Half-Year 2015: Organic growth of 4.5%, full-year outlook confirmed
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Half-Year 2015: Organic growth of 4.5%, full-year outlook confirmed
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Vevey, 13 August 2015
Half-Year 2015: Organic growth of 4.5%, full-year outlook confirmed
* Sales of CHF 42.8 billion, 4.5% organic growth, 1.7% real internal growth
* Trading operating profit margin 15.0%, up 20 basis points in constant
currencies
* Underlying earnings per share up 7.3% in constant currencies
* 2015 outlook: we aim to achieve organic growth of around 5% with
improvements in margins and underlying earnings per share in constant
currencies, and capital efficiency
Paul Bulcke, Nestlé CEO: "The first half results were in line with our
expectations, broad-based across categories and geographies, solid even in
difficult circumstances, and consistent with our strong performance over time.
They reflect the relevance and strength of our Nutrition, Health and Wellness
strategy and our discipline in execution. Our investments in the new growth
platforms Nestlé Health Science and Nestlé Skin Health are delivering and
complement the good momentum in our food and beverages businesses. This allows
us to confirm the outlook for the full year."
Group results
In the first half of 2015 organic growth was 4.5%, composed of 1.7% real
internal growth and 2.8% pricing. Total sales of CHF 42.8 billion were impacted
by foreign exchange (-5.8%). Acquisitions, net of divestitures, contributed 1%
to sales.
* Growth was broad-based across categories and geographies.
* Organic growth in the developed markets accelerated to 2.2% while in the
emerging markets we achieved strong organic growth of 7.3%.
* Organic growth was 6.6% in the Americas (AMS), 3.4% in Europe, Middle East
and North Africa (EMENA) and 2.2% in Asia, Oceania and sub-Saharan Africa
(AOA). Real internal growth was 1.7% in AMS, 2.4% in EMENA and 0.6% in AOA.
* The continuous efforts to drive cost efficiencies, and the consolidation of
Nestlé Skin Health, led to a 160 basis points drop in the cost of goods
sold. The effect from input costs was neutral.
* Cost reductions were partly reinvested in increased consumer facing
marketing support. The trading operating profit margin rose by 20 basis
points in constant currencies. Trading operating profit was CHF 6.4 billion
with a margin of 15.0%.
* Net profit was CHF 4.5 billion and reported earnings per share were CHF
1.43. Underlying earnings per share rose 7.3% in constant currencies.
* The group's operating cash flow was CHF 3.9 billion reflecting the
appreciation of the Swiss Franc, lower dividend income from L'Oréal due to
our reduced shareholding and the timing of tax payments.
Zone AMS
Sales of CHF 12.0 billion, 5.2% organic growth, 0.1% real internal growth;
18.0% trading operating profit margin, +10 basis points
* The Zone delivered good organic growth, driven by improvements in our
business in North America and positive momentum in Latin America. Nescafé
Dolce Gusto, creamers and petcare continued to be significant growth
drivers.
* In North America we relaunched our frozen meals brands with the new Lean
Cuisine Market Place and Stouffers Fit Kitchen ranges. The first signs are
promising and indicate that we are meeting the fast-changing expectations of
consumers. New additions to the Snack Bites range helped deliver solid
growth for Hot Pockets, and we saw some improvement in frozen pizza. In ice
cream, new products delivered solid growth for Haägen Dazs in super premium
and Outshine for snacks. Coffee-mate grew well, supported by innovations
like Natural Bliss and Coffee-mate 2GO. Petcare showed good growth, in spite
of the negative impact from the Beneful case. Among the drivers were Fancy
Feast cat food, the Pro Plan platform for dog food, and cat litter.
* We continued to grow our business in Latin America in what is still a
volatile environment. Investment behind our growth platforms drove
performance in Brazil. Nescafé Dolce Gusto and KitKat both delivered strong
double-digit growth, as did soluble coffee. Nescau achieved good growth for
cocoa and malt beverages while Passatempo and Nesfit did well for biscuits.
