Vending

Nestle boosts HY 2022 on price hikes; earnings slide

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July 28, 2022

Nestle SA boosted its first half year 2022 sales close to 10% driven largely by price increases, while earnings suffered nearly a 12% decline, according to an earnings report. Highlights include:

• Total reported sales for the half year increased by 9.2% from CHF 41.8 billion ($42.88 billion) in 2021 to CHF 45.6 billion ($47.69 billion) for 2022.
• Organic growth reached 8.1%, with real internal growth of 1.7% and pricing of 6.5%.
• Net profit decreased by 11.7% to CHF 5.2 billion ($5.44 billion).
• Net earnings per share decreased by 9.5% to CHF 1.92 ($2.01) on a reported basis.
• Underlying earnings per share increased by 8.1% in constant currency and increased by 7.3% on a reported basis to CHF 2.33 ($2.44).
• By product category, Purina PetCare was the largest contributor to organic growth.
• Coffee sales grew at a high single-digit rate, with broad-based growth across brands and geographies, supported by a strong recovery of out-of-home channels.
• Confectionery reported double-digit growth, reflecting particular strength for KitKat and seasonal products.
• Growth in infant nutrition reached a high single-digit rate, with a return to positive growth in China and improving market share trends.
• Water posted double-digit growth, led by premium brands and a further recovery of out-of-home channels.
• Nestlé Health Science recorded high single-digit growth, driven by medical nutrition and healthy-aging products.
• Dairy reported mid-single-digit growth, with strong sales developments for coffee creamers and affordable nutrition offerings.
• 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.
• North America posted 9.6% organic growth from 11.4 billion CHF ($11.92 billion) in HY 2021 to 12.1 billion CHF ($12.65 billion) in HY 2022.
• Europe posted 7.1% organic growth from 9 billion CHF ($9.41 billion) to 9.3 billion CHF ($9.73 billion).
• Asia, Oceania and Africa posted 8.2% organic growth from 8.9 billion CHF ($9.31) to 9.3 billion CHF ($9.73 billion).
• Latin America posted 13.6% organic growth from 4.8 billion CHF ($5.02 billion) to 5.7 billion CHF ($5.96 billion).
• China posted 2.3% organic growth from 2.5 billion CHF ($2.61 billion) to 2.7 billion CHF ($2.82 billion).

Shares traded at $123.05 today against a 52-week range of $106.69-$141.95.

"In the first half of the year, we delivered strong organic growth and a significant increase in underlying earnings per share," Mark Schneider, CEO, said in the press release. "Our local teams implemented price increases in a responsible manner. Volume and product mix were resilient, based on our strong brands, differentiated offerings and leading market positions. We limited the impact of unprecedented inflationary pressures and supply chain constraints on our margin development through disciplined cost control and operational efficiencies."

For full year 2022, the company expects organic sales growth between 7% and 8%. Underlying earnings per share in constant currency and capital efficiency are expected to increase.