Nestle S.a. · SIX:NESN
Nestle — Q3 2023 Earnings Presentation
28 slides from Nestle's earnings presentation, Oct 19, 2023
Slide 1: Nine-month sales 2023
Nine-month sales 2023 Investor call
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: Nine-month sales 2023 - Mark Schneider, CEO
Nine-month sales 2023 Mark Schneider, CEO
Slide 4: Key messages
Key messages • Strong broad-based organic sales growth of 7.8% – Pricing of 8.4%, reflecting historic input cost inflation – Real internal growth (RIG) of -0.6%, impacted by portfolio optimization and capacity constraints • RIG expected to turn positive for the second half – Positive RIG in the thir
Slide 5: Nestlé Health Science confirming mid-term objectives
Nestlé Health Science confirming mid-term objectives Significant growth and synergy opportunity – Market expected to grow at a mid single-digit rate. Vitamins, minerals and supplements category has returned to positive growth – Cost synergy opportunities of 300 basis points Key achievements to date
Slide 6: Creating economic opportunities for the world’s youth
Creating economic opportunities for the world’s youth 10 years of Nestlé Needs YOUth • Making people more employable • Inspiring the next generation of farmers • Turning young innovators into entrepreneurs 6 October 19, 2023 Nestlé nine-month sales 2023
Slide 7: 2023 guidance confirmed
2023 guidance confirmed • Organic sales growth guidance in the 7% to 8% range • Underlying trading operating profit margin expected to be between 17.0% and 17.5% • Underlying earnings per share in constant currency expected to increase between 6% and 10% 7 October 19, 2023 Nestlé nine-month sales 20
Slide 8: Nine-month sales 2023 - François-Xavier Roger, CFO
Nine-month sales 2023 François-Xavier Roger, CFO
Slide 9: Nine-month sales growth
Nine-month sales growth OG +7.8% -0.8% -7.4% +8.4% -0.6% 69.1 68.8 Reported sales growth -0.4% -30 9M-2022 sales RIG Pricing Net M&A Foreign 9M-2023 sales CHF bn exchange CHF bn 9 October 19, 2023 Nestlé nine-month sales 2023
Slide 10: Strong growth across developed and emerging markets
Strong growth across developed and emerging markets Developed Emerging Sales (in CHF) 40.2 bn 28.6 bn % of Group sales 58% 42% RIG -1.3% 0.3% Pricing 8.2% 8.6% OG 6.9% 9.0% 10 October 19, 2023 Nestlé nine-month sales 2023
Slide 11: RIG trending to positive territory
RIG trending to positive territory Key factors -0.3% -0.5% • Moderation of new pricing -1.1% • Benefits of portfolio optimization • Increased marketing investments -2.6% Q4-22 Q1-23 Q2-23 Q3-23 RIG as reported Underlying RIG RIG adjusted foradjusted number for trading days of trading days 11 October
Slide 12: Seeing benefits of portfolio optimization
Seeing benefits of portfolio optimization Freeing up resources • Discontinuation of low-growth, low-margin businesses nearly completed • Annualized impact: ~ CHF 0.7 bn sales 97% Reallocating resources • Material improvement in customer service levels* 91% Dec-22 Mar-23 Jun-23 Sep-23 * Excludes Nest
Slide 13: Pricing moderating
Pricing moderating 10.1% 9.8% Key factors 9.1% • High base of comparison 6.3% • Cost inflation moderating for some commodities, while remaining at high level Q4-22 Q1-23 Q2-23 Q3-23 13 October 19, 2023 Nestlé nine-month sales 2023
Slide 14: Zone North America
Zone North America Sales CHF 19.0 bn Real internal growth -0.9% Pricing 8.9% Organic growth 8.0% • Broad-based organic growth despite a challenging consumer environment • Favorable mix and strong momentum in e-commerce and out-of-home channels supported growth • Purina PetCare, Nestlé Professional a
Slide 15: Zone Europe
