Press Release: Nestle: Nestlé reports full-year -4-

Nespresso

-- 5.3% organic growth: 2.0% RIG; 3.3% pricing.

-- The underlying trading operating profit margin of Nespresso decreased by

120 basis points to 20.3%.

Sales Sales Organic UTOP UTOP Margin Margin

2023 2022 RIG Pricing growth 2023 2022 2023 2022

CHF CHF CHF CHF

6.4 6.4 1.3 1.4

Nespresso bn bn 2.0% 3.3% 5.3% bn bn 20.3% 21.5%

Organic growth was 5.3%, with pricing of 3.3%. RIG was 2.0%. Foreign exchange negatively impacted sales by 6.0%. Reported sales in Nespresso decreased by 1.2% to CHF 6.4 billion.

The key growth contributor was the Vertuo system, which continued to see broad-based momentum. Growth in out-of-home channels was also strong, with further adoption of the Momento system, particularly in the office segment. Innovation continued to resonate with consumers, including the launch of home compostable coffee capsules and the ultra-premium N 20 limited edition, a unique arabica variety. In 2023, Nespresso was recognized as one of the top 100 most valuable brands in the world(1).

By geography, North America posted double-digit growth, with continued market share gains. Europe reported low single-digit growth. Other regions combined saw mid single-digit growth.

The underlying trading operating profit margin of Nespresso decreased by 120 basis points. Significant cost inflation and the appreciation of the Swiss franc more than offset pricing actions and cost efficiencies. The business continued to invest in the rollout of the Vertuo system as well as in brand marketing.

(1) Source: Interbrand annual ranking

Business as a force for good: Net Zero plan on track

Nestlé has achieved a net reduction of 13.5% of its greenhouse gas (GHG) emissions versus its 2018 baseline, while continuing on its growth path over the same period. Advancing towards Net Zero, the company moved past peak carbon in 2019 and has successfully decoupled its growth from emissions. Nestlé is on track to reach a 20% reduction of GHG emissions by 2025.

For the first time, the company now also provides transparency on the reductions of specific gases. For example, it has achieved a reduction of 15.3% of methane versus the 2018 baseline. This significant reduction was possible due to Nestlé's focus on dairy, as its single largest source of methane emissions.

Nestlé is making its own operations more energy efficient and is increasing its use of renewable electricity. As of the end of 2023, 91.9% of the electricity in its global manufacturing sites was from renewable sources. The goal is to reach 100%.

The company is additionally continuing to reduce its value chain emissions (Scope 3). It works with its suppliers and the farmers it sources from to help them tackle their emissions and transition to regenerative agriculture. At the end of last year, 15.2% of Nestlé's raw materials were sourced from farmers adopting such practices. The company's ambition is to get to 20% by 2025. It has also reduced the use of fossil fuels in areas such as product packaging and distribution.

More details can be found in Nestlé's Creating Shared Value and Sustainability Report (pdf, 20Mb) https://www.globenewswire.com/Tracker?data=3PvGVFqKHu2tAnUvBceVlmyC5qayBTOS4FYKoCeu_c7BmZhb-AzRAiEL2J5A9JwuGle42nKLyhLpGH14AQcUfY7R_VDxyt_CC1FdRI9qMFzouL5gqXMedK3yvq_NrSxkI12wgsGTOl5iNS3Yn3hIJz85JJqUn-gmt_4SHT1DQF-XBXfzWajWrTKdhLHcksRGkmntPYC-FEjbwBF8GcK0OM4hwwu3OP3PBuzJtTVK-GEmMparjm-IEFOia7Z7TCute6NE4NChi4Pl0JHThrKuRA==, which was published today.

Outlook

2024 outlook: we expect organic sales growth around 4% and a moderate increase in the underlying trading operating profit margin. Underlying earnings per share in constant currency is expected to increase between 6% and 10%.

2025 mid-term targets fully confirmed: mid single-digit organic sales growth and an underlying trading operating profit margin range of 17.5% to 18.5% by 2025. Underlying earnings per share in constant currency to increase between 6% and 10%.

