Slide 1: Half-year results 2024
Half-year results 2024 .
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: Half-year results 2024 - Mark Schneider, CEO
Half-year results 2024 Mark Schneider, CEO
Slide 4: Key messages
Key messages First half 2024 • Delivered convincing RIG turnaround across the Group in the second quarter • Nestlé Health Science recovery on plan • Gross margin improvement generating resources to invest in volume/mix-led growth • Improved market share, particularly for billionaire brands 2024 outl
Slide 5: RIG momentum re-ignited across the Group in the second quarter
RIG momentum re-ignited across the Group in the second quarter Zones & Globally Managed Businesses Category view Powdered & North America Liquid Beverages Europe Water Asia, Oceania, Milk Products & Australia Ice Cream Latin America Prepared dishes and cooking aids Greater China Confectionery Nestlé
Slide 6: Driving growth through billionaire brands
Driving growth through billionaire brands <<<<<<<<<<<<<<<<<<<<<<<<<<<< <<<<<<<<<<<<<<<<<<<<<<<<<<<< <<<<<<<<<<<<<<<<<<<<<<<<<<<< Marketing investment Organic Growth of 3.2% Business cells gaining or Improving trend holding market share Increasing share of total Double-digit +110 bps + 400 bps % grow
Slide 7: Stepping up new product launch intensity
Stepping up new product launch intensity Number of product launches +20% Expected FY-24 vs. FY-23 +15% +15% H1-24 vs. H1-23 Key product launches 7 July 25, 2024 Nestlé half-year results 2024
Slide 8: Nestlé Health Science: VMS recovery
Nestlé Health Science: VMS recovery Nestlé Health Science VMS sales <<<<<<<<<<<<<<<<<<<<<<<<<<<< CHF 0.7 bn • Sales almost back to pre-supply constraint levels 0.6 • VMS category growing at high single-digit rate • Nestlé Health Science set to be a core growth platform 0.5 0.4 Q2-23 Q3-23 Q4-23 Q1-2
Slide 9: Half-year results 2024 - Anna Manz, CFO
Half-year results 2024 Anna Manz, CFO
Slide 10: Half-year sales growth
Half-year sales growth OG +2.1% -0.4% +2.0% 0.1% -4.4% 46.3 45.0 Reported sales growth -2.7% -30 HY-2023 sales RIG Pricing Net M&A Foreign HY-2024 sales CHF bn exchange CHF bn 10 July 25, 2024 Nestlé half-year results 2024
Slide 11: RIG accelerating, price decelerating
RIG accelerating, price decelerating RIG RIG adjusted for the number of trading days Price 9.8% 9.1% 6.3% 5.2% 3.4% 2.2% 0.4% -0.5% -0.3% 0.6% -1.1% -2.0% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 11 July 25, 2024 Nestlé half-year results 2024
Slide 12: Zone North America
Zone North America Sales CHF 12.2 bn Organic growth -0.1% Real internal growth -1.5% Underlying TOP margin 21.8% vs LY +20 bps • Close to flat growth reflects strong RIG rebound in the second quarter driven by growth investments • PetCare, water and coffee led growth • 80% of second quarter growth t
Slide 13: Zone Europe
Zone Europe Sales CHF 9.3 bn Organic growth 4.5% Real internal growth 1.3% Underlying TOP margin 17.7% vs LY +110 bps • Broad-based growth across geographies and almost all categories • Growth led by PetCare, confectionery and coffee • Higher margin due to gross margin improvement and portfolio opti
Slide 14: Zone Asia, Oceania and Africa
Zone Asia, Oceania and Africa Sales CHF 8.4 bn Organic growth 3.5% Real internal growth Flat Underlying TOP margin 23.8% vs LY +100 bps • Central and West Africa, South Asia and Thailand were the primary geographic growth drivers • Culinary, infant nutrition and coffee delivered strongest growth, pa
Slide 15: Zone Latin America
Zone Latin America Sales CHF 6.2 bn Organic growth 2.7% Real internal growth 0.1% Underlying TOP margin 19.8% vs LY Flat • Brazil and Mexico driving growth with some markets impacted by challenging macro-environment • Confectionery, Nestlé Professional and coffee were the key contributors to growth
Slide 16: Zone Greater China
Zone Greater China Sales CHF 2.4 bn Organic growth 1.6% Real internal growth 2.9% Underlying TOP margin 15.8% vs LY -80 bps • Growth driven by continued momentum of out-of- home and e-commerce channels • Coffee, Nestlé Professional and confectionery were the key growth contributors • Lower margin re
Slide 17: Nestlé Health Science
Nestlé Health Science Sales CHF 3.2 bn Organic growth 0.1% Real internal growth -0.2% Underlying TOP margin 13.4% vs LY +40 bps • Vitamins, minerals and supplements posted negative growth. Recovery plan on track • Active and medical nutrition delivered robust growth across most segments • Margin imp
Slide 18: Nespresso
