*DJ Nestle: Nestlé reports three-month sales for 2024

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April 25, 2024 01:00 ET (05:00 GMT)

[Ad hoc announcement pursuant to Art. 53 LR]

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Vevey, April 25, 2024

Nestlé reports three-month sales for 2024

===
-- Organic growth of 1.4%, with pricing of 3.4% and real internal growth
(RIG) of -2.0%.

-- Total reported sales were CHF 22.1 billion, a decrease of 5.9% (3M-2023:
CHF 23.5 billion). Foreign exchange decreased sales by 6.7%. Net
divestitures had a negative impact of 0.6%.

-- Overall, organic sales growth for the Group was driven by Europe and
emerging markets, with a negative impact from North America.

-- Full-year 2024 outlook confirmed: we expect organic sales growth of
around 4% and a moderate increase in the underlying trading operating
profit margin. Underlying earnings per share in constant currency is
expected to increase between 6% and 10%.
===
Mark Schneider, Nestlé CEO, commented: "We had expected a slow start and see a strong rebound in RIG in the second quarter with reliable delivery for the remainder of the year. A wide range of growth initiatives across the Group are now starting to deliver.

In North America, we have stepped up our innovation intensity and commercial activities, primarily in frozen food, which lost ground in the first quarter. The integration plan for Nestlé Health Science's vitamins, minerals and supplements business is on track, with the turning point expected in the second quarter and strong growth thereafter.

Nestlé's top priorities remain to execute with excellence, leverage our science and nutrition expertise and drive growth with our billionaire brands. We reiterate our 2024 guidance and look ahead with confidence."

===

Zone                      Zone     Zone    Nestlé 
Total    North    Zone    Zone     Latin   Greater    Health                  Other 
Group   America  Europe    AOA    America   China     Science    Nespresso  Businesses 

Sales
3M-2024
(CHF m) 22 092 5 823 4 642 4 240 3 072 1 233 1 511 1 503 68
Sales
3M-2023
(CHF m) 23 470 6 312 4 881 4 681 3 032 1 311 1 617 1 567 69
Real
internal
growth

(RIG)     - 2.0%   - 5.8%  - 0.2%   - 0.4%   - 0.8%     2.1%       - 3.6%     - 0.2%        3.0% 
Pricing      3.4%     3.3%    4.6%     4.1%     3.9%     1.5%         1.9%       1.2%        1.7% 

Organic

growth      1.4%   - 2.5%    4.4%     3.6%     3.1%     3.7%       - 1.8%       1.0%        4.7% 
Net M&A    - 0.6%     0.1%  - 3.6%   - 0.1%   - 0.1%     0.2%         0.7%       0.1%        0.0% 

Foreign
exchange - 6.7% - 5.3% - 5.8% - 13.0% - 1.5% - 9.8% - 5.6% - 5.1% - 5.9%
Reported
sales
growth - 5.9% - 7.7% - 5.0% - 9.4% 1.5% - 5.9% - 6.6% - 4.1% - 1.2%

===
Group sales

Organic growth was 1.4%. Pricing was 3.4%, following a high base of comparison in 2023. RIG was -2.0%, impacted by soft consumer demand, particularly in North America, and the temporary supply constraints for vitamins, minerals and supplements.

By geography, organic growth was driven by Europe and emerging markets, which more than offset a sales decrease in North America. In developed markets, organic growth was -0.4%, with negative RIG and positive pricing. In emerging markets, organic growth was 4.1%, led by pricing with slightly negative RIG.

By product category:

===
-- Purina PetCare was the largest contributor to organic growth, fueled by
continued momentum for science-based premium brands, Purina ONE, Fancy
Feast and Friskies.

-- Coffee delivered low single-digit growth, with continued momentum for
Nescafé, Nespresso and Starbucks.

-- Sales in Confectionery grew at a mid single-digit rate, with strong
growth for KitKat and seasonal products.

-- Water delivered mid single-digit growth, underpinned by the rebound in
Perrier and continued momentum for S.Pellegrino.

-- Infant Nutrition sales grew at a low single-digit rate, based on
continued momentum for NAN and human milk oligosaccharides (HMOs)
products.

-- As expected, Nestlé Health Science recorded negative growth, with
robust demand for Medical Nutrition more than offset by the temporary
supply constraints for vitamins, minerals and supplements.

