Press Release: Nestle: Nestlé reports three-month sales for 2023

[Ad hoc announcement pursuant to Art. 53 LR]

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Vevey, April 25, 2023

Nestlé reports three-month sales for 2023

-- Total reported sales increased by 5.6% to CHF 23.5 billion (3M-2022: CHF

22.2 billion). Foreign exchange decreased sales by 4.0%. Net acquisitions

had a positive impact of 0.3%.

-- Organic growth reached 9.3%, with broad-based contributions across

geographies and categories. Pricing was 9.8%, reflecting significant cost

inflation. Real internal growth (RIG) was -0.5%.

-- Full-year 2023 outlook confirmed: we expect organic sales growth between

6% and 8% and underlying trading operating profit margin between 17.0%

and 17.5%. Underlying earnings per share in constant currency is expected

to increase between 6% and 10%.

Mark Schneider, Nestlé CEO, commented:"Nestlé delivered strong organic growth in the first quarter, as our teams worked diligently to protect volume and ensure resilient mix. Portfolio optimization efforts and responsible pricing helped to offset the ongoing pressures from two years of cost inflation.

We continued our portfolio management journey with the creation of a joint venture dedicated to the frozen pizza business in Europe. The new partnership provides the best platform to develop the full potential of this business.

Following a strong start to the year, we confirm our full-year 2023 outlook and remain focused on creating value for all stakeholders".

Zone Zone Zone Nestlé

Total North Zone Zone Latin Greater Health Other

Group America Europe AOA America China Science Nespresso Businesses

Sales

3M-2023

(CHF m) 23 470 6 312 4 881 4 681 3 032 1 311 1 617 1 567 69

Sales

3M-2022

(CHF m) 22 238 5 800 4 633 4 633 2 697 1 361 1 449 1 602 63

Real

internal

growth

(RIG) - 0.5% - 0.8% - 1.0% 1.3% - 0.6% - 0.8% - 2.2% - 1.1% 12.7%

Pricing 9.8% 12.4% 10.7% 9.1% 13.4% 3.9% 5.0% 4.0% 0.1%

Organic

growth 9.3% 11.6% 9.7% 10.4% 12.8% 3.1% 2.8% 2.9% 12.8%

Net M&A 0.3% - 2.3% 1.1% - 0.1% 0.2% 0.0% 10.3% - 1.3% 0.0%

Foreign

exchange - 4.0% - 0.4% - 5.4% - 9.2% - 0.6% - 6.8% - 1.7% - 3.8% - 2.3%

Reported

sales

growth 5.6% 8.9% 5.4% 1.1% 12.5% - 3.7% 11.3% - 2.2% 10.5%

Group sales

Organic growth was 9.3%. Pricing was 9.8%, reflecting significant cost inflation. RIG was -0.5%, impacted by capacity constraints and portfolio optimization actions. Demand elasticity and consumer downtrading remained limited in the context of pricing actions.

Growth was broad-based across most geographies and categories. Organic growth was 8.6% in developed markets, led by pricing. Organic growth in emerging markets was 10.3%, driven by pricing and positive RIG.

By product category, Purina PetCare was the largest contributor to organic growth, fueled by strong momentum for science-based and premium brands Purina ONE, Purina Pro Plan and Friskies. Coffee saw high single-digit growth, with positive sales developments for Nescafé, Starbucks and Nespresso. Sales in confectionery grew at a double-digit rate, with strong growth for KitKat and seasonal products. Growth in Infant Nutrition reached a double-digit rate, with broad-based contributions across geographies and segments. Dairy reported high single-digit growth, with strong demand for coffee creamers and affordable fortified milks. Prepared dishes and cooking aids posted high single-digit growth, led by Maggi, Stouffers and Hot Pockets. Nestlé Health Science recorded low single-digit growth, with continued strong demand for Medical Nutrition and a positive sales development for active nutrition. Despite temporary capacity constraints for Perrier, water posted low single-digit growth led by S.Pellegrino.

By channel, organic growth in retail sales remained robust at 8.7%. E-commerce sales grew by 13.6%, reaching 16.2% of total Group sales. Organic growth of out-of-home channels was 17.8%.

