Slide 1: Half-year results 2022
SNE Nestlé Good food, Good life Half-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: Half-year results 2022 – Mark Schneider, CEO
Half-year results 2022 Mark Schneider, CEO 3 July 28, 2022 Nestlé half-year results 2022
Slide 4: Key messages
Key messages • Strong organic sales growth of 8.1%, with increased pricing and resilient RIG • Underlying trading operating profit margin decreased by 50 bps to 16.9% • margin evolution impacted by time delays between cost inflation and responsible pricing • striking a balance between margin protect
Slide 5: Improving access to affordable nutrition
Improving access to affordable nutrition • Addressing health challenges through micronutrient-fortified products based on local needs • Increasing availability and accessibility of products • Working on value chain optimization to keep costs low and secure supply • Expanding nutrition education prog
Slide 6: 2022 guidance updated
2022 guidance updated • Organic sales growth between 7% and 8% • Underlying trading operating profit margin around 17.0% • Underlying earnings per share in constant currency and capital efficiency expected to increase 6 July 28, 2022 Nestlé half-year results 2022
Slide 7: Half-year results 2022 – François-Xavier Roger, CFO
Half-year results 2022 François-Xavier Roger, CFO
Slide 8: Half-year sales growth
Half-year sales growth OG +8.1% +1.0% +0.1% 45.6 +6.5% +1.7% 41.8 Reported sales growth +9.2% -30 HY-2021 sales RIG Pricing Net M&A Foreign HY-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 9: Strong growth across developed and emerging markets
Strong growth across developed and emerging markets Developed Emerging Sales (in CHF) 26.2 bn 19.4 bn % of Group sales 57% 43% RIG 0.5% 3.3% Pricing 6.3% 6.6% OG 6.9% 10.0% 9 July 28, 2022 Nestlé half-year results 2022
Slide 10: Sustained momentum in retail and out-of-home channels
Sustained momentum in retail and out-of-home channels Organic sales growth % Retail Out-of-home* H1-19 H1-20 H1-21 H1-22 H1-19 H1-20 H1-21 H1-22 7.3% 6.7% 6.3% 29.6% 3.6% 21.3% 4.3% -34.6% * Includes Nestlé Professional, foodservice activities of Nespresso, Starbucks products and water, travel retai
Slide 11: Using multiple levers to offset cost inflation
Using multiple levers to offset cost inflation Responsible Strategic revenue Efficiencies Product Portfolio pricing management & cost management mix management 7.7% 0.1% Q3-20 Q2-22 11 July 28, 2022 Nestlé half-year results 2022
Slide 12: Resilient RIG
Resilient RIG 2-year average adjusts for COVID-19-related volatility 4.6% 4.4% 4.1% 3.5% Q3-20/21 Q4-20/21 Q1-21/22 Q2-21/22 12 July 28, 2022 Nestlé half-year results 2022
Slide 13: Zone North America
Zone North America Sales CHF 12.1 bn Organic growth 9.6% Real internal growth -0.2% Underlying TOP margin 18.8% vs LY +30 bps • Strong organic growth, driven by pricing. RIG impacted by high base of comparison and supply chain constraints • Continued e-commerce momentum, recovery of out-of- home cha
Slide 14: Zone Europe
Zone Europe Sales CHF 9.3 bn Organic growth 7.1% Real internal growth 2.1% Underlying TOP margin 17.3% vs LY -140 bps • Strong organic growth, led by pricing. Solid RIG despite a high base of comparison and supply chain constraints • Further recovery of out-of-home channels, innovation and market sh
Slide 15: Zone Asia, Oceania and Africa
Zone Asia, Oceania and Africa Sales CHF 9.3 bn Organic growth 8.2% Real internal growth 2.1% Underlying TOP margin 23.5% vs LY -90 bps • Organic growth acceleration reflected increased pricing across all geographies and categories • Further recovery of out-of-home channels and strong execution in th
Slide 16: Zone Latin America
Zone Latin America Sales CHF 5.7 bn Organic growth 13.6% Real internal growth 4.2% Underlying TOP margin 21.1% vs LY +10 bps • Sustained double-digit organic growth, with increased pricing and strong RIG • Broad-based growth driven by recovery of out-of-home channels and sustained momentum for retai
Slide 17: Zone Greater China
Zone Greater China Sales CHF 2.7 bn Organic growth 2.3% Real internal growth 1.6% Underlying TOP margin 15.0% vs LY +100 bps • Low single-digit organic growth, with positive RIG and pricing, despite the impact of movement restrictions • Robust e-commerce demand, innovation and a return to positive g
Slide 18: Nespresso
Nespresso Sales CHF 3.2 bn Organic growth 2.6% Real internal growth -1.6% Underlying TOP margin 24.3% vs LY -170 bps • Low single-digit organic growth driven by pricing. RIG impacted by a high base of comparison • Further recovery of out-of-home channels and sustained momentum for Vertuo supported g
Slide 19: Nestlé Health Science
Nestlé Health Science Sales CHF 3.2 bn Organic growth 6.6% Real internal growth 4.4% Underlying TOP margin 13.7% vs LY +20 bps • Robust organic growth supported by innovation, geographic expansion and market share gains • Consumer care posted mid single-digit growth, with a strong contribution from
Slide 20: Broad-based growth across categories
