Press Release: Nestle: Nestlé reports nine-month -2-

culinary and coffee. Growth in confectionery turned positive, with

strong sales development in Brazil and Chile in the third quarter.

Nestlé Professional saw negative growth. The decline in sales was

more limited in the third quarter, particularly for food products.

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

-- 2.9% organic growth: 3.3% RIG; -0.4% pricing.

-- Western Europe saw low single-digit organic growth with solid RIG,

partially offset by negative pricing.

-- Central and Eastern Europe had mid single-digit organic growth, with

strong RIG and negative pricing.

-- Middle East and North Africa posted low single-digit organic growth,

entirely driven by pricing.

Sales Sales Organic Net Foreign Reported

9M-2020 9M-2019 RIG Pricing growth M&A exchange growth

Zone CHF 15.0 CHF 15.7

EMENA bn bn 3.3% - 0.4% 2.9% - 1.7% - 6.2% - 5.0%

Organic growth reached 2.9%, with robust RIG of 3.3%, supported by

favorable mix. Pricing decreased by 0.4%. Divestitures reduced sales by

1.7%, largely related to the divestiture of the Herta charcuterie

business. Foreign exchange negatively impacted sales by 6.2%. Reported

sales in Zone EMENA decreased by 5.0% to CHF 15.0 billion.

Zone EMENA reported mid single-digit growth in the third quarter. Each

region posted positive growth, with strong momentum in Russia, the

United Kingdom and France. The Zone saw continued broad-based market

share gains, particularly in coffee and Purina PetCare, as well as

vegetarian and plant-based food products.

By product category, coffee, Purina PetCare and culinary products grew

at a double-digit rate. Coffee was supported by strong momentum for

Nescafé and Starbucks products. In PetCare, Felix, Purina Pro Plan

and Tails.com were the key growth drivers, with strong demand in

e-commerce and specialist channels. Culinary saw elevated demand,

particularly for Maggi and plant-based products. Garden Gourmet

continued to expand its offering, including further upgrades to the

Sensational Burger and the introduction of Sensational Vuna, a

plant-based alternative to tuna. Infant nutrition posted positive

growth. Russia saw increased sales momentum, with NAN gaining market

leadership. Growth in confectionery was almost flat, turning positive in

the third quarter based on strong sales development in France and the

United Kingdom. Water and Nestlé Professional reported negative

growth, with declines moderating in the third quarter.

Zone Asia, Oceania and sub-Saharan Africa (AOA)

-- Flat organic growth: -0.2% RIG; 0.2% pricing.

-- China posted a decline in organic growth, with negative RIG and pricing.

-- South-East Asia saw mid single-digit organic growth, with positive RIG

and pricing.

-- South Asia reported mid single-digit organic growth, with positive RIG

and pricing.

-- Sub-Saharan Africa recorded double-digit organic growth, led by strong

RIG and positive pricing.

-- Japan, South Korea and Oceania saw slightly positive organic growth.

Positive RIG was partially offset by negative pricing.

Sales Sales Organic Net Foreign Reported

9M-2020 9M-2019 RIG Pricing growth M&A exchange growth

Zone CHF 15.3 CHF 16.3

AOA bn bn - 0.2% 0.2% 0.0% 0.0% - 6.7% - 6.7%

Organic growth was flat, with RIG of -0.2% and pricing of 0.2%. Foreign

exchange reduced sales by 6.7%. Reported sales in Zone AOA decreased by

6.7% to CHF 15.3 billion. Organic growth in the Zone reached 4.5% in the

third quarter.

China saw negative growth, turning positive in the third quarter. Coffee,

culinary and ice cream all delivered positive growth, with sequential

quarterly improvements. The contraction in Wyeth infant formula sales

continued to moderate. The roll-out of the locally produced Belsol brand

is on track. Infant cereals and Purina PetCare both grew at a

double-digit rate. Nestlé Professional reported a sales decrease,

with growth recovering to almost flat in the third quarter. Strong

momentum in e-commerce continued, driven by Nescafé, Starbucks

products and dairy.

South-East Asia maintained mid single-digit growth. Sales in the

Philippines grew at a double-digit rate, with elevated consumer demand

for Bear Brand, Milo and Maggi. Indonesia delivered high single-digit

growth, led by Bear Brand, Dancow and Milo. South Asia continued to

perform well. India posted strong mid single-digit growth, with good

momentum in Maggi, Nescafé and KitKat. Sub-Saharan Africa grew at a

double-digit rate, with strong growth across most markets. Growth in

Japan, South Korea and Oceania was slightly positive. Oceania reported

strong growth across most product categories, particularly in coffee and

confectionery. Japan saw a decline in sales, with some improvement in

the third quarter. KitKat sales declined in Japan, impacted by a

reduction of inbound tourists.

