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2021 Half-Year Report (pdf)
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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% toCHF 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. OnJuly 26, 2021 , Nestlé and Starbucks strengthened their collaboration to bring ready-to-drink coffee beverages to select markets acrossSouth-East Asia ,Oceania andLatin 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.
Nestlé continues to invest for future profitable growth. We are creating a global leader in vitamins, minerals and supplements with the acquisition of
Group Results
Zone AMS | Zone EMENA | Zone AOA | Nespresso | Nestlé Health 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
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,
Net divestitures decreased sales by 3.1%, largely related to the divestments of Nestlé Waters North America brands, the
Underlying Trading Operating Profit
Underlying trading operating profit increased by 1.3% to
Gross margin increased by 20 basis points to 48.8%. Consumer-facing marketing expenses1 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
_______
1 2019 figure excludes Nestlé
Net Financial Expenses and Income Tax
Net financial expenses decreased by 6.9% to
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
Underlying earnings per share increased by 10.5% in constant currency and increased by 8.3% on a reported basis to
Cash Flow
Cash generated from operations was essentially unchanged at
Share Buyback Program
In the first half, the Group repurchased
Net Debt
Net debt increased to
Portfolio Management
Nestlé is transforming its global water business, sharpening its focus on international premium and mineral water brands and healthy hydration products. On
Nestlé Health Science continues to focus on building a nutrition and health powerhouse. On
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
Zone
- 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 6M-2021 | Sales 6M-2020 | RIG | Pricing | Organic growth | UTOP 6M-2021 | UTOP 6M-2020 | Margin 6M-2021 | Margin 6M-2020 | |
Zone AMS | 5.3% | 2.3% | 7.6% | 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
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.
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
- 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 andNorth 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 6M-2021 | Sales 6M-2020 | RIG | Pricing | Organic growth | UTOP 6M-2021 | UTOP 6M-2020 | Margin 6M-2021 | Margin 6M-2020 | |
Zone EMENA | 6.7% | 0.6% | 7.3% | 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
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
By product category, coffee and
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
- 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 andOceania 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 6M-2021 | Sales 6M-2020 | RIG | Pricing | Organic growth | UTOP 6M-2021 | UTOP 6M-2020 | Margin 6M-2021 | Margin 6M-2020 | |
Zone AOA | 6.3% | 0.5% | 6.8% | 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
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.
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
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 6M-2021 | Sales 6M-2020 | RIG | Pricing | Organic growth | UTOP 6M-2021 | UTOP 6M-2020 | Margin 6M-2021 | Margin 6M-2020 | |
Nespresso | 13.8% | 0.8% | 14.6% | 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
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
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 6M-2021 | Sales 6M-2020 | RIG | Pricing | Organic growth | UTOP 6M-2021 | UTOP 6M-2020 | Margin 6M-2021 | Margin 6M-2020 | |
Nestlé Health Science | 13.6% | 0.0% | 13.6% | 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
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.
By geography, the
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
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 inDerbyshire, 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
This plan expands on the company's ongoing work to certify all Nestlé Waters' sites according to the
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
Annex
Half-year sales and underlying trading operating profit (UTOP) overview by operating segment
Zone AMS | Zone EMENA | Zone AOA | Nespresso | Nestlé Health 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
Powdered & liquid beverages | Water | Milk products & ice cream | Nutrition & Health Science | Prepared dishes & cooking 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).
Contacts:
Media:
Christoph Meier Tel.: +41 21 924 2200
mediarelations@nestle.com
Investors:
Luca Borlini Tel.: +41 21 924 3509
ir@nestle.com
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