Press Release: Nestle: Nestlé reports full-year results for 2023

[Ad hoc announcement pursuant to Art. 53 LR]

This press release is also available in Français (pdf) https://www.globenewswire.com/Tracker?data=wwn3hGHJxIUBRMH9W12TyLoWGFihZOUl8EC-Nu4ZFm-g2n4MVxnKzVb8u0Fgvojykca-QV8GNc4ZZGl7M4HjWEz3as72XLc8pWLSDaYrwyHYJuXwl2uft096T2ZB5HA3642dol5npYKeDbCEFv1njFjOUGE9oc1LjKc-3MdhiGhofnumLGlP3RuvipIz54sp and Deutsch (pdf) https://www.globenewswire.com/Tracker?data=RkUVTMjHM9l2nXVNUJ54UO3f5oKq4GPas1tj7FhAzxUx70lhngnffvc0zPPimwau_mYo_BDpeaG9dLeQTJ-4cfPQZYDnL3-5F3sPzo-uPaPwgNxhe78gXhaaZofRpCCtMnTW3BJan2RwcmOLPfW2B6Ex9mufdv8cMZi8cVNTt_R5n-A2mfrn0IeM7bwhCj5_

Follow today's events live

09:00 CET Press conference webcast https://www.globenewswire.com/Tracker?data=MdgWTPPTbn1GLDO5wuermF12epQSPl98M8Yw4oGeeO5UNirZ2FLqSwEmIkcVExCPI87WSP7aM2t7lTStn-PoRktwfhrBPchlOvzQUXgJb3UoM545Dgot8CL7JZ9cZNhop-jUhoUrsDgURYGy_MjmZRDIPphCqkCkMDNSc86VEAM=

14:00 CET Investor call audio webcast https://www.globenewswire.com/Tracker?data=_kjkq4XsMZXntVU7jUrO0qEqoJHUFV7n3MN05nXPnYPFzSMSyORp_EY42ecDp71-vzGwHuo27S0kasUKEGOfU_CjpiOBY08NOPDMKl55QGLE3LYy-WgTXzFtaS8E-pPhQOE2IexNA4RueDP7uDEeADBnC5628IBWxFuz9M3in0I=

Full details on our website https://www.globenewswire.com/Tracker?data=xRhEWfJQI9SMaQCHdYA1jBNi8XbrtcV_zuW6zbCrRfTtwpy028Kx5Dod3NGuCXQt2ZI-MJCCI1ccIlnYRX5OTWp2uFOVC2fkVydmJU0WkIFTjKXtHg10dO-cAt3pNX1Ds8mIT-yu1qy7u9mj1WIPFif9LrUFZwAhtaz51AXgdxY=

Reports published today

2023 Financial Statements (pdf) https://www.globenewswire.com/Tracker?data=DQF1-YQK5Wk15V38Dq-1tBH6RQz5N2eDEqfqK1FwOg_3TXxjSpXaEAYasmb5MrsAOfsMtFgye0tO7IcRaHKrP3GFOzmlFmIurwjhnt7-_WQRv6NISXtmHCKIoSHRIjDQRWUvRJc-UpG8NYB7n2Gzfg4WpwF7hnh1islpsTy8F_w_SXVUcnyiwARq3xrwwTck

Corporate Governance Report (pdf) https://www.globenewswire.com/Tracker?data=lq85uaU6mKuk9vL5MCAX-SVv6RryL1gpLfkq2c7OeTs0XMPvBF0bUMlrER2qKCG3qGsreSWDTH4w-NYwFjDaXkoO56WmdWOlpuW79m6icUm0bh8LtJ2cCQideoronsW_0m6PC4V-32pSvyb8Jbcjiy3mF0k8B7w4Bs8scNuN1gVBypZ4DB84ucfVONNlCdFO

Annual Review (pdf) https://www.globenewswire.com/Tracker?data=gU5yNXAVetZUblxv_JSfivsq7ZbwHuk-Xfe9_G_wfJ2IyXzWjRTElp6l4_C91c-TYanB7L7BHYuTCTwxZLFAR-T_BNU49t0rRGlgj7L2ipmj6JgZBI8tqN71D1r4Gq4a6IGu-_iLQEbOEoMb7dMYYMiffX_7sMzIzMYEAWyU7uI= | Annual Review online https://www.globenewswire.com/Tracker?data=gU5yNXAVetZUblxv_JSfihzQot0htwEWx-1OKimsAbN9EZFS3trczXayUep9d9qgVxj-lorPbhHWOcywF-eBaRxwGeu1D-a8LlT2lsheW4OwAxCKalai3tpVfhy91DJm

Creating Shared Value and Sustainability Report (pdf) https://www.globenewswire.com/Tracker?data=__orbQohBnSiZkHUJB_qb9E3_8-mfUOShOOoj4ddDgxOvW6Bcez6ZQ7kZjTkNT9t-wot-QNGj77dAImsSgD-WMbGYGedoFyasjN90UNX6TjlWAE8ru_GBYbAPYayp6j4CA8jyvPC-LQ-37K8YrtoHCedQd457Whx5tlameKjVbOpr2yCFdjPIHh1RB1z64y7_6oEZxKgtUOlrCqAhGFa15jg37wdcy6CEVx7wPvDtt65dVpKlT_N0y8AgHxvUkyP

Other language versions available in Publications https://www.globenewswire.com/Tracker?data=nSJTgHDo8evzRomsVwRYittO845DsfIochcdTUXVEQqDy5Ex97VfIqeCVy02QmpkYyYUTCOcmvh4BuO0INWcLpJW18-fMxiO9QXijLvBuLyEd6l760wCzVYfGCLeSTNK

.............

