Vending
Nestle lifts 9-month sales for 2022, boosted by pricing, acquisitions
October 19, 2022
Nestle SA lifted its nine-month results for 2022 over the prior year period, boosted by acquisitions and pricing activity, according to an earnings release.
The company also announced plans today to buy the Seattle's Best Coffee brand from Starbucks.
Total reported sales increased by 9.2% from CHF 63.3 billion ($63 billion) for the 2021 nine-month period to CHF 69.1 billion ($68.77) in the 2022 period. Net acquisitions had a positive impact of 1.2% while foreign exchange decreased sales by 0.6%.
Organic growth was 8.5%, reaching 9.3% in the third quarter. Pricing was 7.5%, reflecting significant cost inflation.
Highlights include:
- By product category, Purina PetCare was the largest contributor to organic growth.
- Coffee sales grew at a high single-digit rate, with positive sales developments for Nescafé, Starbucks and Nespresso. Nespresso reported low single-digit organic growth, following double-digit growth in 2021, with consumption remaining above pre-pandemic levels. The Vertuo system saw further momentum, with broad-based contributions across geographies.
- 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.
- Zone North America reported double-digit organic growth, driven by pricing, strong momentum in e-commerce and further recovery of out-of-home channels.
- Zone Europe reported high single-digit organic growth. Pricing, continued momentum of out-of-home channels and innovation supported growth.
- Zone Asia, Oceania and Africa reached a high single-digit rate, driven by pricing, portfolio optimization and a further recovery of out-of-home channels.
- Zone Latin America maintained double-digit organic growth, with broad-based contributions across categories and geographies.
- Zone Greater China reported mid-single-digit organic growth, despite COVID-19-related movement restrictions.
Shares traded today at $105.93 against a 52-week range of $102.78-$141.95.
"We delivered strong organic growth as we continued to adjust prices responsibly to reflect inflation," CEO Mark Schneider said in the press release. "Our real internal growth remained resilient despite a high base of comparison and continued supply chain constraints, with limited demand elasticity."
The company now expects organic sales growth around 8% for full year 2022 with underlying earnings per share in constant currency and capital efficiency expected to increase.
