Slide 1: Full-year results 2022
Full-year results 2022
Slide 2: Disclaimer
Disclaimer This presentation contains forward looking statements which reflect Management’s current views and estimates. The forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements.
Slide 3: Full-year results 2022 - Mark Schneider, CEO
Full-year results 2022 Mark Schneider, CEO
Slide 4: Key messages
Key messages Resilient financial performance • Strong organic sales growth of 8.3%, led by pricing with slightly positive RIG • Underlying trading operating profit margin decreased by 30 bps to 17.1%, reflecting significant cost inflation, partially mitigated by cost efficiencies and growth leverage
Slide 5: 2022 achievements
2022 achievements Categories, regions and channels • PetCare: +14.5% • Coffee: resilient at +8.1%, with Starbucks +CHF 1.5 bn incremental sales since 2018 • Emerging markets: +10.0%, supported by growth in affordable offerings • Out-of-home channels: +23.5% Fixing underperforming businesses • China
Slide 6: Good for You: continued progress on nutrition
Good for You: continued progress on nutrition • Continuing our journey to reduce sodium, sugar and saturated fats • Targeting continued growth in plant-based food & beverages • Empowering consumers to make more informed decisions on food and diet choices • Delivering on our transparency and responsi
Slide 7: Good for the Planet: progress on greenhouse gas reduction
Good for the Planet: progress on greenhouse gas reduction Picture to be • Peak carbon is added behind us • Greenhouse gas emissions now below 2018 level • On track to deliver 20% carbon emission reduction by 2025 vs. 2018 level • Significant reduction expected in 2023 as we reap the benefit of inves
Slide 8: Key focus areas for 2023
Key focus areas for 2023 Strategic • Accelerate portfolio optimization • Drive faster, relevant, impactful innovation • Lead on climate, sustainability and nutrition agendas Operational • Protect volume growth • Drive cost efficiencies • Step-up marketing investments Financial • Restore gross margin
Slide 9: Accelerating portfolio optimization
Accelerating portfolio optimization Strong delivery to date - expanding scope of portfolio optimization beyond SKUs to brands, segments and geographies Freeing up resources via Re-allocating resources toward SKU optimization and portfolio pruning high-growth, high-margin products Select dairy SKUs F
Slide 10: 2023 guidance
2023 guidance • Organic sales growth between 6% and 8% • Underlying trading operating profit margin between 17.0% and 17.5% • Underlying earnings per share growth in constant currency between 6% and 10% 10 February 16, 2023 Nestlé full-year results 2022
Slide 11: Full-year results 2022 - François-Xavier Roger, CFO
Full-year results 2022 François-Xavier Roger, CFO
Slide 12: Resilient financial performance
Resilient financial performance Sales Underlying TOP Underlying Total returns to (in CHF bn) (in CHF bn) EPS growth shareholders (in CHF bn) (in constant currency) +8.4% +9.4% +30.8% +6.5% 94.4 CHF 18.2 16.1 4.84 15.1 13.9 87.1 CHF 4.42 2021 2022 2021 2022 2021 2022 2021 2022 12 February 16, 2023 Ne
Slide 13: Full-year sales growth
Full-year sales growth OG +8.3% +1.1% -0.9% 94.4 +8.2% +0.1% 87.1 Reported sales growth +8.4% -30 FY-2021 sales RIG Pricing Net M&A Foreign FY-2022 sales CHF bn exchange CHF bn RIG, pricing and organic growth figures exclude the Russia region, with a corresponding impact on the M&A and foreign excha
