NESTLE NOM. 
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| | | Change vs. |
| | | Jan.-June 2008 |
|--------------+------------------+---------------------------------|
| CHF Millions | Reported | Organic | Reported | Constant |
| | Jan.-June | growth | | Currencies |
| | 2009 | | | |
|--------------+------------------+---------+----------+------------|
| Sales | | | | |
|--------------+------------------+---------+----------+------------|
| Group | 52 267 | +3.5% | -1.5% | +2.8% |
|--------------+------------------+---------+----------+------------|
| Food & | 48 313 | +3.4% | -2.0% | +2.7% |
| Beverages | | | | |
|--------------+------------------+---------+----------+------------|
| EBIT margin | | | | |
|--------------+------------------+---------+----------+------------|
| Group | 14.1% | - | +30 bps | +30 bps |
|--------------+------------------+---------+----------+------------|
| Food & | 12.4% | - | +10 bps | +20 bps |
| Beverages | | | | |
|--------------+------------------+---------+----------+------------|
| Earnings Per | | | | |
| Share | CHF 1.46 | - | +3.5% | +8.5% |
| Underlying | | | | |
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All calculations based on non-rounded figures
* Nestlé Group: 3.5% organic growth, 0.5% real internal growth
EBIT margin 14.1%, +30 bps both in reported and constant
currencies
* Food and Beverages: 3.4% organic growth, 0.1% real internal
growth
EBIT margin 12.4%, +10 bps reported, +20 bps in constant
currencies
* Net profit: CHF 5.1 billion, 9.7% of sales
* Underlying earnings per share: CHF 1.46, +3.5% reported, +8.5% in
constant currencies
* Operating cash flow: CHF 6.4 billion, up from CHF 3.5 billion in
the first half of 2008
Paul Bulcke, CEO of Nestlé: "With 3.5% organic growth and a 30 basis
point EBIT margin improvement, Nestlé delivered a combination of
growth and increased profitability in the first half of the year, and
this in a very challenging business environment. The success of our
efficiency initiatives enabled increased investment in
consumer-facing marketing and R&D, which leads me to expect an
acceleration in organic growth in the second half of 2009.
Furthermore, Nestlé's healthy cash flow over the first half allowed
us to return about CHF 6.5 billion in cash to shareholders. The Group
remains committed to its strategic direction focused on sustainable,
long-term profitable growth and is well placed to capture
opportunities as economic conditions improve."
Group sales, profitability and financial position
Vevey, 12 August 2009 - In the first six months of 2009, Nestlé
achieved organic growth of 3.5%, including 0.5% real internal growth.
Divestitures, net of acquisitions, reduced Group sales by 0.7%,
whilst the currency effect resulted in a 4.3% reduction due to the
strength of the Swiss franc compared to many other currencies. These
factors resulted in a decline in Nestlé Group sales of 1.5%, to CHF
52.3 billion. Food and Beverages' sales reached CHF 48.3 billion,
with organic growth of 3.4%, including real internal growth of 0.1%.
This builds on the strong first half of 2008 when Nestlé achieved
organic growth of 8.9%.
The Group's EBIT grew to CHF 7.4 billion, resulting in an increased
EBIT margin of 14.1% of sales. This represents a 30 basis points
improvement, both in constant and reporting currencies. Food and
Beverages' EBIT margin was up 20 basis points in constant currencies
and 10 basis points reported, to 12.4%.
The acceleration of Nestlé Continuous Excellence, the Group's
efficiency programme, contributed to a 30 basis points decline in
both the cost of goods sold and distribution costs. The Group's
commitment to brand building, including innovation and renovation, is
reflected in the 10 basis points increase in consumer-facing
marketing and a 20 basis points increase in Research and Development.
Nestlé's net profit margin reached 9.7% of sales. Underlying earnings
per share grew by 3.5% to CHF 1.46, up 8.5% in constant currencies.