Zone Europe Sales CHF 14.1 bn Real internal growth -2.3% Pricing 11.1% Organic growth 8.8% • Strong organic growth led by pricing. RIG impacted by capacity constraints and portfolio optimization • E-commerce momentum and out-of-home channels supported growth • Purina PetCare, coffee and confectioner
Slide 16: Zone Asia, Oceania and Africa
Zone Asia, Oceania and Africa Sales CHF 13.2 bn Real internal growth 0.0% Pricing 8.6% Organic growth 8.6% • Strong organic growth, driven by pricing • Continued momentum for e-commerce and out-of-home channels supported growth • Infant nutrition, culinary and coffee were the key growth drivers 16 O
Slide 17: Zone Latin America
Zone Latin America Sales CHF 9.1 bn Real internal growth -0.6% Pricing 10.5% Organic growth 10.0% • Sustained double-digit organic growth led by pricing • Strong operational execution and continued momentum of out-of-home channels supported growth • Confectionery, infant nutrition and coffee were th
Slide 18: Zone Greater China
Zone Greater China Sales CHF 3.6 bn Real internal growth 2.3% Pricing 2.6% Organic growth 4.9% • Positive organic growth, driven by both RIG and pricing • Strong sales developments for out-of-home businesses and e-commerce momentum supported growth • Nestlé Professional, confectionery and culinary w
Slide 19: Nestlé Health Science
Nestlé Health Science Sales CHF 4.9 bn Real internal growth -1.9% Pricing 4.4% Organic growth 2.5% • Pricing-led organic growth, with negative RIG • Consumer Care saw negative growth, reflecting short- term supply constraint for vitamins, minerals and supplements in the third quarter • Active nutrit
Slide 20: Nespresso
Nespresso Sales CHF 4.6 bn Real internal growth 1.6% Pricing 3.5% Organic growth 5.2% • Organic growth driven by pricing and sequentially improving RIG • Vertuo, strong demand in out-of-home channels and innovation supported growth • North America posted double-digit growth. Europe reported positive
Slide 21: Broad-based growth across categories
Broad-based growth across categories Organic sales growth % 13.1% 10.1% 7.8% 6.7% 6.6% 6.3% 5.3% 3.5% Total Group Powdered and PetCare Nutrition and Prepared dishes Milk products Confectionery Water Liquid Beverages Health Science and cooking aids and Ice cream 21 October 19, 2023 Nestlé nine-month
Slide 22: Q&A
Q&A
Slide 23: Supporting slides
Supporting slides
Slide 24: 9M-2023 Operating segments – topline summary
9M-2023 Operating segments – topline summary 9M-2023 sales Reported Sales RIG Pricing OG Net M&A F/X sales growth (CHF m) % % % % % % Zone North America 19 027 -0.9 8.9 8.0 -2.2 -6.1 -0.3 Zone Europe 14 144 -2.3 11.1 8.8 -2.4 -5.2 1.3 Zone AOA 13 223 0.0 8.6 8.6 -0.1 -13.3 -4.8 Zone Latin America 9
Slide 25: 9M-2023 Products – topline summary
9M-2023 Products – topline summary 9M-2023 sales Sales RIG Pricing OG (CHF m) % % % Powdered and liquid beverages 18 257 -0.3 7.0 6.7 Water 2 606 -6.9 10.4 3.5 Milk products and Ice cream 8 100 -3.0 9.6 6.6 Nutrition and Health Science 11 470 -0.8 7.1 6.3 Prepared dishes and cooking aids 8 649 -3.2
Slide 26: 9M-2023 historical eight quarters
9M-2023 historical eight quarters Period RIG% Pricing % OG % 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 Q1-2023 -0.5 9.8 9.3 Q2-2023 -1.1 9.1 8.0 Q3-2023 -0.3 6.3 6.0 26 October 19, 2023 Nestlé nine-month sales 2023
Slide 27: 9M-2023 Currency overview
9M-2023 Currency overview Weighted average rate 9M-2022 9M-2023 Variation in % US Dollar 1 USD 0.953 0.902 -5.3 Euro 1 EUR 1.012 0.978 -3.4 Chinese Yuan Renminbi 100 CNY 14.415 12.866 -10.7 Brazilian Real 100 BRL 18.625 18.014 -3.3 Philippine Peso 100 PHP 1.778 1.625 -8.6 UK Pound Sterling 1 GBP 1.1
Slide 28: Abbreviations
Abbreviations • OG Organic growth • RIG Real internal growth • AOA Zone Asia, Oceania, and Africa • LATAM Zone Latin America • GC Zone Greater China 28 October 19, 2023 Nestlé nine-month sales 2023