Press Release: Nestle: Nestlé reports full-year -3-

Zone Europe

-- 7.2% organic growth: 0.9% RIG; 6.4% pricing.

-- The Zone's underlying trading operating profit margin decreased by 190

basis points to 16.4%.

Sales Sales Organic UTOP UTOP Margin Margin

2022 2021 RIG Pricing growth 2022 2021 2022 2021

CHF CHF CHF CHF

Zone 19.1 18.8 3.1 3.4

Europe* bn bn 0.9% 6.4% 7.2% bn bn 16.4% 18.3%

(*) RIG, pricing and organic growth figures exclude the Russia region, with a corresponding impact on the M&A and foreign exchange lines

Organic growth was 7.2%, with pricing of 6.4%. RIG was resilient at 0.9%, following a high base of comparison in 2021 as well as supply constraints. Foreign exchange negatively impacted sales by 7.6%, reflecting the appreciation of the Swiss franc against the Euro. Reported sales in Zone Europe increased by 1.8% to CHF 19.1 billion.

In a challenging environment, Zone Europe demonstrated resilience and a commitment to invest for the long-term. In Ukraine, Nestlé announced a CHF 40 million investment for a new production facility in the Volyn region.

The Zone saw market share gains in confectionery, pet food and Infant Nutrition. By product category, the key growth driver was Purina PetCare, fueled by premium brands Gourmet, Felix and Purina Pro Plan. Growth was strong across all channels, particularly in e-commerce and pet specialty stores. Sales in Nestlé Professional grew at a strong double-digit rate, helped by new growth platforms and increased distribution, particularly for beverages. Water saw double-digit growth, with a sales decrease in the fourth quarter mainly due to temporary capacity constraints. Coffee posted mid single-digit growth, led by Nescafé soluble coffee and continued strong sales developments for Starbucks by Nespresso. Confectionery reported mid single-digit growth, with strong demand for KitKat and seasonal offerings. Sales in Infant Nutrition grew at a double-digit rate, based on strong momentum for premium infant formula, including human milk oligosaccharides (HMOs) products. Culinary recorded a sales decrease, impacted by negative growth in pizza and noodles. Garden Gourmet plant-based products continued to see double-digit growth, reflecting new product launches.

The Zone's underlying trading operating profit margin decreased by 190 basis points. Significant cost inflation and the impact of war-induced supply chain constraints outweighed pricing, growth leverage and cost efficiencies.

Zone Asia, Oceania and Africa (AOA)

-- 8.2% organic growth: 0.1% RIG; 8.1% pricing.

-- The Zone's underlying trading operating profit margin decreased by 110

basis points to 22.9%.

Sales Sales Organic UTOP UTOP Margin Margin

2022 2021 RIG Pricing growth 2022 2021 2022 2021

CHF CHF CHF CHF

Zone 18.5 17.9 4.2 4.3

AOA bn bn 0.1% 8.1% 8.2% bn bn 22.9% 24.0%

Organic growth reached 8.2%, with pricing of 8.1%. RIG was 0.1%, impacted by a high base of comparison in 2021 and portfolio optimization actions. Foreign exchange reduced sales by 4.9%. Reported sales in Zone AOA increased by 3.3% to CHF 18.5 billion.

Growth in Zone AOA was driven by pricing, continued recovery of out-of-home channels and innovation. The Zone saw market share gains in coffee, culinary and Infant Nutrition.

South-East Asia saw mid single-digit growth, led by Nescafé, Maggi and Milo. South Asia posted double-digit growth, with market share gains and continued momentum for Maggi, KitKat and Nescafé. Sales in the Middle East and Africa grew at a double-digit rate, based on strong momentum for affordable offerings across Maggi and Milo as well as broad-based demand for Infant Nutrition products. Despite portfolio optimization, Japan reported low single-digit growth, supported by Nescafé, Starbucks and Purina PetCare. Sales in South Korea grew at a double-digit rate, driven by Starbucks products and increased demand for KitKat. Oceania recorded high single-digit growth, with particular strength for Nescafé, Maggi and KitKat.

By product category, culinary was the largest growth contributor, led by Maggi cooking aids and noodles. Sales in Nestlé Professional grew at a strong double-digit rate across geographies and categories, fueled by increased distribution. Coffee saw high single-digit growth, with continued strong demand for Nescafé and Starbucks products. The Zone launched Starbucks ready-to-drink products in seven markets. Infant Nutrition reached high single-digit growth, based on innovation and increased distribution. Cocoa and malt beverages posted high single-digit growth, driven by Milo. Sales in confectionery grew at a double-digit rate, led by KitKat. Purina PetCare reported high single-digit growth, with continued momentum for Purina ONE, Felix and Purina Pro Plan. Ambient dairy saw a slight sales decrease, largely due to portfolio optimization actions.