On 30 June 2009, the Group's operating cash flow was CHF 6.4 billion,
significantly up from CHF 3.5 billion in the first half of 2008,
reflecting its commitment to capital efficiency. The Group's net debt
was CHF 17.4 billion, down from CHF 25.8 billion at the end of June
2008. The continuing share buyback programme and the payment of the
dividend together resulted in about CHF 6.5 billion of cash returned
to shareholders in the first half of 2009.
Share buyback programme
On 28 July 2009, Nestlé completed the first stage of its CHF 25
billion share buyback programme, amounting to CHF 15 billion. A
second stage of this programme, amounting to CHF 10 billion, will
start on 13 August 2009. Nestlé's CHF 25 billion share buyback
programme is foreseen to be completed by end of 2010.
Sales and EBIT margin by operating segment
In the first half of 2009, the organic growth of Nestlé's overall
Food and Beverages activities amounted to 0.5% in Europe, 4.6% in the
Americas and 6.6% in Asia, Oceania and Africa.
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| | Jan.-June | Jan.-June | EBIT margins |
|------------------| 2009 | 2009 |------------------------|
| | Sales | Organic | Jan.-June | Change vs |
| | in CHF | Growth | 2009 | Jan.-June |
| | millions | (%) | | 2008 |
|------------------+-----------+-----------+-----------+------------|
| Food & Beverages | | | | |
| * Zone Europe | 10 791 | + 0.2 | 11.8% | 0 bps |
|------------------+-----------+-----------+-----------+------------|
| * Zone Americas | 15 197 | + 6.6 | 15.2% | +20 bps |
|------------------+-----------+-----------+-----------+------------|
| * Zone Asia, | 7 733 | + 5.9 | 16.7% | +60 bps |
| Oceania, | | | | |
| Africa | | | | |
|------------------+-----------+-----------+-----------+------------|
| Nestlé Waters | 4 723 | - 2.9 | 8.3% | +110 bps |
|------------------+-----------+-----------+-----------+------------|
| Nestlé Nutrition | 4 995 | + 1.5 | 17.4% | -110 bps |
|------------------+-----------+-----------+-----------+------------|
| Other Food & | 4 874 | + 6.1 | 16.1% | +20 bps |
| Beverages | | | | |
|------------------+-----------+-----------+-----------+------------|
| Total Food & | 48 313 | + 3.4 | 12.4% | +10 bps |
| Beverages | | | | |
|------------------+-----------+-----------+-----------+------------|
| Pharma | 3 954 | + 5.0 | 34.6% | +80 bps |
|------------------+-----------+-----------+-----------+------------|
| Group Total | 52 267 | + 3.5 | 14.1% | +30 bps |
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All calculations based on non-rounded figures
Globally managed Nestlé Professional activities have been taken out
of the Zones and included in "Other Food & Beverages". 2008
comparatives have been restated.
Zone Europe: sales of CHF 10.8 billion, 0.2% organic growth and -1.5%
real internal growth. The EBIT margin was 11.8%, the same level as a
year ago. Savings from the acceleration of the Nestlé Continuous
Excellence Programme compensated temporary volume softness,
additional pension costs and continued investment in marketing. Great
Britain and Eastern Europe, particularly Russia and the Ukraine, as
well as the regional petcare business and soluble coffee, achieved
high organic growth.
Zone Americas: sales of CHF 15.2 billion, 6.6% organic growth and
1.9% real internal growth. The EBIT margin improved by 20 basis
points due to growth and significant cost savings from the Nestlé
Continuous Excellence Programme. Both North and Latin America
experienced strong organic growth, particularly the US, Brazil and
Mexico. Soluble coffee and beverages, frozen food and petcare did
particularly well.
Zone Asia, Oceania and Africa: sales of CHF 7.7 billion, 5.9% organic
growth and 2.2% real internal growth. The EBIT margin improved by 60
basis points due to growth leverage and operational efficiencies.
There were good performances across the emerging markets with Africa,
China, India and the Philippines, amongst others, achieving
double-digit organic growth. Soluble coffee, ambient culinary,
powdered and ready-to-drink beverages, petcare and chocolate all
delivered strong organic growth. Popularly Positioned Products
(PPPs), aimed at emerging consumers, continued to achieve
double-digit organic growth.