Broad-based growth across categories Organic sales growth % 17.2% 13.9% 10.8% 8.1% 7.6% 7.8% 3.5% 2.9% Total Group Powdered and PetCare Nutrition and Prepared dishes Milk products Confectionery Water Liquid Beverages Health Science and cooking aids and Ice cream 20 July 28, 2022 Nestlé half-year res
Slide 21: Underlying trading operating profit margin by category
Underlying trading operating profit margin by category In % of sales 23.6% 21.9% 19.0% 19.5% 16.9% 15.9% 13.8% 9.7% Change in bps -50 -130 -220 +170 -40 +230 +80 -330 vs HY-2021 Total Group* Powdered and PetCare Nutrition and Prepared dishes Milk products Confectionery Water Liquid Beverages Health
Slide 22: Pricing, growth leverage and efficiencies mostly offset inflation
Pricing, growth leverage and efficiencies mostly offset inflation 17.X% 17.2% 17.4% 17.4% 17.1% 16.9% - 280 bps +220 bps +10 bps -30 Margin -50 bps in constant currency and reported basis Underlying TOP Gross Distribution Administration, Underlying TOP HY-2021 margin* marketing, HY-2022 R&D * Gross
Slide 23: Net profit
Net profit % of sales HY-22 vs HY-21 Underlying trading operating profit 16.9% -50 bps Restructuring -10 bps Impairment of assets -120 bps Onerous contracts, litigations and other operating income / expenses -20 bps Trading operating profit 14.7% -200 bps Gain / loss on disposals -60 bps Taxes -60 b
Slide 24: Underlying earnings per share
Underlying earnings per share -0.8% -0.6% 2.1% CHF 2.35 CHF 1.7% 2.33 4.9% CHF 2.17 Evolution in constant currency +8.1% Evolution on reported basis +7.3% UEPS Operating Share Net finance Others* UEPS FX UEPS HY-2021 performance buyback costs & tax HY-2022 impact HY-2022 in constant currency * Inclu
Slide 25: Free cash flow
Free cash flow In CHF billion 0.5 -0.9 2.8 -0.5 -0.4 Temporary increases in context of supply 1.5 constraints and strong volume demand Free cash flow Adjusted Working CAPEX and Others Free cash flow HY-2021 EBITDA capital expenditure on HY-2022 intangible assets 25 July 28, 2022 Nestlé half-year res
Slide 26: Free cash flow temporarily impacted (to be updated)
Free cash flow temporarily impacted by XXX In CHF billion X.X To be X.X updated 2.8 -X.X X.X X.X Half-year results 2022 Q&A Free cash flow Adjusted Working CAPEX and Others Free cash flow HY-2021 EBITDA capital expenditure on HY-2022 intangible assets 26 July 28, 2022 Nestlé half-year results 2022
Slide 27: Supporting slides
Supporting slides 27 July 28, 2022 Nestlé half-year results 2022
Slide 28: HY-2022 Operating segments – topline summary
HY-2022 Operating segments – topline summary HY-2022 sales Reported Sales RIG Pricing OG Net M&A F/X sales growth (CHF m) % % % % % % Zone North America 12 138 -0.2 9.8 9.6 -7.1 4.3 6.8 Zone Europe 9 283 2.1 4.9 7.1 1.6 -5.7 2.9 Zone AOA 9 335 2.1 6.1 8.2 -0.1 -3.0 5.2 Zone Latin America 5 659 4.2 9
Slide 29: HY-2022 Products – topline summary
HY-2022 Products – topline summary 6M-2022 sales Sales RIG Pricing OG (CHF m) % % % Powdered and liquid beverages 12 335 1.3 6.2 7.6 Water 1 792 8.8 8.4 17.2 Milk products and Ice cream 5 443 -3.3 6.8 3.5 Nutrition and Health Science 7 689 4.2 3.6 7.8 Prepared dishes and cooking aids 6 137 -5.0 7.9
Slide 30: HY-2022 historical eight quarters
HY-2022 historical eight quarters Period RIG Pricing OG % % % 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 Q1-2022 2.4 5.2 7.6 Q2-2022 0.9 7.7 8.7 30 July 28, 2022 Nestlé half-year results 2022
Slide 31: HY-2022 Operating segments – revenue and results
HY-2022 Operating segments – revenue and results In CHF m Of which Underlying Net other impairment of Trading Trading trading property, Of which Depreciation Operating Operating income/ plant and restructuring and Sales Profit Profit (expense) equipment costs amortization Zone North America 12 138 2
Slide 32: HY-2022 Products – revenue and results
HY-2022 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 12 335 2 915 2 873 (42) (14) (7) Wate
Slide 33: HY-2022 EPS reconciliation (1 of 2)
HY-2022 EPS reconciliation (1 of 2) From net profit to underlying net profit In CHF m HY-2021 HY-2022 Net Profit 5 945 5 247 Restructuring costs 62 87 Impairments of property, plant & equipment, goodwill and int. assets 177 741 Net result on disposal of businesses (212) 52 Other adjustment in Net ot
Slide 34: HY-2022 EPS reconciliation (2 of 2)
HY-2022 EPS reconciliation (2 of 2) From underlying trading operating profit to In CHF m underlying net profit HY-2021 HY-2022 Underlying trading operating profit 7 251 7 683 Net financial income / (expense) (416) (434) Adjusted taxes (1 380) (1 515) Adjusted income from associates and joint venture
Slide 35: HY-2022 Currency overview
HY-2022 Currency overview Weighted average rate HY-2021 HY-2022 Variation in % US Dollar 1 USD 0.908 0.945 +4.1% Euro 1 EUR 1.094 1.032 -5.7% Chinese Yuan Renminbi 100 CNY 14.011 14.568 +4.0% Brazilian Real 100 BRL 16.914 18.723 +10.7% Philippine Peso 100 PHP 1.882 1.813 -3.7% UK Pound Sterling 1 GB
Slide 36: Abbreviations
Abbreviations • OG Organic growth • RIG Real internal growth • AOA Asia, Oceania, and Africa • LATAM Latin America • GCR Greater China region 36 July 28, 2022 Nestlé half-year results 2022