic growth: 6.7% RIG; 0.6% pricing.
-- Western Europe saw high single-digit organic growth with
strong RIG, partially offset by negative pricing.
-- Central and Eastern Europe reached double-digit organic
growth, with strong RIG and positive pricing.
-- Middle East and North Africa posted mid single-digit organic
growth, based on positive RIG and pricing.
-- The underlying trading operating profit margin increased by 50 basis points to 18.8%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2021 6M-2020 RIG Pricing growth 6M-2021 6M-2020 6M-2021 6M-2020
--------- --------- ------ ------- ------- -------- -------- --------- --------
CHF 10.2 CHF 10.0 CHF 1.9 CHF 1.8
Zone EMENA bn bn 6.7% 0.6% 7.3% bn bn 18.8% 18.3%
----------- --------- --------- ------ ------- ------- -------- -------- --------- --------
Organic growth reached 7.3%, with strong RIG of 6.7% supported
by volume and mix. Pricing turned positive, contributing 0.6%. Net
divestitures reduced sales by 4.1%, largely related to the
divestment of the Herta charcuterie business. Foreign exchange
negatively impacted sales by 1.4%. Reported sales in Zone EMENA
increased by 1.8% to CHF 10.2 billion.
Zone EMENA reported high single-digit organic growth, supported
by successful innovation and continued strong momentum in
e-commerce. Each region posted positive growth, with strong sales
developments in Russia, Turkey, the United Kingdom and Italy. The
Zone continued to see broad-based market share gains, particularly
for pet food, coffee, plant-based food products and water.
By product category, coffee and Purina PetCare posted
double-digit growth. Coffee was supported by strong momentum for
Nescafé and Starbucks at-home products. Purina PetCare reported
continued strong growth for premium brands Felix, Purina Pro Plan
and Purina ONE, as well as veterinary products. Tails.com and
Lily's Kitchen also saw strong momentum, based on increased
consumer adoption. Growth in Nestlé Professional and water turned
positive, with strong sales developments in the second quarter as
movement restrictions eased. Perrier Energize, a low-calorie
natural energy beverage, was successfully launched in France. Sales
in confectionery reached a mid single-digit rate, based on improved
demand for impulse and gifting products. Building on Nestlé's
expertise in chocolate innovation and non-dairy alternatives, a
vegan KitKat was launched across several European markets in June.
Culinary saw low single-digit growth. Strong demand for Garden
Gourmet and Mindful Chef was partially offset by slightly negative
growth in Maggi following elevated demand in 2020. Infant Nutrition
posted a sales decrease due to lower birth rates in the context of
the pandemic, but gained market share.
The Zone's underlying trading operating profit margin increased
by 50 basis points. Operating leverage, structural cost reductions
and product mix more than offset increased consumer-facing
marketing expenses and commodity inflation.
Zone Asia, Oceania and sub-Saharan Africa (AOA)
-- 6.8% organic growth: 6.3% RIG; 0.5% pricing.
-- China posted double-digit organic growth, based on strong RIG and positive pricing.
-- South-East Asia reported slightly negative organic growth,
with positive RIG and negative pricing.
-- South Asia saw double-digit organic growth, with strong RIG and positive pricing.
-- Sub-Saharan Africa recorded double-digit organic growth, led
by strong RIG and positive pricing.
-- Japan, South Korea and Oceania combined saw mid single-digit
organic growth. Strong RIG was partially offset by slightly
negative pricing.
-- The underlying trading operating profit margin decreased by 40 basis points to 22.3%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2021 6M-2020 RIG Pricing growth 6M-2021 6M-2020 6M-2021 6M-2020
--------- --------- ------ ------- ------- -------- -------- --------- --------
CHF 10.2 CHF 10.1 CHF 2.3 CHF 2.3
Zone AOA bn bn 6.3% 0.5% 6.8% bn bn 22.3% 22.7%
--------- --------- --------- ------ ------- ------- -------- -------- --------- --------
Organic growth was 6.8%, with strong RIG of 6.3% and pricing of
0.5%. Net divestitures had a negative impact of 3.7%, largely
related to the divestment of the Yinlu peanut milk and canned rice
porridge businesses in China. Foreign exchange reduced sales by
1.7%. Reported sales in Zone AOA increased by 1.5% to CHF 10.2
billion.
