Press Release: Nestle: Nestlé reports nine-month sales for 2022

[Ad hoc announcement pursuant to Art. 53 LR]

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Vevey, October 19, 2022

Nestlé reports nine-month sales for 2022

-- Organic growth reached 8.5%. Pricing was 7.5%, reflecting significant

cost inflation. Real internal growth (RIG) was resilient at 1.0%. Organic

growth was broad-based across most geographies and categories.

-- Total reported sales increased by 9.2% to CHF 69.1 billion (9M-2021:

CHF 63.3 billion). Net acquisitions had a positive impact of 1.2%.

Foreign exchange decreased sales by 0.6%.

-- Portfolio management on track. In the third quarter, Nestlé Health

Science completed the acquisitions of Puravida in Brazil and The Better

Health Company in New Zealand.

-- Full-year 2022 outlook updated: we now expect organic sales growth around

8%. The underlying trading operating profit margin is expected around

17.0%. Underlying earnings per share in constant currency and capital

efficiency are expected to increase.

Mark Schneider, Nestlé CEO, commented:"We delivered strong organic growth as we continued to adjust prices responsibly to reflect inflation. The challenging economic environment is a concern for many people and is impacting their purchasing power. That's why we aim to keep products affordable and accessible while considering the interests of all our stakeholders. Our real internal growth remained resilient despite a high base of comparison and continued supply chain constraints, with limited demand elasticity. At the same time, we continue to invest in R&D, marketing and sustainability initiatives, as demonstrated by the recent launch of our Nescafé Plan 2030. We remain confident in the strength of our brands, operational execution and underlying category dynamics which position us well for future growth."

Zone Zone Zone Nestlé

Total North Zone Zone Latin Greater Health Other

Group America Europe AOA America China Nespresso Science Businesses

Sales

9M-2022

(CHF m) 69 132 19 093 13 968 13 899 8 648 3 843 4 674 4 811 196

Sales

9M-2021

(CHF m)* 63 294 17 173 13 736 13 343 7 416 3 585 4 654 3 237 150

Real

internal

growth

(RIG)** 1.0% 0.1% 1.5% 1.1% 2.5% 2.1% - 1.9% 1.9% 28.0%

Pricing** 7.5% 11.1% 5.7% 7.0% 10.5% 2.6% 4.9% 2.6% 3.0%

Organic

growth** 8.5% 11.2% 7.1% 8.1% 12.9% 4.7% 3.0% 4.5% 31.0%

Net M&A** 1.2% - 4.8% 2.0% - 0.1% 0.1% 0.0% - 0.1% 42.5% 0.0%

Foreign

exchange** - 0.6% 4.8% - 7.5% - 3.9% 3.6% 2.4% - 2.5% 1.6% 0.2%

Reported

sales

growth 9.2% 11.2% 1.7% 4.2% 16.6% 7.2% 0.4% 48.6% 31.2%

* 2021 figures restated following the creation of Zone North America (NA) and Zone Greater China (GC) as of January 1, 2022. Zone AOA includes Middle East and North Africa (MENA) previously included in Zone EMENA

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

Group sales

Organic growth was 8.5%, reaching 9.3% in the third quarter. Pricing was 7.5%, reflecting significant cost inflation. RIG was resilient at 1.0% following a high base of comparison in 2021 and continued supply chain constraints, with limited demand elasticity.

Organic growth was 7.4% in developed markets, mostly driven by pricing with slightly positive RIG. Organic growth in emerging markets was 10.2%, supported by both pricing and RIG.