Nespresso Sales CHF 3.1 bn Organic growth 1.8% Real internal growth 1.1% Underlying TOP margin 21.5% vs LY -20 bps • Mid-single digit growth in North America the key geographic growth driver • Vertuo and out-of-home generating broad-based growth momentum • Margin decrease reflects increased growth i
Slide 19: Category growth
Category growth Organic sales growth % 7.0% 3.8% 4.0% 2.8% 2.1% 0.8% -0.1% -2.0% Total Group Powdered and PetCare Nutrition and Prepared dishes Milk products Confectionery Water Liquid Beverages Health Science and cooking aids and Ice cream 19 July 25, 2024 Nestlé half-year results 2024
Slide 20: Underlying trading operating profit margin by category
Underlying trading operating profit margin by category In % of sales 23.2% 22.1% 21.0% 19.5% 19.1% 17.4% 14.3% 9.4% Change in bps +30 -10 +120 Flat -10 +240 -20 -160 vs. HY-2023 Total Group* Powdered and PetCare Nutrition and Milk products Prepared dishes Confectionery Water Liquid Beverages Health
Slide 21: Gross profit margin improvement supporting marketing investments and higher UTOP margin
Gross profit margin improvement supporting both increased marketing investments and higher underlying TOP margin +10 bps -100 bps +160 bps -40 bps 17.4% 17.1% Margin +30 bps on a reported basis Margin +40 bps in constant currency June YTD 2023 Gross Profit Margin Distribution Advertising and Marketi
Slide 22: Continued progress on gross profit margin restoration
Continued progress on gross profit margin restoration Gross profit margin as a % of sales 47.2% 46.1% 46.0% 45.6% 44.5% H1-2022 H2-2022 H1-2023 H2-2023 H1-2024 22 July 25, 2024 Nestlé half-year results 2024
Slide 23: Stepping up investments in advertising and marketing
Stepping up investments in advertising and marketing Advertising and marketing expenses as a % of sales 8.2% 8.1% 7.1% 7.1% 6.6% H1-2022 H2-2022 H1-2023 H2-2023 H1-2024 23 July 25, 2024 Nestlé half-year results 2024
Slide 24: Net profit
Net profit % of sales H1-24 vs H1-23 Underlying trading operating profit 17.4% +30 bps Restructuring +20 bps Impairment of assets flat Onerous contracts, litigations and other trading income / expenses flat Trading operating profit 16.4% +50 bps Gain / loss on disposals -10 bps Net financing costs -
Slide 25: Increasing free cash flow generation
Increasing free cash flow generation Free cash flow as a % of sales 8.8% 7.4% 3.2% H1-2022 H1-2023 H1-2024 25 July 25, 2024 Nestlé half-year results 2024
Slide 26: Underlying earnings per share
Underlying earnings per share 1.0% -1.3% -0.2% CHF 3.8% 2.51 -4.3% CHF 2.43 CHF 2.40 Evolution in constant currency +3.3% Evolution on reported basis -1.0% UEPS Operating Share Net finance costs Others* UEPS FX UEPS HY-2023 performance Buyback & tax HY-2024 impact HY-2024 in constant currency * Incl
Slide 27: Key financial takeaways
Key financial takeaways • Organic sales growth of 2.1% – RIG of 0.1%, with second quarter turning positive at 2.2% marking the pivot back to volume/mix-led growth – Pricing of 2.0%, reflecting high base of comparison in the prior year and increased growth investments • Generated resources to fuel vo
Slide 28: Half-year results 2024 - Mark Schneider, CEO
Half-year results 2024 Mark Schneider, CEO
Slide 29: Evolving growth dynamics across the food & beverage industry
Evolving growth dynamics across the food & beverage industry • Weak consumer sentiment, leading to value-seeking behavior • Continuing transition from price to RIG-led growth • Increasing promotional intensity • Ongoing geopolitical tensions impacting growth in several regions 29 July 25, 2024 Nestl
Slide 30: 2024 guidance updated
2024 guidance updated • We expect organic sales growth of at least 3% • Underlying earnings per share in constant currency to increase at a mid single-digit rate, in line with consensus • Underlying trading operating profit margin guidance unchanged with a moderate increase expected 30 July 25, 2024
Slide 31: Managing the short-term, building for the long-term
Managing the short-term, building for the long-term • Delivering through execution excellence • Stepping up growth investments, particularly for billionaire brands • Rolling out strong innovation pipeline • Creating new growth platforms 31 July 25, 2024 Nestlé half-year results 2024
Slide 32: Thank you
Thank you 32 July 25, 2024 Nestlé half-year results 2024
Slide 33: Q2-2024 Operating segments – topline summary
Q2-2024 Operating segments – topline summary Q2-2024 sales Sales RIG Pricing OG (CHF m) % % % Zone North America 6 411 2.8 -0.5 2.3 Zone Europe 4 641 2.9 1.6 4.5 Zone AOA 4 201 0.4 3.0 3.4 Zone Latin America 3 094 1.1 1.2 2.3 Zone Greater China 1 207 3.8 -4.3 -0.5 Nestlé Health Science 1 728 3.0 -1.