Mexico grew during the first half, led by Nescafé and Coffee-mate. Petcare
continued to be a growth driver for Latin America and will benefit from new
production capacity in Argentina and Mexico.
* The Zone's trading operating profit margin benefited from operational
efficiencies and positive pricing.
Zone EMENA
Sales of CHF 7.9 billion, 3.8% organic growth, 2.0% real internal growth; 16.2%
trading operating profit margin, +80 basis points
* After a strong start to the year the different geographies of the Zone
continued to grow in spite of the volatile and challenging environment. The
solid growth was broad-based with Nescafé Dolce Gusto, soluble coffee,
petcare and frozen pizza among the highlights. Organic growth was also
driven by price increases for coffee and some inflationary pressures in
Russia, Ukraine and Turkey, compensating for the deflationary environment in
Western Europe.
* Innovation and premiumisation continued to drive the growth in Western
Europe. Single-serve cat food, Nescafé Dolce Gusto and frozen pizza were the
main contributors. France, Benelux and the Nordics did well in the
deflationary environment. Consumer confidence in Southern Europe was
subdued, with Greece having an impact.
* Growth in Eastern Europe was strong, driven by petcare, soluble coffee and
systems, and by chocolate with KitKat. Careful management of pricing in
Russia has protected our competitiveness in an inflationary environment. Our
business in Ukraine continued to deliver growth, despite the difficult
economic situation. There were also solid performances from the Adriatic
region, Bulgaria and Hungary.
* The Middle East and North Africa region delivered solid growth with soluble
coffee and confectionery the highlights. Turkey had strong growth and there
were solid performances across the Middle East, compensating for the
challenges in Iraq and Yemen.
* The improvement in the Zone's trading operating profit margin was driven by
product mix and lower input costs that allowed for increased investment in
consumer facing marketing support.
Zone AOA
Sales of CHF 7.1 billion, 0.8% organic growth, -0.8% real internal growth;
18.2% trading operating profit margin, -60 basis points
* There were strong results in the Zone's developed markets and a gradual
improvement in emerging markets, however the underlying improvement in the
Zone's performance was overshadowed by the issue in India.
* In India, our withdrawal of Maggi noodles resulted in negative organic
growth which will continue into the second half. We are engaging fully with
the authorities as we work to relaunch the product.
* The efforts in China to adapt our product portfolio to the changing consumer
demand and the lower growth environment led to a gradual improvement across
the categories, with ambient dairy, confectionery and soluble coffee all
contributing. Ready-to-drink beverages, including Nescafé, delivered double-
digit growth and ambient culinary made a solid contribution.
* In the developed markets Japan continued to perform well thanks to
innovation in KitKat and in Nescafé which launched the premium Nescafé Gold
Blend in the ready-to-drink format. Despite the intensely competitive
trading environment in the Oceania region, the business there contributed to
the Zone's positive growth, thanks mainly to confectionery with KitKat.
* Vietnam, Indonesia, South Africa, Pakistan and the Philippines were among
the highlights in the other emerging markets, delivering good growth. Sub-
Saharan Africa continued to show good growth with Central West Africa Region
regaining momentum after a slower start to the year.
* The trading operating profit margin of Zone AOA was affected by the
withdrawal and destruction costs of the returned products in India which
have already had a material impact in the first half of the year.
Nestlé Waters
Sales of CHF 3.8 billion, 5.3% organic growth, 5.6% real internal growth; 11.5%
trading operating profit margin, +110 basis points
* Nestlé Waters delivered solid broad-based growth across both emerging and
developed markets, reflecting rising demand for healthy beverages. The
business has a strong presence across the different channels globally.
Nestlé Pure Life again delivered double-digit growth, and there was good
single-digit growth for our premium international brands, Perrier and
S.Pellegrino. The local brands also performed well with Poland Spring in the
US, Levissima in Italy, Erikli in Turkey, Al Manhal in Saudi Arabia and
Buxton in the United Kingdom all making good contributions.