By product category, Purina PetCare was the largest contributor to organic growth, with continued momentum for science-based and premium brands Purina Pro Plan, Purina ONE and Fancy Feast as well as veterinary products. Sales in coffee grew at a high single-digit rate, with positive sales developments for Nescafé, Starbucks and Nespresso. Growth in Infant Nutrition reached a double-digit rate, with broad-based contributions across geographies. Confectionery reported double-digit growth, reflecting particular strength for KitKat and seasonal products. Water posted double-digit growth, despite supply chain constraints, led by premium brands, S. Pellegrino, Acqua Panna and Perrier. Dairy reported mid single-digit growth, with continued momentum for coffee creamers and a recovery for home-baking products. Cocoa and malt beverages saw high single-digit growth, with particular strength for Milo as well as Nesquik ready-to-drink formats. Prepared dishes and cooking aids posted low single-digit growth, following a high base of comparison in 2021, with continued strong demand for Maggi. Sales in vegetarian and plant-based food continued to grow at a double-digit rate, led by Garden Gourmet. Nestlé Health Science recorded mid single-digit growth, driven by Medical Nutrition and healthy-aging products.

By channel, organic growth in retail sales remained robust at 7.3%. Within retail, e-commerce sales grew by 8.4%, building on growth of 17.2% in the first nine months of 2021. Organic growth in out-of-home channels reached 26.1%, with sales exceeding 2019 levels.

Net acquisitions increased sales by 1.2%, largely related to the acquisitions of the core brands of The Bountiful Company and Orgain. The impact on sales from foreign exchange was negative at 0.6%. Total reported sales increased by 9.2% to CHF 69.1 billion.

Portfolio Management

On April 1, 2022, Nestlé Health Science completed the acquisition of a majority stake in Orgain, a leader in plant-based nutrition. Orgain complements Nestlé Health Science's existing portfolio of nutrition products that support healthier lives. The deal is expected to be slightly accretive to Nestlé's organic growth, while slightly dilutive to the Group's underlying trading operating profit margin in 2022. The agreement includes the option for Nestlé Health Science to fully acquire Orgain in 2024.

On September 1, 2022, Nestlé Health Science completed the acquisition of Puravida, a premium Brazilian nutrition and health lifestyle brand. The acquisition will enable Nestlé Health Science to expand its consumer health portfolio in Latin America.

On September 1, 2022, Nestlé Health Science completed the acquisition of The Better Health Company. The acquisition includes the GO Healthy brand, New Zealand's leading supplement brand, and New Zealand Health Manufacturing, an Auckland-based manufacturing facility for vitamins, minerals and supplements. The acquisition will expand Nestlé Health Science's portfolio of vitamins, minerals and supplements in AOA.

Zone North America

-- 11.2% organic growth: 0.1% RIG; 11.1% pricing.

Sales Sales Organic Net Foreign Reported

9M-2022 9M-2021 RIG Pricing growth M&A exchange growth

Zone

North CHF 19.1 CHF 17.2

America bn bn 0.1% 11.1% 11.2% - 4.8% 4.8% 11.2%

Organic growth was 11.2%, with pricing of 11.1%. RIG was 0.1%, with a high base of comparison in 2021 and supply chain constraints. Net divestitures reduced sales by 4.8%, mainly due to the divestment of the Nestlé Waters North America brands. Foreign exchange had a positive impact of 4.8%. Reported sales in Zone North America increased by 11.2% to CHF 19.1 billion.

Zone North America reported double-digit organic growth, driven by pricing, strong momentum in e-commerce and further recovery of out-of-home channels. Nestlé gained market share in the Zone, led by pet food as well as portioned and soluble coffee.

By product category, Purina PetCare was the largest growth contributor with strong momentum across channels, particularly in e-commerce and pet specialty stores. Purina Pro Plan, including veterinary products, Purina ONE and Fancy Feast all posted strong double-digit growth, supported by innovation. Sales in Nestlé Professional and Starbucks out-of-home products grew at a strong double-digit rate. Growth in the beverages category, including Starbucks at-home products, Coffee mate and Nescafé, was close to a double-digit rate. Infant formula saw strong demand, following continued supply constraints in the market. Baby food posted robust growth, based on new launches in healthy snacking and plant-based offerings. Sales in premium water grew at a double-digit rate, driven by S.Pellegrino and Essentia. Frozen food reported low single-digit growth, following a high base of comparison in 2021. Both frozen pizza and frozen meals saw positive sales developments. Dairy-based products, including Carnation and Nido, also posted double-digit growth with market share gains. Ready-to-drink Nesquik in the U.S. and KitKat in Canada saw double-digit

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