The Zone's underlying trading operating profit margin decreased by 110 basis points. Significant cost inflation more than offset pricing, growth leverage and disciplined cost control.

Zone Latin America

-- 13.1% organic growth: 1.5% RIG; 11.6% pricing.

-- The Zone's underlying trading operating profit margin decreased by 70

basis points to 21.2%.

Sales Sales Organic UTOP UTOP Margin Margin

2022 2021 RIG Pricing growth 2022 2021 2022 2021

Zone CHF CHF CHF CHF

Latin 11.8 10.1 2.5 2.2

America bn bn 1.5% 11.6% 13.1% bn bn 21.2% 21.9%

Organic growth was 13.1%, with pricing of 11.6%. RIG was 1.5%, following a high base of comparison in 2021. Foreign exchange had a positive impact of 4.0%. Reported sales in Zone Latin America increased by 17.2% to CHF 11.8 billion.

Zone Latin America saw sustained broad-based growth, supported by pricing, strong operational execution and continued momentum of out-of-home channels. The Zone saw market share gains in Infant Nutrition, pet food and culinary.

Sales in Brazil grew at a strong double-digit rate, reflecting high demand for confectionery and Infant Nutrition as well as cocoa and malt beverages. Mexico saw double-digit growth, with strong sales developments for Purina PetCare, Nescafé and Carnation. Sales in Chile grew at a double-digit rate, led by confectionery, coffee and Purina PetCare. Colombia and the Plata Region continued to see strong double-digit growth.

By product category, confectionery was the largest growth contributor, based on strong demand for key local brands and KitKat. Sales in Purina PetCare grew at a double-digit rate, led by Dog Chow, Cat Chow and Purina Pro Plan, as well as the continued expansion of Purina ONE across the Zone. Coffee posted broad-based double-digit growth, supported by Nescafé soluble coffee, Nescafé Dolce Gusto and Starbucks products. Dairy reported high single-digit growth, based on strong sales developments for fortified milks and home-baking products. Infant Nutrition recorded high single-digit growth, based on continued momentum for Nido and NAN. Sales in Nestlé Professional grew at a strong double-digit rate, significantly exceeding 2019 levels, with growth fueled by new digital platforms. Water also posted strong double-digit growth. Plant-based products saw strong growth, helped by the expansion of dairy alternatives for La Lechera and by Nature's Heart.

The Zone's underlying trading operating profit margin decreased by 70 basis points, as one-off items and cost inflation more than offset pricing, growth leverage and disciplined cost control.

Zone Greater China

-- 3.5% organic growth: 1.0% RIG; 2.5% pricing.

-- The Zone's underlying trading operating profit margin increased by 260

basis points to 16.1%.

Sales Sales Organic UTOP UTOP Margin Margin

2022 2021 RIG Pricing growth 2022 2021 2022 2021

Zone CHF CHF CHF CHF

Greater 5.4 5.2 0.9 0.7

China bn bn 1.0% 2.5% 3.5% bn bn 16.1% 13.5%

Organic growth was 3.5%, with pricing of 2.5%. RIG was 1.0%, impacted by COVID-19-related movement restrictions. Foreign exchange had a negative impact of 0.1%. Reported sales in Zone Greater China increased by 3.4% to CHF 5.4 billion.

Growth in Zone Greater China was supported by strong operational execution, e-commerce momentum and continued innovation.

By product category, Infant Nutrition saw high single-digit growth, with improved market share trends for NAN and illuma. Coffee posted high single-digit growth, led by Nescafé soluble and ready-to-drink coffee as well as Starbucks products. In confectionery, Hsu Fu Chi reported high single-digit growth, helped by innovation including the launch of savory snacks. Culinary recorded mid single-digit growth, helped by increased distribution and innovation. Sales in Purina PetCare grew at a double-digit rate, with strong growth in specialty channels and e-commerce. As a result of movement restrictions, Nestlé Professional saw a mid single-digit sales decrease, with market share gains supported by new customers and product launches.

The Zone's underlying trading operating profit margin increased by 260 basis points. Favorable mix and disciplined cost control more than offset cost inflation.

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February 16, 2023 01:15 ET (06:15 GMT)