Nestle S.a. · SIX:NESN
Nestle — H1 2021 Earnings Presentation
36 slides from Nestle's earnings presentation, Jul 29, 2021
Slide 1: Half-year results 2021
Half-year results 2021 J u l y
Slide 2: Disclaimer
Disclaimer This presentation contains forward looking statements which reflect Management’s current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements.
Slide 3: Half-year results 2021 – Mark Schneider, CEO
Half-year results 2021 Mark Schneider, CEO
Slide 4: Key messages
Key messages • Organic sales growth of 8.1%, with strong RIG and increased pricing • Underlying trading operating profit margin unchanged at 17.4% • Underlying EPS growth of 10.5% in constant currency • Further progress in portfolio transformation, including acquisition of The Bountiful Company’s co
Slide 5: Creating a global leader in vitamins, minerals and supplements
Creating a global leader in vitamins, minerals and supplements • Large, fast-growing categories addressing the needs of health-conscious consumers • Step change with the Bountiful acquisition making Nestlé Health Science the global leader • Complementary product and channel mix • Increased scale and
Slide 6: Business as force for good: towards a water positive future
Business as force for good: towards a water positive future Regenerating local water cycles • 100 projects across 48 Nestlé Waters sites • Expands on ongoing Alliance for Water Stewardship commitment • Solutions tailored to local challenges • Science-based approach, backed by external panel of exper
Slide 7: 2021 guidance updated
2021 guidance updated • We expect full-year organic sales growth between 5% and 6% • The underlying trading operating profit margin is now expected around 17.5%, reflecting initial time delays between input cost inflation and pricing as well as the one- off integration costs related to the acquisiti
Slide 8: Half-year results 2021 – François-Xavier Roger, CFO
Half-year results 2021 François-Xavier Roger, CFO J u l y
Slide 9: Half-year sales growth
Half-year sales growth OG +8.1% +1.3% -3.1% +6.8% -3.5% 41.8 41.2 Reported sales growth +1.5% -30 HY-2020 sales RIG Pricing Net M&A Foreign HY-2021 sales CHF bn exchange CHF bn 9 July 29, 2021 Nestlé half-year results 2021
Slide 10: Broad-based growth
Broad-based growth AMS EMENA AOA Sales 18.3 bn 12.6 bn 10.9 bn (in CHF) RIG 6.9% 7.3% 6.1% Pricing 2.0% 0.7% 0.7% OG 8.9% 8.0% 6.8% Each geography includes Zones, Nespresso, and Nestlé Health Science 10 July 29, 2021 Nestlé half-year results 2021
Slide 11: Strong growth across developed and emerging markets
Strong growth across developed and emerging markets Developed Emerging Sales (in CHF) 24.3 bn 17.5 bn % of Group sales 58% 42% RIG 6.7% 7.1% Pricing 0.1% 2.9% OG 6.7% 10.0% 11 July 29, 2021 Nestlé half-year results 2021
Slide 12: Strong momentum in retail, gradual recovery in out-of-home
Strong momentum in retail, gradual recovery in out-of-home Organic sales growth Retail Out-of-home* HY-2019 HY-2020 HY-2021 HY-2019 HY-2020 HY-2021 21.3% 6.3% 7.3% 3.6% 4.3% -34.6% * Includes Nestlé Professional, foodservice activities of Nespresso, Starbucks products and water, travel retail and Bl
Slide 13: Managing cost inflation
Managing cost inflation Pricing Mitigating actions H1-2020 H2-2020 H1-2021 H2-2021 • Increasing pricing, while strengthening access to affordable nutrition • Optimizing product mix 1.3% • Rolling out strategic revenue management tools 0.5% • Leveraging efficiencies, cost management 0.2% initiatives
Slide 14: Zone AMS