Zone AOA reported high single-digit organic growth, showing
resilience in a difficult environment. Most categories gained
market share, particularly pet food, coffee, confectionery and
culinary.
China recorded double-digit growth, helped by a recovery in
out-of-home channels and the timing of Chinese New Year. 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. Infant Nutrition posted a
sales decrease, with market shares declining but slowly
stabilizing.
South-East Asia saw slightly negative growth in a difficult
economic environment. High single-digit growth in Malaysia and
Vietnam was offset by a sales decrease in the Philippines due to a
high base of comparison in 2020. South Asia reported double-digit
growth, with continued strong momentum in e-commerce. 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 Maggi, Milo and Nescafé, along with
Golden Morn in Nigeria.
Japan posted high single-digit growth, led by Nescafé and Purina
PetCare. Sales in South Korea grew at a strong double-digit rate,
driven by coffee. Oceania reported slightly positive growth, with
strong demand for KitKat and Purina PetCare.
By product category, the key growth drivers were culinary,
coffee and Nestlé Professional. Sales in confectionery and ice
cream grew at a double-digit rate, with particularly strong
momentum in Malaysia. Dairy saw mid single-digit growth, led by
strong demand for fortified milks. Infant Nutrition posted negative
growth and continued to gain market share in South Asia and
Africa.
The Zone's underlying trading operating profit margin decreased
by 40 basis points. Commodity inflation and product mix more than
offset operating leverage and structural cost reductions.
Nespresso
-- 14.6% organic growth: 13.8% RIG; 0.8% pricing.
-- The underlying trading operating profit margin increased by 10 basis points to 26.0%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2021 6M-2020 RIG Pricing growth 6M-2021 6M-2020 6M-2021 6M-2020
--------- --------- ----- ------- ------- -------- -------- --------- --------
CHF 3.2 CHF 2.8 CHF 0.8 CHF 0.7
Nespresso bn bn 13.8% 0.8% 14.6% bn bn 26.0% 25.9%
---------- --------- --------- ----- ------- ------- -------- -------- --------- --------
Organic growth reached 14.6%, based on strong RIG of 13.8% and
pricing of 0.8%. Foreign exchange reduced sales by 0.1%. Reported
sales in Nespresso increased by 14.3% to CHF 3.2 billion.
Nespresso saw double-digit organic growth, reflecting continued
expansion of the Vertuo system and robust demand for the Original
system. Growth was fueled by new consumer adoption, a return to
positive growth in boutiques and out-of-home channels, as well as
innovation. New products included Kahawa ya Congo, the first
organic coffee in the Reviving Origins range, and the roll-out of
Momento, a versatile touchless machine that creates specialty
coffees with fresh milk for out-of-home channels.
By geography, the Americas, EMENA and AOA all posted
double-digit growth. Overall Nespresso gained market share, with
contributions from most markets.
The underlying trading operating profit margin of Nespresso
increased by 10 basis points. Operating leverage and structural
cost reductions more than offset increased consumer-facing
marketing expenses.
Nestlé Health Science
-- 13.6% organic growth: 13.6% RIG; 0.0% pricing.
-- The underlying trading operating profit margin decreased by 580 basis points to 13.5%.