Nestlé Waters: sales of CHF 4.7 billion, -2.9% organic growth and
-3.7% real internal growth. The EBIT margin increased by 110 basis
points, benefiting from lower oil-related costs, efficiencies and
supply chain optimisation. The organic growth reflects the current
environment in the bottled water industry as a whole, particularly in
Western Europe and North America. The emerging market businesses
achieved double-digit organic growth. Nestlé Pure Life maintained
good momentum around the world and drove market share gains in the
US.
Nestlé Nutrition: sales of CHF 5.0 billion, 1.5% organic growth and
-2.4% real internal growth. The EBIT margin decreased by 110 basis
points, reflecting upfront investments in media campaigns and
increased support for the accelerating NaturNes launch in Europe. All
divisions accelerated during the first half from their first quarter
performance. The infant nutrition business showed signs of improving
momentum in Europe and the US during the period, and maintained good
organic growth in Latin America, Asia, Oceania and Africa, supported
by a strong innovation and renovation pipeline.
Other Food and Beverages: sales of CHF 4.9 billion, 6.1% organic
growth and 2.4% real internal growth. The EBIT margin increased by 20
basis points due to growth leverage and operational efficiencies.
Cereal Partners Worldwide and Nespresso continued to perform well.
Nestlé Professional was affected by a softer out-of-home market in
developed countries but delivered strong performances in many
emerging markets such as Greater China, Philippines and the Middle
East, resulting in virtually flat organic growth.
Pharma: sales of CHF 4.0 billion, 5.0% organic growth and 5.1% real
internal growth. The EBIT margin improved by 80 basis points, mainly
due to growth, operational efficiencies and a positive product mix.
Sales and EBIT margin by product
+-------------------------------------------------------------------+
| | Jan.-June | Jan.-June | EBIT margins |
|-----------------| 2009 Sales | 2009 |-----------------------|
| | in CHF | Organic | Jan.-June | Change vs |
| | millions | Growth (%) | 2009 | Jan.-June |
| | | | | 2008 |
|-----------------+------------+------------+-----------+-----------|
| Powdered and | 9 242 | + 9.7 | 21.8% | -110 bps |
| liquid | | | | |
| beverages | | | | |
|-----------------+------------+------------+-----------+-----------|
| Water | 4 726 | - 2.9 | 8.3% | +110 bps |
|-----------------+------------+------------+-----------+-----------|
| Milk products | 9 628 | 0.0 | 11.0% | -20 bps |
| and ice cream | | | | |
|-----------------+------------+------------+-----------+-----------|
| Nutrition | 4 997 | + 1.5 | 17.4% | -110 bps |
|-----------------+------------+------------+-----------+-----------|
| Prepared dishes | 8 221 | + 1.0 | 12.2% | +90 bps |
| and cooking | | | | |
| aids | | | | |
|-----------------+------------+------------+-----------+-----------|
| Confectionery | 5 118 | + 4.3 | 11.3% | +60 bps |
|-----------------+------------+------------+-----------+-----------|
| PetCare | 6 381 | + 9.1 | 15.7% | +120 bps |
|-----------------+------------+------------+-----------+-----------|
| Total Food & | 48 313 | + 3.4 | 12.4% | +10 bps |
| Beverages | | | | |
|-----------------+------------+------------+-----------+-----------|
| Pharmaceutical | 3 954 | + 5.0 | 34.6% | +80 bps |
| products | | | | |
|-----------------+------------+------------+-----------+-----------|
| Group Total | 52 267 | + 3.5 | 14.1% | +30 bps |
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All calculations based on non-rounded figures
The slight difference in the figures for water and nutrition between
the "Sales by operating segment" and "Sales by product" tables is due
to the fact that some water and nutrition products are also sold by
management segments other than Nestlé Waters and Nestlé Nutrition.