Zone AMS Sales CHF 16.2 bn Organic growth 7.6% Real internal growth 5.3% Underlying TOP margin 19.3% vs LY Stouffers or Dairy +40 bps • Strong organic growth, based on innovation, e-commerce momentum and market share gains • North America reported mid single-digit growth, led by Purina PetCare, coff
Slide 15: Zone EMENA
Zone EMENA Sales CHF 10.2 bn Organic growth 7.3% Real internal growth 6.7% Underlying TOP margin 18.8% vs LY +50 bps • Strong organic growth, supported by innovation, e-commerce momentum and market share gains • All regions reported positive growth, with strong sales developments in Russia, Turkey,
Slide 16: Zone AOA
Zone AOA Sales CHF 10.2 bn Organic growth 6.8% Real internal growth 6.3% Underlying TOP margin 22.3% vs LY -40 bps • Robust organic growth in a difficult environment, with market share gains in most categories • China posted double-digit growth, helped by out-of- home recovery and the timing of Chin
Slide 17: Nespresso
Nespresso Sales CHF 3.2 bn Organic growth 14.6% Real internal growth 13.8% Underlying TOP margin 26.0% vs LY +10 bps • Strong organic growth, led by Vertuo and a return to growth in boutiques and out-of-home • The Americas, EMENA and AOA saw double-digit growth • Market share gains, with contributio
Slide 18: Nestlé Health Science
Nestlé Health Science Sales CHF 1.9 bn Organic growth 13.6% Real internal growth 13.6% Underlying TOP margin 13.5% vs LY -580 bps • Strong organic growth, driven by sustained e-commerce momentum, product launches and geographic expansion • Consumer care saw double-digit growth, led by vitamins, mine
Slide 19: All categories back to growth
All categories back to growth Organic sales growth % 11.0% 11.0% 10.3% 8.1% 8.0% 8.2% 3.6% 1.0% Total Group Powdered and PetCare Prepared dishes Nutrition and Milk products Confectionery Water Liquid Beverages and cooking aids Health Science and Ice cream 19 July 29, 2021 Nestlé half-year results 20
Slide 20: Underlying trading operating profit margin by category
Underlying trading operating profit margin by category In % of sales 24.9% 25.2% 21.2% 17.4% 17.8% 16.3% 11.5% 8.9% Change in bps flat +190 -80 -210 -550 +240 +210 +50 vs HY-2020 Total Group* Powdered and PetCare Prepared dishes Nutrition and Milk products Confectionery Water Liquid Beverages and co
Slide 21: Underlying trading operating profit margin
Underlying trading operating profit margin 17.4% +20 bps 17.X% -30 bps 17.2% +20 bps 17.1% -10 bps 17.4% 17.4% -30 Margin flat in constant currency and reported basis Underlying TOP Gross Distribution Administration R&D Underlying TOP HY-2020 margin* & marketing HY-2021 * Gross margin = Sales – cost
Slide 22: Underlying earnings per share
Underlying earnings per share In constant currency 2.4% -2.6% 2.8% CHF -2.2% 2.22 1.4% CHF 2.17 6.5% CHF 2.01 Evolution in constant currency +10.5% Evolution on reported basis +8.3% UEPS Operating Share Net finance Others* M&A UEPS FX UEPS HY-2020 performance buyback costs & tax HY-2021 impact HY-20
Slide 23: Free cash flow
Free cash flow In CHF billion 0.2 0.1 3.3 -1.1 0.3 2.8 Free cash flow Adjusted Working CAPEX and Others* Free cash flow HY-2020 EBITDA capital expenditure on HY-2021 intangible assets * Includes the effect of delayed dividend payment of an associate company in 2020 23 July 29, 2021 Nestlé half-year
Slide 24: Q&A
Half-year results 2021 Q&A J u l y
Slide 25: Supporting slides
Half-year results 2021 Supporting slides J u l y
Slide 26: HY-2021 Operating segments – topline summary