Slide 14: Strong growth across developed and emerging markets
Strong growth across developed and emerging markets Developed Emerging Sales (in CHF) 55.1 bn 39.3 bn % of Group sales 58% 42% RIG -0.8% 1.4% Pricing 7.9% 8.6% OG 7.1% 10.0% 14 February 16, 2023 Nestlé full-year results 2022
Slide 15: Resilient mix, volume and market share in 2022
Resilient mix, volume and market share in 2022 2018 2019 2020 2021 2022 Close to 60% of 2.0% business cells for 8.6% billionaire brands 1.4% gaining / holding 0.6% share Price 0.5% 0.5% 2.2% Mix 1.4% 1.7% 3.7% Volume 1.1% 1.3% 1.5% 1.6% -1.7% High base of comparison and supply constraints Excludes w
Slide 16: Q4-2022 RIG impacted by additional transitory factors
Q4-2022 RIG impacted by additional transitory factors Q4-2022 RIG and Pricing Factors impacting Q4-2022 RIG decline • Normalization of out-of-home growth Price 10.1% • Portfolio and SKU optimization • Temporary capacity constraints in water RIG -2.6% Q4-2022 16 February 16, 2023 Nestlé full-year res
Slide 17: Zone North America
Zone North America Sales CHF 26.3 bn Organic growth 10.3% Real internal growth -1.3% Underlying TOP margin 21.0% vs LY +70 bps • Strong organic growth, driven by pricing. RIG impacted by high base of comparison and supply constraints • Strong operational execution, continued e-commerce momentum and
Slide 18: Zone Europe
Zone Europe Sales CHF 19.1 bn Organic growth 7.2% Real internal growth 0.9% Underlying TOP margin 16.4% vs LY -190 bps • Robust organic growth, led by pricing. Positive RIG despite high base of comparison and supply constraints • Resilient performance in a challenging and disrupted environment • Pur
Slide 19: Zone Asia, Oceania and Africa
Zone Asia, Oceania and Africa Sales CHF 18.5 bn Organic growth 8.2% Real internal growth 0.1% Underlying TOP margin 22.9% vs LY -110 bps • Strong organic growth, reflecting pricing execution across all geographies and categories • Further recovery of out-of-home channels and innovation supported gro
Slide 20: Zone Latin America
Zone Latin America Sales CHF 11.8 bn Organic growth 13.1% Real internal growth 1.5% Underlying TOP margin 21.2% vs LY -70 bps • Sustained double-digit organic growth, with increased pricing and resilient RIG • Broad-based growth driven by operational execution and continued momentum of out-of-home c
Slide 21: Zone Greater China
Zone Greater China Sales CHF 5.4 bn Organic growth 3.5% Real internal growth 1.0% Underlying TOP margin 16.1% vs LY +260 bps • Solid organic growth, with positive pricing and RIG, despite the impact of movement restrictions • Strong operational execution, robust e-commerce momentum and continued inn
Slide 22: Nestlé Health Science
Nestlé Health Science Sales CHF 6.6 bn Organic growth 4.0% Real internal growth 0.6% Underlying TOP margin 13.6% vs LY Flat • Robust organic growth with share gains, supported by pricing, innovation and distribution gains • Consumer Care saw positive growth, as strong demand for active nutrition off
Slide 23: Nespresso
Nespresso Sales CHF 6.4 bn Organic growth 3.5% Real internal growth -1.7% Underlying TOP margin 21.5% vs LY -150 bps • Organic growth driven by pricing. RIG impacted by a high base of comparison during the pandemic • Sustained momentum for Vertuo, a strong recovery of out-of-home channels and innova
