Nestlé, the largest food and beverage company in the world, announces financial results at group level for the first half of 2022. The organic growth reached 8.1%, with real internal growth (RIG) of 1.7% and pricing of 6.5%. Growth was broad-based across most geographies and categories.
Mark Schneider, Nestlé CEO, commented:
”In the first half of the year, we delivered strong organic growth and a significant increase in underlying earnings per share. Our local teams implemented price increases in a responsible manner. Volume and product mix were resilient, based on our strong brands, differentiated offerings and leading market positions. We limited the impact of unprecedented inflationary pressures and supply chain constraints on our margin development through disciplined cost control and operational efficiencies. At the same time, investments behind capital expenditure, digitalization and sustainability increased significantly. We are focused on creating shared value over both the short and long term. Growing food insecurity around the world and heightened climate concerns, following an increase in unusual weather patterns, underlines the importance of this strategic direction. Good for you and good for the planet are the two key strategic pillars that our company pursues in an unwavering manner, even in the face of significant short-term challenges.”
Zone Europe financial results
- 1% organic growth: 2.1% RIG; 4.9% pricing
Organic growth was 7.1%. Pricing reached 4.9%. RIG remained solid at 2.1%, despite a high base of comparison in 2021 and supply chain constraints. Foreign exchange negatively impacted sales by 5.7%. Reported sales in Zone Europe increased by 2.9% to CHF 9.3 billion.
Zone Europe reported high single-digit organic growth, reflecting increased pricing, a further recovery of out-of-home channels and innovation. The Zone continued to see market share gains, particularly in pet food, coffee and Infant Nutrition.
By product category, the key growth driver was Purina PetCare, fueled by premium brands Gourmet, Purina ONE and Purina Pro Plan, including veterinary products. Growth was broad-based across channels, particularly in e-commerce and pet specialty stores. Gourmet Revelations, the recently launched super-premium cat food, saw strong demand. Sales in Nestlé Professional grew at a double-digit rate, led by beverages. Water posted double-digit growth, driven by S.Pellegrino, Perrier and Acqua Panna. Sales in Infant Nutrition grew at a double-digit rate, based on strong momentum for human milk oligosaccharides (HMOs) products. Confectionery reported mid single-digit growth, with strong demand for KITKAT across most geographies and Baci in Italy. Coffee posted low single-digit growth, led by NESCAFÉ soluble coffee. Starbucks by Nespresso and other Nespresso-compatible capsules saw further market share gains in the retail segment. Culinary reported a sales decrease, impacted by negative growth in pizza and noodles. GARDEN GOURMET plant-based products continued to see strong momentum, reflecting new product launches.
The Zone’s underlying trading operating profit margin decreased by 140 basis points. Significant cost inflation more than offset pricing, growth leverage and disciplined cost control.
Nestlé in Romania
“Nestlé Romania finished the first half of the year with 12.6% growth, an increase supported by a double digit evolution in 7 out of 10 categories. We want 2022 to be the ninth consecutive year of healthy growth of Nestlé’s business in Romania and to strengthen Nestlé’s reputation as an important company for Romania’s economic and social development through NHW initiatives, sustainability and community support“, stated Silvia Sticlea, Country Manager Nestlé România.
Thus, Nestle’s portfolio has grown this period with 30 new products suitable for all ages and tastes, from culinary products to Gerber Organic Baby baby food, as well as dietary supplements from the NANCARE® range.
Full-year 2022 outlook updated
We expect organic sales growth between 7% and 8%. The underlying trading operating profit margin is now expected around 17.0%. Underlying earnings per share in constant currency and capital efficiency are expected to increase.