Vevey, February 22, 2024

Nestlé reports full-year results for 2023

-- Organic growth reached 7.2%, with pricing of 7.5% and real internal

growth (RIG) of -0.3%. Growth was broad-based across geographies and

categories.

-- Total reported sales were CHF 93.0 billion, a decrease of 1.5% (FY-2022:

CHF 94.4 billion). Foreign exchange decreased sales by 7.8%. Net

divestitures had a negative impact of 0.9%.

-- The underlying trading operating profit (UTOP) margin was 17.3%,

increasing by 20 basis points on a reported basis and by 40 basis points

in constant currency. The trading operating profit (TOP) margin was 15.6%,

increasing by 160 basis points.

-- Underlying earnings per share increased by 8.4% in constant currency and

by 0.1% on a reported basis to CHF 4.80. Earnings per share increased by

23.7% to CHF 4.24 on a reported basis, mainly reflecting one-off items in

the prior year.

-- Free cash flow was CHF 10.4 billion, an increase of CHF 3.8 billion

following a significant reduction in working capital.

-- Board proposes a dividend of CHF 3.00 per share, an increase of 5

centimes, marking 29 consecutive years of dividend growth. In 2023, CHF

12.8 billion were returned to shareholders through a combination of

dividend and share buybacks.

-- 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%.

Mark Schneider, Nestlé CEO, commented: "Unprecedented inflation over the last two years has increased pressure on many consumers and impacted demand for food and beverage products. In this challenging context, we delivered strong organic growth and solid margin improvement with increased marketing and other growth investments. Our free cash flow generation returned to historical levels.

Looking to 2024, we are prioritizing volume- and mix-led growth with increased brand support, as we enhance value for consumers through active innovation and renovation, premiumization, affordability and more nutritious options. We will continue to focus capital allocation on our fast-growing billionaire brands, which enables us to deliver dependable growth while enhancing brand loyalty.

To drive market share gains, our key priorities are delighting consumers through differentiated offerings and focusing on superior execution. We are confident that we have the right strategy, portfolio and capabilities to deliver on our 2025 targets."

Group Results

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

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%

Group sales

Organic growth was 7.2%. Pricing was 7.5%, reflecting cost inflation over the last two years. RIG was -0.3%, impacted by soft consumer demand, capacity constraints and a temporary supply disruption for vitamins, minerals and supplements in the second half. As expected, RIG turned positive in both the fourth quarter and the second half, supported by the benefits from portfolio optimization, improving customer service levels and increased brand support.

Growth was broad-based across most geographies and categories. In developed markets, organic growth was 6.4%, led by pricing with negative RIG. In emerging markets, organic growth was 8.4%, driven by pricing and positive RIG.

By product category, Purina PetCare was the largest contributor to organic growth, with strong momentum across all channels. Purina ONE, Purina Pro Plan and Friskies all recorded double-digit growth. Sales of Purina Pro Plan reached almost CHF 3 billion. Coffee saw high single-digit growth, with positive sales developments across brands, supported by strong demand in out-of-home channels. Infant Nutrition posted high single-digit growth, based on continued momentum for premium infant formula, including human milk oligosaccharides (HMOs) products as well as specialty formulas. Dairy reported mid single-digit growth, led by fortified milks, coffee creamers and home-baking products. Confectionery recorded high single-digit growth, fueled by continued double-digit growth for KitKat. Prepared dishes and cooking aids posted mid single-digit growth, with robust demand for Maggi across geographies and segments. Water posted mid single-digit growth, led by S.Pellegrino and Acqua Panna. Nestlé Health Science recorded low single-digit growth, as continued strong momentum for Medical Nutrition was partly offset by temporary supply constraints in vitamins, minerals and supplements.

By channel, organic growth in retail sales remained robust at 6.5%. E-commerce sales grew by 13.4%, reaching 17.1% of total Group sales. Organic growth of out-of-home channels was 15.9%.

Net divestitures decreased sales by 0.9%, largely related to the divestment of a majority stake in Freshly as well as the disposal of the Gerber Good Start infant formula brand in 2022. The impact on sales from foreign exchange was negative at 7.8%, following significant and broad-based appreciation of the Swiss franc. Total reported sales decreased by 1.5% to CHF 93.0 billion.

Underlying Trading Operating Profit

The underlying trading operating profit margin increased by 20 basis points to 17.3% on a reported basis and by 40 basis points in constant currency. Underlying trading operating profit decreased by 0.3% to CHF 16.1 billion, due to currency appreciation.

(MORE TO FOLLOW) Dow Jones Newswires

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