Slide 24: Broad-based growth across categories
Broad-based growth across categories Organic sales growth % 14.5% 11.0% 9.4% 8.3% 8.0% 7.4% 5.4% 3.1% Total Group Powdered and PetCare Nutrition and Prepared dishes Milk products Confectionery Water Liquid Beverages Health Science & cooking aids and Ice cream 24 February 16, 2023 Nestlé full-year re
Slide 25: Underlying trading operating profit margin by category
Underlying trading operating profit margin by category In % of sales 22.7% 22.2% 20.5% 19.1% 17.1% 16.3% 16.8% 7.8% Change in bps -30 -130 -60 +160 -50 -260 +80 -120 vs FY-2021 Total Group* Powdered and PetCare Nutrition and Prepared dishes Milk products Confectionery Water Liquid Beverages Health S
Slide 26: Inflation more than offset pricing, growth leverage and efficiencies
Inflation more than offset pricing, growth leverage and efficiencies 17.X% 17.2% 17.4% 17.4% 17.1% 17.1% -260 bps +210 bps +20 bps Margin -30 bps on a reported basis and -40 bps in constant currency Underlying TOP Gross Distribution Administration, Underlying TOP FY-2021 margin* marketing, FY-2022 R
Slide 27: Net profit impacted by exceptional items
Net profit impacted by exceptional items % of sales 2022 vs 2021 Underlying trading operating profit 17.1% -30 bps Restructuring +10 bps Impairment of assets +20 bps Onerous contracts, litigations and other operating income / expenses Flat Trading operating profit 14.0% Flat Gain / loss on disposals
Slide 28: Strong increase in underlying earnings per share
Strong increase in underlying earnings per share -0.6% -1.0% 2.2% CHF 1.8% 4.84 CHF 4.80 6.0% CHF 4.42 Evolution in constant currency +9.4% Evolution on reported basis +8.4% UEPS Operating Share Net finance Others* UEPS FX UEPS FY-2021 performance buyback costs & tax FY-2022 impact FY-2022 in consta
Slide 29: Sustaining strong operating cash flow generation
Sustaining strong operating cash flow generation Cash flow as % sales Cash generated from operations 20.1% 20.1% 20.1% 20.0% 19.3% 19.5% 12.9% 12.1% 11.8% 10.4% 10.0% Impacted by decision to Free cash flow temporarily increase 7.0% inventories and high capex level 2017 2018 2019 2020 2021 2022 Cash
Slide 30: Return on invested capital
Return on invested capital Before goodwill and intangible assets* 41.1% 41.7% 38.8% 39.4% 33.9% 30.6% After goodwill and intangible assets* 14.7% Excludes ** 14.2% 14.3% major impairments 13.1% (predominantly relating 12.1% to businesses sold) 11.4% 12.3% 12.2% 12.2% As reported 9.1% 2017 * 2018 201
Slide 31: Net debt
Net debt In CHF bn CHF 18.2 bn returned to shareholders +3.1 +0.7 -6.6 +7.6 Impacted by temporary increase in inventories 48.2 +10.5 32.9 Net debt increased by CHF 15.3 bn Net debt Share Dividends M&A** Others Free cash Net debt Jan 1, 2022 buyback flow Dec 31, 2022 Net debt / Net debt / Adjusted EB
Slide 32: Full-year results 2022 Q&A
Full-year results 2022 Q&A 32 February 16, 2023 Nestlé full-year results 2022
Slide 33: Thank you!
Thank you! 33 February 16, 2023 Nestlé full-year results 2022
Slide 34: FY-2022 Operating segments – quarterly summary
FY-2022 Operating segments – quarterly summary Q4-2022 sales Sales RIG Pricing OG (CHF m) % % % Zone North America 7 235 -4.9 12.8 7.8 Zone Europe 5 160 -0.8 8.3 7.5 Zone AOA 4 585 -2.8 11.2 8.4 Zone Latin America 3 171 -1.3 14.8 13.5 Zone Greater China 1 508 -1.6 2.2 0.6 Nespresso 1 774 -1.2 5.8 4.