Sales Sales Organic UTOP UTOP Margin Margin
6M-2021 6M-2020 RIG Pricing growth 6M-2021 6M-2020 6M-2021 6M-2020
--------- --------- ----- ------- ------- -------- -------- --------- --------
Nestlé CHF 1.9 CHF 1.5 CHF 0.3 CHF 0.3
Health Science bn bn 13.6% 0.0% 13.6% bn bn 13.5% 19.3%
---------------- --------- --------- ----- ------- ------- -------- -------- --------- --------
Organic growth was 13.6%, entirely driven by RIG. Net
acquisitions increased sales by 15.1%, largely related to the
acquisitions of Vital Proteins, Zenpep and Aimmune. Foreign
exchange negatively impacted sales by 4.4%. Reported sales in
Nestlé Health Science increased by 24.3% to CHF 1.9 billion.
Nestlé Health Science posted double-digit organic growth, with a
high base of comparison in 2020. Growth was driven by sustained
momentum in e-commerce, new product launches and geographic
expansion.
Consumer Care recorded double-digit growth. Vitamins, minerals
and supplements that support health and the immune system continued
to see strong demand. Vital Proteins and Persona more than doubled
their sales. Garden of Life saw continued strength, particularly in
e-commerce. Healthy aging products grew at a double-digit rate,
supported by Boost in North America, Nutren in emerging markets and
Meritene in Europe. Medical Nutrition reported mid single-digit
growth, with robust demand for Compleat, an adult medical care
product, and Althéra, Alfaré and Alfamino pediatric care
products.
By geography, the Americas, EMENA and AOA all posted
double-digit growth.
The underlying trading operating profit margin of Nestlé Health
Science decreased by 580 basis points. As expected, investments in
Aimmune and consumer-facing marketing expenses more than offset
operating leverage. Aimmune's margin dilution reflects initial
commercial investments behind Palforzia. The roll-out of this
peanut allergy treatment has been impacted by the pandemic, but it
is expected to accelerate as visits to allergists resume and
schools reopen. Increased consumer-facing marketing expenses
included a highly successful celebrity campaign for Vital
Proteins.
Business as a force for good: Regenerating local water cycles to
help create a positive water impact from 2025 onwards
Water is a vital resource that plays a crucial role in our
communities and in our food systems. That's why Nestlé Waters is
stepping up its work to manage water resources sustainably and
plans to help regenerate local water cycles through more than 100
specific projects for its 48 sites. The company will define
tailored solutions working in collaboration with multiple partners.
As of 2025, these measures will help nature near each Nestlé Waters
site retain more water than the business currently uses in its
operations.
Nestlé will invest CHF 120 million to assist with the
implementation of the 100 projects. This new water commitment
builds on our strong heritage of nature protection and water
stewardship to help ensure the future prosperity of ecosystems and
the availability of safe and clean water.
The projects will focus on actions like reforestation, wetland
restoration, rainwater harvesting and ways to improve quality of
available water. Since each site is unique, the solutions will be
adapted to the local water challenge and will go beyond Nestlé's
own operations. Some project examples include:
-- Buxton - Land conservation (protecting land from development)
and natural flood management interventions in Derbyshire, UK.
-- Nestlé Pure Life - Support for farmers to use drip irrigation in Sheikhupura, Pakistan.
-- Nestlé Pure Life - Delivery of water treatment, filtration
and pipeline infrastructure for the municipal water supply in
Benha, Egypt.
To assess whether these projects adequately address local and
regional water challenges and reflect stakeholder priorities,
Nestlé Waters has established an external panel of experts from
civil society, academia and international development
organizations.
Each of the projects will also be measured using the World
Resources Institute's Volumetric Water Benefit Accounting ( VWBA )
methodology. This methodology provides consistency and allows the
company to track its progress. Nestlé Waters will report the water
usage and the impact of the projects at each of its sites.
This plan expands on the company's ongoing work to certify all
Nestlé Waters' sites according to the Alliance for Water
Stewardship (AWS) by 2025. This standard involves understanding
local water challenges and engaging with local stakeholders,
providing Nestlé with much of the groundwork to design these new
projects.
Outlook
Full-year 2021 outlook updated: we expect full-year organic
sales growth between 5% and 6%. The underlying trading operating
profit margin is now 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.
