Slide 1: Full-year results 2021
Full-year results 2021
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 2021 - Mark Schneider, CEO
Full-year results 2021 Mark Schneider, CEO
Slide 4: Key messages 2021
Key messages 2021 • Strong organic sales growth of 7.5% • Underlying trading operating profit margin decreased by 30 bps to 17.4%, reflecting time delays between cost inflation and pricing adjustments • Underlying EPS growth of 5.8% in constant currency • Portfolio transformation fully on track • Bo
Slide 5: Portfolio geared for mid single-digit organic sales growth
Portfolio geared for mid single-digit organic sales growth Organic sales growth 7.5%* • Investments in fast-growing categories and geographies Sustainable mid single-digit • Fast-paced innovation (4-6%) 3.5% 3.6% • Increased digitalization 3.0% 2.4% • Market share gains • Portfolio rotation 2017 201
Slide 6: Key drivers of accelerated organic sales growth in 2021
Key drivers of accelerated organic sales growth in 2021 • High-growth categories and channels • PetCare: +12.7% organic sales growth • Coffee: +9.7% organic sales growth; Starbucks with CHF 1 bn incremental sales since 2018 • Nestlé Health Science: +13.5% organic sales growth • Plant-based food: +16
Slide 7: Further developing our portfolio
Further developing our portfolio > 85 transactions Divesting under-performing closed or announced or non-core businesses since 2017, equivalent to ~20% of Group sales North Market attractiveness America US Waters Organic sales growth Confectionery Acquiring / investing in high-growth contribution in
Slide 8: Sustainable livelihoods: reducing child labor risks in cocoa
Sustainable livelihoods: reducing child labor risks in cocoa Novel incentive and support program Expanding efforts to tackle child labor risks, building on our Creating Shared Value approach Premium paid to families and linked to: • School enrollment • Sustainable agricultural practices • Agroforest
Slide 9: Nestlé climate roadmap progress update
Nestlé climate roadmap progress update Greenhouse gas (GHG) emissions reductions Million tonnes of CO2e Peak carbon Business as usual 98.3 • Peak carbon is behind us 4.0 • 2 consecutive years of reduction, while business volume has grown significantly Actual emissions 94.3 • On track to reduce emiss
Slide 10: 2022 guidance
2022 guidance • Organic sales growth around 5% • Underlying trading operating profit margin between 17.0% and 17.5% • Underlying earnings per share in constant currency and capital efficiency expected to increase 10 February 17, 2022 Nestlé full-year results 2021
Slide 11: Mid-term outlook
Mid-term outlook • Sustained mid single-digit organic sales growth • Continued moderate underlying trading operating profit margin improvements • Continued prudent capital allocation and capital efficiency improvements 11 February 17, 2022 Nestlé full-year results 2021
Slide 12: Full-year results 2021 - François-Xavier Roger, CFO
Full-year results 2021 François-Xavier Roger, CFO
Slide 13: Full-year sales growth
Full-year sales growth OG +7.5% +2.0% -2.9% +5.5% -1.3% +5.5% 87.1 84.3 Reported sales growth +3.3% -30 FY-2020 sales RIG Pricing Net M&A Foreign FY-2021 sales CHF bn exchange CHF bn 13 February 17, 2022 Nestlé full-year results 2021
Slide 14: Broad-based growth across geographies
Broad-based growth across geographies AMS EMENA AOA Sales 39.1 bn 25.8 bn 22.2 bn (in CHF) RIG 6.4% 5.7% 3.7% Pricing 3.3% 1.2% 0.7% OG 9.6% 6.9% 4.4% Each geography includes zones, Nespresso, Nestlé Health Science and Other Businesses 14 February 17, 2022 Nestlé full-year results 2021
Slide 15: Strong growth across developed and emerging markets
Strong growth across developed and emerging markets Developed Emerging Sales (in CHF) 51.2 bn 35.9 bn % of Group sales 59% 41% RIG 5.9% 4.9% Pricing 1.3% 2.9% OG 7.2% 7.8% 15 February 17, 2022 Nestlé full-year results 2021
Slide 16: Strong momentum in retail and partial recovery in out-of-home
Strong momentum in retail and partial recovery in out-of-home Organic sales growth Retail Out-of-home* FY-2019 FY-2020 FY-2021 FY-2019 FY-2020 FY-2021 7.0% 6.4% 24.5% 3.4% 4.0% -30.4% * Includes Nestlé Professional, foodservice activities of Nespresso, Starbucks products and water, travel retail and
Slide 17: Using multiple levers to offset cost inflation
