Press Release: Nestle: Nestlé reports half-year -3-

South-East Asia posted mid single-digit growth, with positive contributions from most geographies, led by Malaysia. Nescafé, particularly ready-to-drink offerings, as well as Maggi and KitKat saw strong demand. South Asia recorded broad-based double-digit growth, due to distribution expansion and increased brand equity, particularly for Maggi, KitKat and Nescafé. Growth in Middle East and Africa was close to a double-digit rate, based on strong momentum for affordable offerings in Central and West Africa. Japan reported mid single-digit growth, based on solid demand for coffee and Purina PetCare. Sales in South Korea grew at a double-digit rate, driven by Starbucks products. Oceania reported high single-digit growth, fueled by new product launches, including KitKat Dark Tablet and the relaunch of Nescafé coffee mixes.

By product category, culinary was the largest growth contributor, led by Maggi. Coffee posted high single-digit growth, with continued strong demand for Nescafé and Starbucks products. Sales in Nestlé Professional grew at a double-digit rate. Infant Nutrition reported mid single-digit growth, with a broad-based recovery in the second quarter. Sales in cocoa and malt beverages as well as confectionery saw double-digit growth, based on strong demand for Milo and KitKat. Purina PetCare recorded high single-digit growth, with continued momentum for Purina ONE, Purina Pro Plan and Felix.

The Zone's underlying trading operating profit margin decreased by 90 basis points. Significant cost inflation more than offset pricing, growth leverage and disciplined cost control.

Zone Latin America

-- 13.6% organic growth: 4.2% RIG; 9.4% pricing.

-- The underlying trading operating profit margin increased by 10 basis

points to 21.1%.

Sales Sales Organic UTOP UTOP Margin Margin

6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021

Zone

Latin CHF 5.7 CHF 4.8 CHF 1.2 CHF 1.0

America bn bn 4.2% 9.4% 13.6% bn bn 21.1% 21.0%

Organic growth was 13.6%, with increased pricing of 9.4%. RIG remained strong at 4.2%, following high single-digit growth in 2021. Foreign exchange had a positive impact of 4.3%. Reported sales in Zone Latin America increased by 17.9% to CHF 5.7 billion.

Zone Latin America maintained double-digit organic growth, with broad-based contributions across geographies and categories. Growth was supported by increased pricing, a further recovery of out-of-home channels and sustained momentum for retail sales. The Zone saw market share gains in Infant Nutrition, pet food and coffee creamers.

Sales in Brazil grew at a double-digit rate, with strong momentum for confectionery, cocoa and malt beverages as well as Infant Nutrition. Mexico reported high single-digit growth, with strong sales developments for Purina PetCare, Nescafé and Carnation. Sales in Chile grew at a double-digit rate, led by confectionery, Purina PetCare and coffee. Colombia and the Plata Region also saw strong growth, supported by volumes.

By product category, confectionery was the largest growth contributor, reflecting strong demand for KitKat and key local brands, particularly Garoto in Brazil. Sales in Purina PetCare grew at a double-digit rate, fueled by Dog Chow, Cat Chow and Purina Pro Plan. Distribution of Purina ONE continued to expand across the Zone. Coffee reported broad-based double-digit growth, supported by Nescafé soluble coffee, Nescafé Dolce Gusto and the further roll-out of Starbucks products. Sales in Nestlé Professional grew at a strong double-digit rate, with particular strength for beverages. Infant Nutrition saw high single-digit growth, based on solid momentum for Nido and NAN. Dairy posted mid single-digit growth, led by fortified milks and dairy culinary solutions.

The Zone's underlying trading operating profit margin increased by 10 basis points. Pricing, growth leverage and disciplined cost control more than offset cost inflation.

Zone Greater China

-- 2.3% organic growth: 1.6% RIG; 0.7% pricing.

-- The underlying trading operating profit margin increased by 100 basis

points to 15.0%.

Sales Sales Organic UTOP UTOP Margin Margin

6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021

Zone

Greater CHF 2.7 CHF 2.5 CHF 0.4 CHF 0.4

China bn bn 1.6% 0.7% 2.3% bn bn 15.0% 14.0%

Organic growth was 2.3%, with RIG of 1.6%. Pricing reached 0.7%, turning positive in the second quarter. Foreign exchange had a positive impact of 3.8%. Reported sales in Zone Greater China increased by 6.0% to CHF 2.7 billion.

Zone Greater China reported low single-digit organic growth, impacted by COVID-19-related movement restrictions. Growth was supported by robust demand in e-commerce channels and continued innovation.