Contacts:
Media Christoph Meier Tel.: +41 21 924 22 00
mediarelations@nestle.com
Investors Luca Borlini Tel.: +41 21 924 3509 ir@nestle.com
Annex
Half-year sales and underlying trading operating profit (UTOP)
overview by operating segment
Nestlé
Total Nespresso Health
Group Zone AMS Zone EMENA Zone AOA Science Other Businesses
------ -------- ---------- -------- ------------ -------------- ----------------
Sales 6M-2021 (CHF
m) 41 755 16 162 10 214 10 210 3 158 1 914 97
Sales 6M-2020 (CHF
m)* 41 152 16 674 10 029 10 062 2 762 1 540 85
---------------------- ------ -------- ---------- -------- ------------ -------------- ----------------
Real internal growth
(RIG) 6.8% 5.3% 6.7% 6.3% 13.8% 13.6% 18.4%
Pricing 1.3% 2.3% 0.6% 0.5% 0.8% 0.0% -0.4%
Organic growth 8.1% 7.6% 7.3% 6.8% 14.6% 13.6% 18.0%
Net M&A -3.1% -4.3% -4.1% -3.7% * 0.2% 15.1% 0.0%
Foreign exchange -3.5% -6.3% -1.4% -1.7% * 0.1% * 4.4% -3.0%
Reported sales growth 1.5% -3.1% 1.8% 1.5% 14.3% 24.3% 15.0%
---------------------- ------ -------- ---------- -------- ------------ -------------- ----------------
6M-2021 Underlying
TOP (CHF m) 7 251 3 112 1 918 2 282 822 * 258 7
6M-2020 Underlying
TOP (CHF m)* 7 156 3 150 1 840 2 282 714 * 297 -24
---------------------- ------ -------- ---------- -------- ------------ -------------- ----------------
6M-2021 Underlying
TOP Margin 17.4% 19.3% 18.8% 22.3% 26.0% 13.5% 7.6%
6M-2020 Underlying
TOP Margin* 17.4% 18.9% 18.3% 22.7% 25.9% 19.3% -28.6%
---------------------- ------ -------- ---------- -------- ------------ -------------- ----------------
Half-year sales and underlying trading operating profit (UTOP)
overview by product
Milk Prepared
Powdered products Nutrition dishes
Total & liquid & ice & Health & cooking
Group beverages Water cream Science aids Confec-tionery PetCare
------ ---------- ----- --------- --------- ---------- -------------- -------
Sales 6M-2021
(CHF m) 41 755 11 648 2 291 5 205 6 060 5 919 3 229 7 403
Sales 6M-2020
(CHF m)* 41 152 10 740 3 229 5 392 6 010 5 827 2 973 6 981
------------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
Real internal
growth (RIG) 6.8% 10.3% 2.0% 4.8% -0.1% 7.1% 9.1% 9.5%
Pricing 1.3% 0.7% 1.6% 3.5% 1.1% 0.9% 1.9% 0.8%
Organic growth 8.1% 11.0% 3.6% 8.2% 1.0% 8.0% 11.0% 10.3%
------------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
6M-2021 Underlying
TOP (CHF m) 7 251 2 905 204 1 309 1 079 962 372 1 568
6M-2020 Underlying
TOP (CHF m)* 7 156 2 467 272 1 231 1 401 1 071 280 1 537
6M-2021 Underlying
TOP Margin 17.4% 24.9% 8.9% 25.2% 17.8% 16.3% 11.5% 21.2%
6M-2020 Underlying
TOP Margin* 17.4% 23.0% 8.4% 22.8% 23.3% 18.4% 9.4% 22.0%
------------------- ------ ---------- ----- --------- --------- ---------- -------------- -------
* 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).
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END
IR EKLBLFDLLBBQ
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July 29, 2021 02:00 ET (06:00 GMT)
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