Slide 35: FY-2022 Operating segments – topline summary
FY-2022 Operating segments – topline summary FY-2022 sales Reported Sales RIG Pricing OG Net M&A F/X sales growth (CHF m) % % % % % % Zone North America 26 328 -1.3 11.6 10.3 -3.8 4.7 11.1 Zone Europe 19 128 0.9 6.4 7.2 2.1 -7.6 1.8 Zone AOA 18 484 0.1 8.1 8.2 -0.1 -4.9 3.3 Zone Latin America 11 819
Slide 36: FY-2022 Products – topline summary
FY-2022 Products – topline summary FY-2022 sales Sales RIG Pricing OG (CHF m) % % % Powdered and liquid beverages 25 218 0.2 7.8 8.0 Water 3 536 2.2 8.9 11.0 Milk products and Ice cream 11 289 -4.3 9.6 5.4 Nutrition and Health Science 15 678 1.7 5.7 7.4 Prepared dishes and cooking aids 12 484 -6.9 1
Slide 37: FY-2022 historical eight quarters
FY-2022 historical eight quarters Period RIG% Pricing % OG % Q1-2021 6.4 1.2 7.7 Q2-2021 7.3 1.3 8.6 Q3-2021 4.4 2.1 6.5 Q4-2021 4.0 3.1 7.2 Q1-2022 2.4 5.2 7.6 Q2-2022 0.9 7.7 8.7 Q3-2022 -0.2 9.5 9.3 Q4-2022 -2.6 10.1 7.5 37 February 16, 2023 Nestlé full-year results 2022
Slide 38: FY-2022 Operating segments – revenue and results
FY-2022 Operating segments – revenue and results In CHF m Of which Underlying Net other impairment Trading Trading trading of property, Of which Depreciation Operating Operating income/ plant and restructuring and Sales Profit Profit (expense) equipment costs amortization Zone North America 26 328 5
Slide 39: FY-2022 Products – revenue and results
FY-2022 Products – revenue and results In CHF m Of which Underlying Net other impairment Trading Trading trading of property, Of which Operating Operating income/ plant and restructuring Sales Profit Profit (expense) equipment costs Powdered and Liquid Beverages 25 218 5 593 5 358 (235) (63) (47) Wa
Slide 40: FY-2022 EPS reconciliation (1 of 2)
FY-2022 EPS reconciliation (1 of 2) From net profit to underlying net profit In CHF m FY-2021 FY-2022 Net Profit 16 905 9 270 Restructuring costs 311 2 73 Impairments of property, plant & equipment, goodwill and int. assets 2 614 2 726 Net result on disposal of businesses (235) 79 Other adjustment i
Slide 41: FY-2022 EPS reconciliation (2 of 2)
FY-2022 EPS reconciliation (2 of 2) From underlying trading operating profit In CHF m to underlying net profit FY-2021 FY-2022 Underlying trading operating profit 15 119 16 103 Net financial income / (expense) (873) (1 040) Adjusted taxes (2 945) (3 148) Adjusted income from associates and joint ven
Slide 42: FY-2022 Currency overview
FY-2022 Currency overview Weighted average rate FY-2021 FY-2022 Variation in % US Dollar 1 USD 0.915 0.956 +4.5% Euro 1 EUR 1.081 1.004 -7.1% Chinese Yuan Renminbi 100 CNY 14.179 14.148 -0.2% Brazilian Real 100 BRL 16.988 18.555 +9.2% Philippine Peso 100 PHP 1.855 1.752 -5.5% UK Pound Sterling 1 GBP
Slide 43: Temporary increase in working capital expected to reverse
Temporary increase in working capital expected to reverse Working capital as a % of sales, calculated on a 5-quarter average 1.9% 1.6% 1.4% 0.6% 0.0% 0.1% 2017 2018 2019 2020 2021 2022 * 2017 restated to reflect IFRS 15 and IFRS 16 43 February 16, 2023 Nestlé full-year results 2022
Slide 44: Free cash flow impacted by temporary items
Free cash flow impacted by temporary items In CHF billion 1.1 -3.0 8.7 -0.4 0.2 Temporary increase in the context of supply constraints and the 6.6 energy crisis in Europe Free cash flow Adjusted Working Tax Others Free cash flow FY-2021 EBITDA capital FY-2022 44 February 16, 2023 Nestlé full-year r
Slide 45: Abbreviations
Abbreviations • OG Organic growth • RIG Real internal growth • AOA Zone Asia, Oceania, and Africa • LATAM Zone Latin America • GC Zone Greater China • EPS Earnings per share • COGS Cost of goods sold • FCF Free cash flow • TOP Trading operating profit • UTOP Underlying trading operating profit • Str