Coffee Service

Nestle boosts sales 2.2% for 2021’s 9 months

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October 20, 2021

Nestle SA reported a 2.2% sales gain for the firsts nine months of 2021, driven mostly by coffee sales, according to a financial report.

Total reported sales rose 2.2% to CHF 63.3 billion ($6.84 billion) for the nine-month period.

Organic growth reached 7.6%, with real internal growth of 6%. Pricing increased to 1.6%, accelerating to 2.1% in the third quarter.

Growth was broad-based across most geographies and categories. Organic growth reached 7.1% in developed markets, based mostly on real internal growth with positive pricing. Organic growth in emerging markets was 8.3%, with robust RIG and positive pricing.

By product category, the largest contributor to organic growth was coffee, fueled by strong momentum for the three main brands Nescafé, Nespresso and Starbucks.

Starbucks products posted 15.5% growth, with sales reaching CHF 2.2 billion ($2.39 billion) across 79 markets.

Prepared dishes and cooking aids posted high single-digit growth, based on strong sales developments for Maggi, Stouffer's and Lean Cuisine.

Vegetarian and plant-based food offerings saw double-digit growth, with continued expansion of the product range, led by Garden Gourmet.

Dairy reported mid-single-digit growth, based on sustained demand for fortified milks, coffee creamers and ice cream.

Confectionery recorded high single-digit growth, supported by a strong sales development for KitKat.

Sales in Nestlé Health Science grew at a double-digit rate, reflecting strong demand for consumer care products, particularly vitamins, minerals and supplements.

By channel, organic growth in retail sales was 6.6%. E-commerce sales grew by 17.2%, reaching 14.1% of total group sales, with strong momentum in most categories, particularly coffee, Purina PetCare and culinary.

Organic growth in out-of-home channels was 22.8%, helped by the further easing of movement restrictions in some geographies.

"We are pleased with Nestlé's strong organic growth in the nine months, driven by broad-based contributions from most geographies and categories," Mark Schneider, Nestlé CEO, said in the press release.

Shares traded at $126.21 today against a 52-week range of $104.50-$126.17.

The company expects full-year organic sales growth between 6% and 7%. The underlying trading operating profit margin is 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 acquisition of The Bountiful Co.'s core brands. Beyond 2021, mid-term outlook for continued moderate margin improvement remains unchanged. Underlying earnings per share in constant currency and capital efficiency are expected to increase this year.