By product category, coffee posted mid single-digit growth. Starbucks products and Nescafé soluble coffee saw continued momentum. Culinary reported mid single-digit growth, helped by increased distribution and new product launches. Confectionery recorded mid single-digit growth, led by strong sales development for Shark wafer chocolate and solid demand for Hsu Fu Chi. Purina PetCare posted high single-digit growth, with particular strength for Mon Petit, Fancy Feast and recently launched DentaLife. Growth in Infant Nutrition turned positive, with improving market share trends. The business saw a strong recovery in the second quarter, particularly for NAN and illuma. Nestlé Professional reported a sales decrease, reflecting restrictions on out-of-home channels.

The Zone's underlying trading operating profit margin increased by 100 basis points. Favorable mix and disciplined cost control more than offset cost inflation.

Nespresso

-- 2.6% organic growth: - 1.6% RIG; 4.2% pricing.

-- The underlying trading operating profit margin decreased by 170 basis

points to 24.3%.

Sales Sales Organic UTOP UTOP Margin Margin

6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021

CHF 3.2 CHF 3.2 CHF 0.8 CHF 0.8

Nespresso* bn bn - 1.6% 4.2% 2.6% bn bn 24.3% 26.0%

(*) RIG, pricing and organic growth figures exclude the Russia region, with a corresponding impact on the M&A and foreign exchange lines

Organic growth was 2.6%, with increased pricing of 4.2%. RIG was - 1.6% following strong double-digit growth in 2021 during the pandemic. Foreign exchange negatively impacted sales by 1.7%. Reported sales in Nespresso increased by 1.0% to CHF 3.2 billion.

Nespresso reported low single-digit organic growth, following strong double-digit growth in 2021. Out-of-home channels saw further recovery, with strong demand for the Momento system. The Vertuo system saw sustained momentum and is now sold in 44 countries. Innovation continued to resonate with consumers with new product launches, including the summer collection of Barista Creations Liminha over Ice and Exotic Liminha over Ice.

By geography, North America posted double-digit growth with continued market share gains. Europe reported a sales decrease, following a high base of comparison in 2021. Other regions combined recorded high single-digit growth.

In the second quarter, Nespresso obtained global certification as a B Corp, reflecting the business's ongoing commitment to sustainability and transparency.

The underlying trading operating profit margin of Nespresso decreased by 170 basis points, impacted by investments in the roll-out of the Vertuo system and cost inflation.

Nestlé Health Science

-- 6.6% organic growth: 4.4% RIG; 2.2% pricing.

-- The underlying trading operating profit margin increased by 20 basis

points to 13.7%.

Sales Sales Organic UTOP UTOP Margin Margin

6M-2022 6M-2021 RIG Pricing growth 6M-2022 6M-2021 6M-2022 6M-2021

Nestlé

Health CHF 3.2 CHF 1.9 CHF 0.4 CHF 0.3

Science* bn bn 4.4% 2.2% 6.6% bn bn 13.7% 13.5%

(*) RIG, pricing and organic growth figures exclude the Russia region, with a corresponding impact on the M&A and foreign exchange lines

Organic growth was 6.6%, with robust RIG of 4.4% and increased pricing of 2.2%. Net acquisitions increased sales by 57.2%, largely related to the acquisition of the core brands of The Bountiful Company as well as Orgain. Foreign exchange positively impacted sales by 1.7%. Reported sales in Nestlé Health Science increased by 65.5% to CHF 3.2 billion.

Nestlé Health Science posted high single-digit organic growth, building on strong sales developments in 2020 and 2021. Growth was supported by innovation, geographic expansion and market share gains.

Consumer Care posted mid single-digit growth. Healthy-aging products grew at a double-digit rate, supported by Boost and Nutren. Vitamins, minerals and supplements reported low single-digit growth, following a high base of comparison and supply chain constraints. Sales of Pure Encapsulations, a super-premium offering recommended by healthcare professionals, grew at a double-digit rate. Vital Proteins saw robust demand, helped by geographic expansion. Orgain, the newly acquired plant-based nutrition business, posted strong double-digit growth, based on innovation and increased distribution.

Medical Nutrition reported double-digit growth, with strong sales developments for pediatric products, Althéra, Alfaré and Alfamino. Zenpep posted strong growth with market share gains. Palforzia, the peanut allergy treatment, saw further patient adoption.

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July 28, 2022 01:15 ET (05:15 GMT)