Nestlé Global announces the financial results for Q1 2021 and reports an organic growth of 7.7%

Mihai Cristea 22/04/2021 | 16:09
  • Organic growth reached 7.7%, with real internal growth (RIG) of 6.4% and pricing of 1.2%. Growth was broad-based across most geographies, supported by early signs of recovery from out-of-home channels, improved pricing and market share gains.
  • Foreign exchange reduced sales by 5.3% due to the continued appreciation of the Swiss franc against most currencies. Net divestitures had a negative impact of 1.0%. As a result, total reported sales increased by 1.3% to CHF1 billion (3M-2020: CHF20.8 billion).
  • Portfolio management on track. The sale of Nestlé’s regional spring water brands, purified water business and beverage delivery service in the S.and Canada was completed on March 31, 2021. The acquisition of Essentia Water was completed on March 5, 2021.

 

Mark Schneider, Nestlé CEO, commented: “We are pleased with Nestlé’s strong organic sales growth in the first quarter, building on broad-based contributions from most geographies and product categories. Our growth was fueled by disciplined execution, enhanced digital capabilities and rapid innovation, resulting in further market share gains. Retail sales saw solid growth and out-of-home channels saw signs of improvement. We confirm our guidance for the year and our mid-term outlook for sustained mid single-digit organic growth. The development of COVID-19 vaccines has given the world hope and we are supporting the broad and equitable delivery of vaccines in the communities where we operate. Our partnership with the International Federation of the Red Cross and Red Crescent Societies is helping to get vaccines to those who need them most. In these challenging times, we can truly demonstrate how business can act as a force for good and help accelerate the recovery”.

 

Group Sales

Organic growth reached 7.7%, with RIG of 6.4%. Pricing increased to 1.2%, reflecting input cost inflation. Growth was broad-based across most geographies. Organic growth was 5.0% in developed markets, based mostly on RIG. Pricing was positive. Growth in emerging markets was 11.4%, with strong RIG and positive pricing.

 

Zone Europe, Middle-East and North Africa (EMENA)

  • 4% organic growth: 3.8% RIG; 0.6% pricing.
  • Western Europe saw low single-digit organic growth with solid RIG, partially offset by negative pricing.
  • Central and Eastern Europe reached high single-digit organic growth, with strong RIGand positive pricing.
  • Middle East and North Africa posted mid single-digit organic growth, based on positive RIGand pricing.

 

Organic growth reached 4.4%, with strong RIG of 3.8% supported by favorable mix. Pricing turned positive, contributing 0.6%. Net divestitures reduced sales by 3.7%, largely related to the divestment of the Herta charcuterie business. Foreign exchange negatively impacted sales by 2.8%. Reported sales in Zone EMENAdecreased by 2.1% to CHF 5.2 billion. Zone EMENA reported mid single-digit organic growth, with a high base of comparison in 2020. Each region posted positive growth, with strong momentum in Russia, Turkey, the United Kingdom and Italy. The Zone continued to see broad-based market share gains, including in pet food, coffee, plant-based food products and Infant Nutrition.

By product category, the key growth drivers were coffee and Purina PetCare, fueled by continued momentum in e-commerce and new product launches. Coffee saw double-digit growth, with strong demand for Nescafé and Starbucks products. Nescafé Farmers Origins, a new range of coffee capsules for Nespresso machines, was launched in Spain. Sales in Purina PetCare grew at a double-digit rate, driven by premium brands Purina Pro Plan, Purina ONE and Felix. Tails.com and Lily’s Kitchen also saw strong momentum, supported by continued distribution expansion. Culinary posted high single-digit growth, led by Maggi seasoning, Garden Gourmet and the recently acquired Mindful Chef business.

Confectionery reported low single-digit growth, with strong sales developments in France and Russia. Incoa, a premium chocolate made exclusively with cocoa fruit and no added sugar, was launched in France and the Netherlands with other European markets to follow. Infant Nutrition posted negative growth due to consumer stockpiling in March last year and lower birth rates in the context of the pandemic. Water and Nestlé Professional reported a sales decrease, with improvement towards the end of the quarter.

 

Business as a force for good: Supporting equitable COVID-19 vaccination

The development of effective vaccines against COVID-19 has given the world hope. Widespread vaccination is crucial to overcoming the pandemic, and Nestlé advocates for everyone getting vaccinated in line with public health priorities.

There is an urgent need to advance equitable access of vaccines, particularly in low-income countries. That is why Nestlé has entered into a new partnership with the International Federation of Red Cross and Red Crescent Societies (IFRC) and National Red Cross and Red Crescent Societies, to support the delivery of vaccines to underserved communities around the world.

The partnership includes action at the global level, as well as targeted support in vulnerable countries and regions. Much of the work will focus on the establishment of vaccination sites, the transport of vaccines, information campaigns and promotion of the vaccination of high-risk groups.

Together with other partnerships, Nestlé has committed CHF 10 million to equitable vaccination efforts to date. Nestlé recently announced a contribution to support COVAX to rapidly scale up the international delivery of vaccines to low-income countries. We are also working directly with government authorities in some countries to provide donations and support for local vaccination programs.

The support for equitable access to vaccines is just the latest phase in Nestlé’s response to the COVID-19 crisis. We will continue to engage in the fight against the pandemic and its consequences, protecting people, maintaining global food supply and giving a helping hand in our local communities.

For more details regarding the results reported by the Group, please click here.

 

* Current financial reporting is subject to international financial rules and standards, at group level.

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