Using multiple levers to offset cost inflation Pricing Mitigating actions 2.7% • Increasing pricing in a responsible manner • Optimizing product mix 1.3% • Rolling out strategic revenue management tools 0.5% 0.2% • Leveraging efficiencies, cost management initiatives and centralized procurement H1-2
Slide 18: Zone AMS
Zone AMS Sales CHF 33.8 bn Organic growth 8.5% Real internal growth 4.8% Underlying TOP margin 20.8% vs LY +30 bps • Sustained strong momentum, with a balanced contribution from volume, mix and pricing • North America saw high single-digit growth, led by Purina PetCare, Nestlé Professional, coffee a
Slide 19: Zone EMENA
Zone EMENA Sales CHF 21.1 bn Organic growth 7.2% Real internal growth 6.0% Underlying TOP margin 18.5% vs LY -10 bps • Strong organic growth with broad-based share gains • All markets contributed positively, with strong momentum in the UK, Russia, Italy and France • Purina PetCare, coffee and Nestlé
Slide 20: Zone AOA
Zone AOA Sales CHF 20.7 bn Organic growth 4.2% Real internal growth 3.5% Underlying TOP margin 21.8% vs LY -40 bps • Solid organic growth in a difficult economic environment • China saw low single-digit growth, impacted by a sales decline in infant nutrition • Outside of China, Zone posted high-sing
Slide 21: Nespresso
Nespresso Sales CHF 6.4 bn Organic growth 8.8% Real internal growth 8.2% Underlying TOP margin 23.0% vs LY -60 bps • Strong organic growth led by Vertuo and a recovery in boutiques and out-of-home channels • The Americas and AOA posted double-digit growth. EMENA reported mid single-digit growth • Co
Slide 22: Nestlé Health Science
Nestlé Health Science Sales CHF 4.8 bn Organic growth 13.5% Real internal growth 13.4% Underlying TOP margin 13.6% vs LY -290 bps • Strong organic growth, driven by sustained e-commerce momentum, product launches and geographic expansion • Consumer care saw double-digit growth, led by vitamins, mine
Slide 23: Strong growth across most categories
Strong growth across most categories Organic sales growth % 12.7% 8.9% 7.9% 7.5% 6.6% 6.8% 5.9% 1.4% Total Group Powdered and PetCare Nutrition and Prepared dishes Milk products Confectionery Water Liquid Beverages Health Science and cooking aids and Ice cream 23 February 17, 2022 Nestlé full-year r
Slide 24: Underlying trading operating profit margin by category
Underlying trading operating profit margin by category In % of sales 25.3% 23.5% 21.1% 17.4% 17.5% 16.8% 16.0% 9.0% Change in bps -30 +90 -90 -420 -200 +120 +180 -100 vs FY-2020 Total Group* Powdered and PetCare Nutrition and Prepared dishes Milk products Confectionery Water Liquid Beverages Health
Slide 25: Gross margin impacted by delay between cost inflation and pricing actions
Gross margin impacted by delay between cost inflation and pricing actions Gross margin* = (Sales - Cost of good sold) / Sales 49.1% 49.0% 48.7% 48.3%** 47.8% 2017 2018 2019 2020 2021 * Excluding Nestlé Skin Health ** Restated to reflect implementation of IFRS 15, IFRS 16 and reclassification of cert
Slide 26: Strong growth leverage largely offsetting cost inflation
Strong growth leverage largely offsetting cost inflation Underlying trading operating profit margin Flat 17.X% 17.7% -130 bps +80 bps 17.4% +20 bps -30 Margin - 30 bps in constant currency and reported basis 17.4% Includes around -10 bps from one-off impact of the acquisition of the core brands of T
Slide 27: Significant net profit increase
Significant net profit increase % of sales 2021 vs 2020 Underlying trading operating profit 17.4% -30 bps Restructuring -10 bps Impairment of assets -200 bps Onerous contracts, litigations and other operating income / expenses -50 bps Trading operating profit 14.0% -290 bps Gain / loss on disposals
Slide 28: Underlying earnings per share
Underlying earnings per share +0.7% +1.5% -3.0% -0.7% +1.3% CHF 4.46 CHF 4.42 +5.3% CHF 4.21 Evolution in constant currency +5.8% Evolution on reported basis +5.1% UEPS Operating Share Net finance Others*** M&A* UEPS FX UEPS FY-2020 performance buybacks* costs & tax** FY-2021 impact FY-2021 in const
Slide 29: Free cash flow
Free cash flow In CHF billion +0.2 -0.5 10.2 -1.0 -0.2 8.7 Free cash flow Adjusted Working CAPEX and Others Free cash flow FY-2020 EBITDA capital expenditure on FY-2021 intangible assets 29 February 17, 2022 Nestlé full-year results 2021
Slide 30: Continued discipline in working capital management
Continued discipline in working capital management Working capital as a % of sales, calculated on a 5-quarter average 8.5% 2.2% IFRS restatement 1.6% 0.1% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Note: 2017 restated, reflecting implementation of IFRS 15 and IFRS 16 30 February 17, 2022 Nest