Powdered and liquid beverages: sales of CHF 9.2 billion, 9.7% organic
growth and 4.7% real internal growth. The EBIT margin declined by 110
basis points, mainly due to the increased support for the enlarged
Nescafé Dolce Gusto roll-out and raw material cost pressures. The
strong growth confirms the dynamism of Nestlé's billionaire brands
Nescafé, Nesquik, Nespresso, Milo and Nestea. These brands benefited
from a strong pipeline of new products, ranging from PPP offerings to
super-premium. The successful roll-out of Nescafé Dolce Gusto
continued and allowed Nestlé to increase its market share in the
fast-growing portioned coffee segment. Nespresso continued its
outstanding performance with organic growth over 25%. Overall, the
product segment achieved double-digit growth in Eastern Europe, the
Americas, Asia, Oceania, the Middle East and Africa.
Milk products and ice cream: sales of CHF 9.6 billion, 0% organic
growth and -1.3% real internal growth. The EBIT margin declined by 20
basis points due to lower pricing in ambient dairy in anticipation of
falling raw material costs. The EBIT margin in ice cream increased
due to efficiencies and the exit from underperforming markets. There
were the first signs of a pick up in consumer demand for ambient
dairy in emerging markets after the high prices seen in 2008. Ice
cream's organic growth improved over the first half of 2009 thanks to
innovations such as Häagen Dazs 5 in North America and the successful
launch of Nestlé Extrême all natural in Switzerland.
Prepared dishes and cooking aids: sales of CHF 8.2 billion, 1.0%
organic growth and 0% real internal growth. The EBIT margin improved
by 90 basis points due to product range rationalisation. Maggi
achieved double-digit organic growth in Africa, Asia and Eastern
Europe. In the US, Hot Pockets, Stouffer's and Lean Cuisine frozen
prepared meals delivered a good first half performance. In Europe,
frozen prepared meals were weak while the pizza business continued to
perform well.
Confectionery: sales of CHF 5.1 billion, 4.3% organic growth and
-1.3% real internal growth. The EBIT margin increased by 60 basis
points due to efficiencies and product lines streamlining. Kit Kat
continued its excellent performance with strong organic growth and
market share gains. The UK business continued to perform well with
its focus on its seven key brands, as did the US. Overall, the
emerging markets in Asia, Africa, the Middle East and Latin America
continued to deliver strong organic growth.
PetCare: sales of CHF 6.4 billion, 9.1% organic growth and 2.7% real
internal growth. The EBIT margin increased by 120 basis points due to
continued growth of high value-added strategic brands, together with
pricing to offset input cost pressures. The global petcare business'
excellent performance was driven by resilient demand for key premium
and super premium brands such as One, Beneful, Cat Chow, Pro Plan and
Friskies.
Outlook
Nestlé's first half performance of 3.5% organic growth combined with
a 30 basis points EBIT margin improvement reflects the Group's
strength in challenging times while making it fitter for the future.
Indeed, Nestlé's successful efficiency programmes enabled it both to
invest for growth and deliver this EBIT margin improvement. The Group
expects volume-driven organic growth to accelerate in the second half
as well as an EBIT margin improvement in constant currencies for the
full year. The Group remains committed to its strategic direction
focused on sustainable, long-term profitable growth and is well
placed to capture opportunities as economic conditions improve.
The investor call will be webcast live today at 0800 CET. An
on-demand webcast will also be available. Full details in our Events
section.
Contacts Media Robin
Tickle Tel.: +41 (0)21 924
22 00
Investors Roddy
Child-Villiers Tel.: +41 (0)21 924 36
22
--- End of Message ---
Nestlé S.A.
Avenue Nestlé 55 Vevey
WKN: 887208; ISIN:
CH0012056047; Index: SLCI, SMI, SPI, SMIEXP;
Listed: Main Market in SIX Swiss Exchange;
Copyright © Hugin AS 2009. All rights reserved.NESTLE NOM. : First half of 2009: Nestlé delivers 3.5% organic growth combined with a 30 bps EBIT margin improvement
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