Net acquisitions increased sales by 0.3%, largely related to the acquisition of Orgain. The impact on sales from foreign exchange was negative at 4.0%. Total reported sales increased by 5.6% to CHF 23.5 billion.

Portfolio Management

Nestlé and private equity firm PAI Partners have agreed to set up a joint venture for Nestlé's frozen pizza business in Europe, creating a dedicated player in a competitive and dynamic category. Nestlé will retain a non-controlling stake with equal voting rights alongside PAI Partners, remaining invested in this business and participating in future growth and value creation in the category. The transaction is subject to employee consultations and the approval of regulatory authorities and is expected to close in the second half of 2023.

Zone North America

-- 11.6% organic growth: -0.8% RIG; 12.4% pricing.

Sales Sales Organic Net Foreign Reported

3M-2023 3M-2022 RIG Pricing growth M&A exchange Growth

Zone

North CHF 6.3 CHF 5.8

America bn bn - 0.8% 12.4% 11.6% - 2.3% - 0.4% 8.9%

Organic growth was 11.6%, with pricing of 12.4%. RIG was -0.8%, with a strong recovery versus the fourth quarter of 2022. Net divestitures reduced sales by 2.3%, as a result of the divestment of a majority stake in Freshly as well as the disposal of the Gerber Good Start infant formula brand. Reported sales in Zone North America increased by 8.9% to CHF 6.3 billion.

Zone North America saw broad-based growth across brands and categories, driven by pricing, strong operational execution and continued momentum in e-commerce. The Zone saw market share gains in pet food, frozen meals and soluble coffee.

By product category, Purina PetCare was the largest growth contributor, with broad-based demand across channels, particularly e-commerce. Purina ONE, Purina Pro Plan and Friskies all saw strong double-digit growth. Sales for Nestlé Professional and Starbucks out-of-home solutions grew at a strong double-digit rate, supported by distribution expansion. The beverages category, including Coffee mate, Nescafé and Starbucks products, posted high single-digit growth. Frozen food saw mid single-digit growth, based on strong demand for Stouffers as well as Tombstone and Jack's pizza. In February, the Zone announced the decision to wind down its frozen meals and pizza business in Canada starting from the second quarter. Gerber baby food reported double-digit growth and gained market share, with particular strength for healthy snacking products. Confectionery in Canada recorded double-digit growth, led by KitKat. Water saw a sales decrease, as temporary capacity constraints for Perrier outweighed strong growth for S.Pellegrino.

Zone Europe

-- 9.7% organic growth: -1.0% RIG; 10.7% pricing.

Sales Sales Organic Net Foreign Reported

3M-2023 3M-2022 RIG Pricing growth M&A exchange Growth

Zone CHF 4.9 CHF 4.6

Europe bn bn -1.0% 10.7% 9.7% 1.1% -5.4% 5.4%

Organic growth was 9.7%, with pricing of 10.7%. RIG was -1.0%. Foreign exchange negatively impacted sales by 5.4%, reflecting the appreciation of the Swiss franc against the Euro. Reported sales in Zone Europe increased by 5.4% to CHF 4.9 billion.

Growth in Zone Europe was supported by pricing, sustained e-commerce momentum and a strong sales development for out-of-home channels. The Zone saw market share gains in pet food, confectionery and Infant Nutrition.

By product category, the key contributor to growth was Purina PetCare, driven by premium brands Felix, Friskies and Gourmet. A new celebrity campaign for Felix resonated strongly with consumers. Confectionery reported double-digit growth, with strong demand for KitKat and seasonal products. Sales in Nestlé Professional grew at a double-digit rate, supported by branded coffee solutions. Coffee saw high single-digit growth, supported by Nescafé and Starbucks products. Nescafé Farmers Origins, a range of coffee capsules for Nespresso machines, saw strong growth and is now sold in seven markets. Infant Nutrition posted mid single-digit growth, based on continued demand for premium infant formula, particularly NAN. Culinary reported low single-digit growth, with particular strength for Maggi. Water posted a sales decrease, as the impact of temporary capacity constraints for Perrier outweighed a strong sales development for S.Pellegrino.

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