By product category, the largest contributions to growth came from dairy,

culinary, coffee and Purina PetCare. In coffee, consumer demand for

Starbucks products remained strong. Infant nutrition continued to

perform well outside of China. Nestlé Professional and

confectionery posted negative growth, with improved sales development in

the third quarter.

Other Businesses

-- 7.4% organic growth: 6.8% RIG; 0.6% pricing.

-- Nespresso reported mid single-digit organic growth, with positive RIG and

pricing.

-- Nestlé Health Science saw double-digit organic growth, entirely

driven by RIG.

Sales Sales Organic Foreign Reported

9M-2020 9M-2019 RIG Pricing growth Net M&A exchange growth

Other CHF 6.7 CHF 8.7

Businesses bn bn 6.8% 0.6% 7.4% - 24.0% - 6.1% - 22.7%

Organic growth of 7.4% was based on strong RIG of 6.8% and pricing of

0.6%. Divestitures reduced sales by 24.0%, largely related to the

divestment of Nestlé Skin Health. Foreign exchange negatively

impacted sales by 6.1%. Reported sales in Other Businesses decreased by

22.7% to CHF 6.7 billion.

Nespresso grew at a mid single-digit rate, with broad-based sales

improvement in the third quarter. E-commerce and the Vertuo system were

the largest contributors to growth. The Americas and AOA saw

double-digit growth, with continued market share gains in North America.

Growth in Europe turned positive in the third quarter, with the

reopening of boutiques and strong momentum in e-commerce. In September,

Nespresso committed to achieving carbon neutrality across its supply

chain and product lifecycle by 2022. This ambition builds on more than a

decade of work to reduce emissions and will make every cup of Nespresso

carbon neutral by 2022.

Nestlé Health Science posted double-digit growth, supported by

strong momentum for consumer and medical nutrition products. Demand for

vitamins, minerals and supplements that support health and the immune

system remained high. Garden of Life and Pure Encapsulations saw strong

growth, particularly in e-commerce. Healthy-aging products grew at a

double-digit rate, supported by Boost in North America and Nutren in

Brazil. Medical nutrition grew at a high single-digit rate, led by food

allergy and adult medical care products.

Business as a force for good: Driving systemic change to solve the

problem of packaging waste

Nestlé is taking a leadership role in making packaging sustainable

while maintaining food safety and quality. We committed to making 100%

of our packaging recyclable or reusable by 2025 and to reducing our use

of virgin plastics by one-third in the same period. So far, 87% of our

total packaging and 66% of our plastic packaging is recyclable or

reusable.

Our work now focuses on five pillars:

-- Reducing our use of packaging material in general, and virgin plastics in

particular.

-- Scaling reusable and refillable systems to eliminate the need for

disposable packaging.

-- Pioneering alternative packaging materials, in particular to facilitate

recycling.

-- Supporting infrastructure that helps to shape a waste-free future.

-- Driving new behavior in our own operations as well as with consumers,

retail partners and suppliers.

Recent progress includes the following examples:

-- Nestlé achieved plastic neutrality in the Philippines in August.

That means we collected and co-processed as much plastic as we sold. We

aim to achieve the same in another 11 countries, which, together with the

Philippines, account for over 10% of Nestlé's plastic usage and

often lack formal waste management systems.

-- Purina PetCare recently launched recyclable flexible plastic packaging

for wet pet food, the first of its kind in the pet food industry. It

addresses the key challenge of simplifying plastic structures to make

them recyclable, without compromising on the functionalities and safety

of food-grade packaging.

-- To support the shift from virgin plastics to food-grade recycled plastics

in the United States, we made an investment of USD 30 million in the

Closed Loop Leadership Fund. This is part of our CHF 2 billion commitment

to boost the market for food-grade recycled plastics.

While we are making meaningful progress in sustainable packaging, we

know that more needs to be done. Our ambition is to create a circular

economy in which we eliminate waste and reuse the resources we already

have. We are working with governments, non-governmental organizations

and companies outside our own industry to help drive progress. As part

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October 21, 2020 01:15 ET (05:15 GMT)