Annex

Full-year sales and underlying trading operating profit (UTOP) overview by operating segment

Zone Zone Zone Nestlé

Total North Zone Zone Latin Greater Health Other

Group America Europe AOA America China Science Nespresso Businesses

Sales

FY-2023

(CHF m) 92 998 25 995 19 098 17 519 12 196 5 037 6 498 6 372 283

Sales

FY-2022

(CHF m) 94 424 26 328 19 128 18 484 11 819 5 351 6 602 6 448 264

Real

internal

growth

(RIG) - 0.3% - 0.3% - 2.4% 0.3% 0.3% 2.5% - 3.2% 2.0% 11.5%

Pricing 7.5% 7.6% 10.6% 8.0% 8.9% 1.7% 4.8% 3.3% 1.7%

Organic

growth 7.2% 7.3% 8.2% 8.3% 9.2% 4.2% 1.6% 5.3% 13.2%

Net M&A - 0.9% - 1.7% - 3.4% - 0.1% - 0.2% 0.1% 3.1% - 0.5% - 0.0%

Foreign

exchange - 7.8% - 6.8% - 4.9% - 13.5% - 5.8% - 10.2% - 6.2% - 6.0% - 5.7%

Reported

sales

growth - 1.5% - 1.3% - 0.2% - 5.2% 3.2% - 5.9% - 1.6% - 1.2% 7.4%

FY-2023

Underlying

TOP (CHF

m) 16 053 5 768 3 127 4 109 2 520 832 777 1 291 - 12

FY-2022

Underlying

TOP (CHF

m) 16 103 5 528 3 138 4 237 2 501 862 899 1 388 - 17

FY-2023

Underlying

TOP

Margin 17.3% 22.2% 16.4% 23.5% 20.7% 16.5% 12.0% 20.3% - 4.3%

FY-2022

Underlying

TOP

Margin* 17.1% 21.0% 16.4% 22.9% 21.2% 16.1% 13.6% 21.5% - 6.1%

Full-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

FY-2023

(CHF m) 92 998 24 786 3 320 10 981 15 278 11 666 8 107 18 860

Sales

FY-2022

(CHF m) 94 424 25 218 3 536 11 289 15 678 12 484 8 118 18 101

Real

internal

growth

(RIG) - 0.3% 0.0% - 5.1% - 1.6% - 1.6% - 2.5% 1.5% 2.8%

Pricing 7.5% 6.4% 10.0% 7.7% 7.0% 7.4% 7.0% 9.3%

Organic

growth 7.2% 6.4% 4.9% 6.1% 5.4% 4.9% 8.5% 12.1%

FY-2023

Underlying

TOP (CHF

m) 16 053 5 130 351 2 688 2 831 2 136 1 364 3 912

FY-2022

Underlying

TOP (CHF

m) 16 103 5 593 277 2 568 2 990 2 038 1 364 3 706

FY-2023

Underlying

TOP

Margin 17.3% 20.7% 10.6% 24.5% 18.5% 18.3% 16.8% 20.7%

FY-2022

Underlying

TOP

Margin 17.1% 22.2% 7.8% 22.7% 19.1% 16.3% 16.8% 20.5%

Contacts:

Media:

Christoph Meier Tel.: +41 21 924 2200

mediarelations@nestle.com https://www.globenewswire.com/Tracker?data=KccdU-Z2sQ6X5NgIsN7ZSBqeA_mZieHUnbQoU5NJuoUvWmRyhyJM_ZA1S04FKi97XYGithnGgIllhhXXmz10ZlXr4-hLs-sblTHi0NY8DFtG8diWN1wfs5OpRibP7fNz

Investors:

Luca Borlini Tel.: +41 21 924 3509

ir@nestle.com https://www.globenewswire.com/Tracker?data=Bm2tOkkaB1c6DseEJwTgaVG1miSqHW7sbtP1JP1yd6YmaeeB9iTJSaROg-IhYc2_9CpVE33C5Kql-TS6n40kdg==

(END) Dow Jones Newswires

February 22, 2024 01:15 ET (06:15 GMT)