Slide 31: Return on invested capital
Return on invested capital Before goodwill and intangible assets* 41.1% 41.7% 38.8% 33.9% 31.7% 30.4% 29.9% 30.6% After goodwill and intangible assets* 14.7% 14.2% Excluding Wyeth 13.1% impairment 12.1% 11.2% 11.4% 10.8% 10.9% 12.2% 2014 2015 2016 2017 2018 2019 2020 2021 * Restated to reflect imple
Slide 32: Net debt
Net debt In CHF bn CHF 13.9 bn returned to shareholders -5.1 +1.4 +7.7 +6.3 -8.7 31.3 32.9 -30 Net debt increased by CHF 1.6 bn Net debt Share Dividends M&A Other Free cash Net debt Jan 1, 2021 buyback (incl. associates/ flow Dec 31, 2021 Net debt / joint ventures and Net debt / Adjusted EBITDA: 1.7
Slide 33: Supporting slides
Full-year results 2021 Supporting slides
Slide 34: FY-2021 Operating segments – quarterly summary
FY-2021 Operating segments – quarterly summary Q4-2021 sales Sales RIG Pricing OG (CHF m) % % % Zone AMS 9 190 3.4 5.2 8.6 Zone EMENA 5 636 4.9 2.5 7.4 Zone AOA 5 563 2.4 2.2 4.5 Nespresso 1 764 2.7 0.5 3.2 Nestlé Health Science 1 585 12.0 0.1 12.1 Other Businesses 56 24.1 -3.2 20.8 Total Group 23 7
Slide 35: FY-2021 Operating segments – topline summary
FY-2021 Operating segments – topline summary FY-2021 sales Reported Sales RIG Pricing OG Net M&A F/X sales growth (CHF m) % % % % % % Zone AMS 33 779 4.8 3.7 8.5 -6.6 -2.5 -0.7 Zone EMENA 21 128 6.0 1.2 7.2 -2.2 -0.6 4.5 Zone AOA 20 735 3.5 0.8 4.2 -3.9 -0.4 0.0 Nespresso 6 418 8.2 0.6 8.8 0.0 0.3 9
Slide 36: FY-2021 Products – topline summary
FY-2021 Products – topline summary FY-2021 sales Sales RIG Pricing OG (CHF m) % % % Powdered and liquid beverages 23 975 7.8 1.1 8.9 Water 4 040 3.0 3.7 6.8 Milk products and ice cream 10 700 3.0 2.9 5.9 Nutrition and Health Science 13 157 0.4 1.0 1.4 Prepared dishes and cooking aids 12 146 4.6 1.9
Slide 37: FY-2021 historical eight quarters
FY-2021 historical eight quarters Period RIG Pricing OG % % % Q1-2020 4.7 -0.4 4.3 Q2-2020 0.5 0.8 1.3 Q3-2020 4.8 0.1 4.9 Q4-2020 3.0 0.9 3.9 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 37 February 17, 2022 Nestlé full-year results 2021
Slide 38: FY-2021 Operating segments – revenue and results
FY-2021 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 AMS 33 779 7 012 6 601
Slide 39: FY-2021 Products – revenue and results
FY-2021 Products – revenue and results In CHF m Underlying Of which trading Trading Net other impairment of Of which operating operating trading income/ property, plant restructuring Sales profit profit (expense) and equipment costs Powdered and Liquid Beverages 23 975 5 631 5 406 (225) (46) (60) Wa
Slide 40: FY-2021 currency overview
FY-2021 currency overview Weighted average rate FY-2020 FY-2021 Variation in % US Dollar 1 USD 0.937 0.915 -2.4% Euro 1 EUR 1.070 1.081 1.0% Chinese Yuan Renminbi 100 CNY 13.596 14.179 4.3% UK Pound Sterling 1 GBP 1.202 1.257 4.6% Brazilian Real 100 BRL 18.175 16.988 -6.5% Philippine Peso 100 PHP 1.
Slide 41: FY-2021 underlying EPS reconciliation (1 of 2)
FY-2021 underlying EPS reconciliation (1 of 2) From net profit to underlying net profit In CHF m FY-2020 FY-2021 Net profit 12 232 16 905 Restructuring costs 220 311 Impairments of property, plant & equipment, goodwill and int. assets 711 2 614 Net result on disposal of businesses (1 678) (235) Othe
Slide 42: FY-2020 underlying EPS reconciliation (2 of 2)
FY-2020 underlying EPS reconciliation (2 of 2) From underlying trading operating profit to In CHF m underlying net profit FY-2020 FY-2021 Underlying trading operating profit 14 903 15 119 Net financial income / (expense) (874) (873) Adjusted taxes (2 965) (2 945) Adjusted income from associates and
Slide 43: Strong growth in retail sales
Strong growth in retail sales Organic sales growth % Retail Out-of-home* Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2021 Q2-2021 Q3-2021 Q4-2021 9.2% 84.1% 5.4% 5.8% 5.3% 25.7% 29.4% -11.6% * Includes Nestlé Professional, foodservice activities of Nespresso, Starbucks products and water, travel retail and B
Slide 44: Abbreviations
Abbreviations • OG Organic growth • RIG Real internal growth • AMS Zone Americas • EMENA Zone Europe, Middle East, and North Africa • AOA Zone Asia, Oceania, and sub-Saharan Africa • EPS Earnings per share • COGS Cost of goods sold • FCF Free cash flow • TOP Trading operating profit • UTOP Underlyin