-- Dairy posted negative growth, following a high base of comparison in the
prior year.

-- Culinary posted negative growth, as strong demand for Maggi was more than
offset by a sales decline for frozen food in North America.
===
By channel, organic growth in retail sales remained robust at 1.4%. E-commerce sales grew by 6.1%, reaching 17.4% of total Group sales. Organic growth of out-of-home channels was 2.0%.

Net divestitures decreased sales by 0.6%, largely related to the creation of a joint venture with PAI Partners for Nestlé's frozen pizza business in Europe. The impact on sales from foreign exchange was negative at 6.7%. Total reported sales decreased by 5.9% to CHF 22.1 billion.

Zone North America

===
-- -2.5% organic growth: -5.8% RIG; 3.3% pricing.

Sales     Sales                     Organic  Net   Foreign   Reported 
3M-2024   3M-2023    RIG    Pricing  growth   M&A   exchange   Growth 

Zone

North    CHF 5.8   CHF 6.3 
America     bn        bn     - 5.8%     3.3%   - 2.5%  0.1%    - 5.3%    - 7.7% 

===
Organic growth was -2.5%. Pricing moderated to 3.3%, following a high base of comparison in 2023. RIG was -5.8%, primarily driven by a decline in frozen food. Foreign exchange had a negative impact of 5.3%. Reported sales in Zone North America decreased by 7.7% to CHF 5.8 billion. The Zone saw market share gains in Purina PetCare and Coffee, with losses in frozen pizza and coffee creamers.

By product category, Purina PetCare was the largest growth contributor, with broad-based demand, particularly in e-commerce. Fancy Feast, Friskies and Purina One all delivered strong growth. Water sales grew at a mid single-digit rate, with strong momentum for S.Pellegrino and Acqua Panna. The beverages category posted a sales decrease, as robust growth for Starbucks, Nescafé and Seattle's Best was more than offset by negative growth for Coffee mate with a high base of comparison in the prior year. Infant Nutrition saw a sales decrease, as strong growth for Nido growing up milks was more than offset by declines for Gerber baby food. Growth in frozen food was negative, reflecting soft consumer demand for the category and intense price competition, particularly in frozen pizza and snacks, as well as the winding down of the frozen meals business in Canada, which is near completion.

Zone Europe

===
-- 4.4% organic growth: -0.2% RIG; 4.6% pricing.

Sales     Sales                     Organic   Net    Foreign   Reported 
3M-2024   3M-2023    RIG    Pricing  growth    M&A    exchange   Growth 
Zone     CHF 4.6   CHF 4.9 

Europe bn bn - 0.2% 4.6% 4.4% - 3.6% - 5.8% - 5.0%
===
Organic growth was 4.4%, with pricing of 4.6% and RIG of -0.2%. Foreign exchange negatively impacted sales by 5.8%. Net divestitures reduced sales by 3.6%. Reported sales in Zone Europe decreased by 5.0% to CHF 4.6 billion. Growth was broad-based across geographies and categories. The Zone saw market share gains in pet food and Infant Nutrition, with slowing market share losses in water.

By product category, the key contributor to growth was Purina PetCare, driven by premium brands Purina One, Felix and Gourmet. Sales in Coffee grew at a mid single-digit rate, with strong contributions by Nescafé and Starbucks products. Confectionery saw mid single-digit growth, with strong demand for KitKat and seasonal products. In January, the Zone launched KitKat Breaks for Good, the first chocolate bar made with cocoa sourced from farming families supported by Nestlé's income accelerator program. Water recorded mid single-digit growth, underpinned by a sales rebound for Perrier. Culinary sales grew at a low single-digit rate, led by Maggi, which expanded distribution for its noodles portfolio. Infant Nutrition saw low single-digit growth, following a high base of comparison in 2023.

Zone Asia, Oceania and Africa (AOA)

===
-- 3.6% organic growth: -0.4% RIG; 4.1% pricing.

Sales     Sales                     Organic   Net    Foreign   Reported 
3M-2024   3M-2023    RIG    Pricing  growth    M&A    exchange   Growth 
Zone   CHF 4.2   CHF 4.7 
AOA      bn        bn     - 0.4%     4.1%     3.6%  - 0.1%   - 13.0%    - 9.4% 

===
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