Slide 34: Q2-2024 Products – topline summary
Q2-2024 Products – topline summary Q2-2024 sales Sales RIG Pricing OG (CHF m) % % % Powdered and liquid beverages 6 194 3.3 0.8 4.1 Water 920 -0.1 3.9 3.7 Milk products and Ice cream 2 584 0.8 -0.3 0.5 Nutrition and Health Science 3 957 1.3 -0.3 0.9 Prepared dishes and cooking aids 2 634 0.9 -0.5 0.
Slide 35: HY-2024 Operating segments – topline summary
HY-2024 Operating segments – topline summary HY-2024 sales Reported Sales RIG Pricing OG Net M&A F/X sales growth (CHF m) % % % % % % Zone North America 12 234 -1.5 1.4 -0.1 0.0 -2.5 -2.5 Zone Europe 9 283 1.3 3.1 4.5 -2.7 -3.7 -1.9 Zone AOA 8 441 0.0 3.5 3.5 0.0 -10.3 -6.8 Zone Latin America 6 166
Slide 36: HY-2024 Products – topline summary
HY-2024 Products – topline summary HY-2024 sales Sales RIG Pricing OG (CHF m) % % % Powdered and liquid beverages 12 041 0.9 1.9 2.8 Water 1 621 -0.8 4.8 4.0 Milk products and Ice cream 5 189 -0.8 0.7 -0.1 Nutrition and Health Science 7 637 -0.6 1.4 0.8 Prepared dishes and cooking aids 5 260 -3.0 1.
Slide 37: HY-2024 historical eight quarters
HY-2024 historical eight quarters Period RIG% Pricing % OG % 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 Q4-2023 0.4 5.2 5.7 Q1-2024 -2.0 3.4 1.4 Q2-2024 2.2 0.6 2.8 37 July 25, 2024 Nestlé half-year results 2024
Slide 38: HY-2024 Operating segments – revenue and results
HY-2024 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 12 234 2
Slide 39: HY-2024 Products – revenue and results
HY-2024 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 12 041 2 529 2 433 (96) (34) (39) Wat
Slide 40: HY-2024 EPS reconciliation (1 of 2)
HY-2024 EPS reconciliation (1 of 2) From net profit to underlying net profit In CHF m H1-2023 H1-2024 Net Profit 5 649 5 644 Restructuring costs 262 158 Impairments of property, plant & equipment, goodwill and int. assets 181 189 Net result on disposal of businesses 8 43 Other adjustment in Net othe
Slide 41: HY-2024 EPS reconciliation (2 of 2)
HY-2024 EPS reconciliation (2 of 2) From underlying trading operating profit In CHF m to underlying net profit H1-2023 H1-2024 Underlying trading operating profit 7 904 7 841 Net financial income / (expense) (697) (744) Adjusted taxes (1 486) (1 566) Adjusted income from associates and joint venture
Slide 42: Strong growth across developed and emerging markets
Strong growth across developed and emerging markets Developed Emerging Sales (in CHF) 26.2 bn 18.8 bn % of Group sales 58% 42% RIG -0.3% 0.5% Pricing 1.3% 3.1% OG 1.0% 3.7% 42 July 25, 2024 Nestlé half-year results 2024
Slide 43: HY-2024 Currency overview
HY-2024 Currency overview Average rate HY-2023 HY-2024 Variation in % US Dollar 1 USD 0.911 0.889 -2.4 Euro 1 EUR 0.986 0.961 -2.5 Chinese Yuan Renminbi 100 CNY 13.164 12.324 -6.4 Brazilian Real 100 BRL 17.974 17.500 -2.6 Philippine Peso 100 PHP 1.649 1.563 -5.3 UK Pound Sterling 1 GBP 1.124 1.125 0
Slide 44: 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