HY-2021 Operating segments – topline summary HY-2021 sales Reported Sales RIG Pricing OG Net M&A F/X sales growth (CHF m) % % % % % % Zone AMS 16 162 5.3 2.3 7.6 -4.3 -6.3 -3.1 Zone EMENA 10 214 6.7 0.6 7.3 -4.1 -1.4 1.8 Zone AOA 10 210 6.3 0.5 6.8 -3.7 -1.7 1.5 Nespresso 3 158 13.8 0.8 14.6 -0.2 -0
Slide 27: HY-2021 Products – topline summary
HY-2021 Products – topline summary HY-2021 sales Sales RIG Pricing OG (CHF m) % % % Powdered and liquid beverages 11 648 10.3 0.7 11.0 Water 2 291 2.0 1.6 3.6 Milk products and ice cream 5 205 4.8 3.5 8.2 Nutrition and Health Science 6 060 -0.1 1.1 1.0 Prepared dishes and cooking aids 5 919 7.1 0.9
Slide 28: HY-2021 Historical eight quarters
HY-2021 Historical eight quarters Period RIG Pricing OG % % % Q3-2019 3.9 -0.2 3.7 Q4-2019 2.5 0.5 3.0 Q1-2020 4.7 -0.4 4.3 Q2-2020 0.5 0.8 1.3 Q3-2020 4.8 0.1 4.9 Q4-2020 3.0 0.9 3.9 Q1-2021 6.4 1.2 7.7 Q2-2021 7.3 1.3 8.6 28 July 29, 2021 Nestlé half-year results 2021
Slide 29: HY-2021 Operating segments – revenue and results
HY-2021 Operating segments – revenue and results In CHF m Of which Underlying Net other impairment Trading Trading trading of property, Of which Depreciation Operating Operating income/ plant and restructuring and Sales Profit Profit (expense) equipment costs amortization Zone AMS 16 162 3 112 2 958
Slide 30: HY-2021 Products – revenue and results
HY-2021 Products – revenue and results In CHF m Underlying Of which Trading Trading Net other impairment of Of which Operating Operating trading income/ property, plant restructuring Sales Profit Profit (expense) and equipment costs Powdered and Liquid Beverages 11 648 2 905 2 767 (138) (24) (14) Wa
Slide 31: HY-2021 EPS reconciliation (1 of 2)
HY-2021 EPS reconciliation (1 of 2) From net profit to underlying net profit In CHF m HY-2020 HY-2021 Net Profit 5 883 5 945 Restructuring costs 66 62 Impairments of property, plant & equipment, goodwill and int. assets 493 177 Net result on disposal of businesses (1 482) (212) Other adjustment in N
Slide 32: HY-2021 EPS reconciliation (2 of 2)
HY-2021 EPS reconciliation (2 of 2) From underlying trading operating profit to In CHF m underlying net profit HY-2020 HY-2021 Underlying trading operating profit 7 156 7 251 Net financial income / (expense) (447) (416) Adjusted taxes (1 435) (1 380) Adjusted income from associates and joint venture
Slide 33: HY-2021 Currency overview
HY-2021 Currency overview Weighted average rate HY-2020 HY-2021 Variation in % US Dollar 1 USD 0.966 0.908 -6.0% Euro 1 EUR 1.064 1.094 +2.8% Chinese Yuan Renminbi 100 CNY 13.729 14.011 +2.1% Brazilian Real 100 BRL 19.710 16.914 -14.2% Philippine Peso 100 PHP 1.908 1.882 -1.4% UK Pound Sterling 1 GB
Slide 34: Underlying EPS
Underlying EPS % of sales HY-2021 vs HY-2020 flat Underlying trading operating profit 17.4% Impairment of assets (excl. Goodwill and non-commercialized intangible assets) -20 bps Result on real estate operations +10 bps Restructuring, onerous contracts, litigation and other trading income / expenses
Slide 35: Quarterly organic sales growth by channel
Quarterly organic sales growth by channel OG % Retail Out-of-home* 9.2 8.6 84.1 6.9 6.8 5.7 5.4 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q2-2021 -11.2 -11.6 -26.4 -27.0 -54.7 * Includes Nestlé Professional, foodservice activities of Nespresso, Starbucks
Slide 36: Abbreviations
Abbreviations • OG Organic growth • RIG Real internal growth • AMS Zone Americas • EMENA Zone Europe, Middle East, and North Africa • AOA Zone Asia, Oceania, and sub-Saharan Africa • EPS Earnings per share • COGS Cost of goods sold • FCF Free cash flow • TOP Trading operating profit • UTOP Underlyin