* The trading operating profit margin was driven mainly by the solid organic
growth, rigorous cost management and lower input costs, allowing for
increased investment in consumer facing marketing support.
Nestlé Nutrition
Sales of CHF 5.3 billion, 3.9% organic growth, 1.3% real internal growth; 23.0%
trading operating profit margin, +140 basis points
* Nestlé Nutrition delivered growth across geographies and brands despite
difficult comparisons, especially in Asia. The well-supported innovation
pipeline continued to deliver new products for the Nido, Nan and Cerelac
brands. Wyeth Infant Nutrition delivered good growth, in particular in Asia
where the premium brands S-26 and Illuma expanded their e-commerce
footprint. The South Asia Region, Mexico and the Philippines performed well
for Nestlé Infant Nutrition. In North America innovation in our Gerber
infant cereals range continued to support growth and there were new product
launches in meals and drinks.
* The strong improvement in the trading operating profit margin was the result
of our portfolio management and underlying margin improvement along with
strict control of fixed costs and more favourable input costs. This allowed
us to increase investment behind our brands.
Other businesses
Sales of CHF 6.8 billion, 8.1% organic growth, 4.9% real internal growth; 15.8%
trading operating profit margin, -250 basis points
* Nestlé Professional is regaining growth momentum, with good acceleration in
the strategic growth platforms of culinary flavours and beverage solutions.
Emerging markets were the main drivers, particularly Latin America, Eastern
Europe, Indonesia, Turkey, and Indochina and there was good growth in our
culinary business in North America, compensating for the poor trading
environment in Western Europe.
* Nespresso continued to grow globally, capitalising on the significant
development of the portioned coffee segment. It further expanded its Grands
Crus range, opened 20 new boutiques around the world, launched a Nespresso
Café in Vienna and continued the roll-out of the Nespresso Cube, an
automated retail outlet. Also the VertuoLine system in North America
performed well.
* Nestlé Health Science delivered good growth across all regions and all three
business areas. In Consumer Care, growth was supported by new product
launches for Boost in the US, the continuation of the Meritene roll-out in
Europe and continued strong growth of Nutren in Brazil. In Medical
Nutrition, the allergy portfolio delivered good growth across all
geographies, in particular Alfamino. Novel Therapeutic Nutrition also did
well.
* Innovation drove a good performance for Nestlé Skin Health. Prescription
products achieved very good growth supported by the success of the rosacea
treatments Soolantra and Oracea and the acne treatment Epiduo. Aesthetic &
Corrective continued to do well with Restylane Skinboosters, and the launch
of Restylane Lyft in the US. The Consumer business delivered a strong
performance with Cetaphil cleanser and moisturiser, and in the US, Benzac
over-the-counter was launched.
* The trading operating profit margin was impacted by high coffee prices for
Nespresso and Nestlé Professional and there was also a dilutive impact on
the trading operating profit from the inclusion of Nestlé Skin Health in the
first half.
Outlook
The results of the first half allow us to reconfirm our outlook for the full
year: we aim to achieve organic growth of around 5% with improvements in margins
and underlying earnings per share in constant currencies, and capital
efficiency.
Contacts
Media: Robin Tickle Tel.: +41 21 924 22 00
Investors: Steffen Kindler Tel.: +41 21 924 3509
Annex
Half-year sales and trading operating profit margins overview
+----------------------+---------------+--------------+------------------------+
| | | |Trading operating profit|
| | | |margins |
| +---------------+--------------+---------+--------------+
| |Jan.-June 2015 |Jan.-June 2015|Jan.-June|Change vs |
| |Sales |Organic Growth|2015 |Jan.-June 2014|
| |in CHF millions|(%) |(%) |(*) |
| | | | | |
+----------------------+---------------+--------------+---------+--------------+
|By operating segment |
+----------------------+---------------+--------------+---------+--------------+
| | | | | |
|· Zone AMS |11'993 |+5.2 |18.0 |+10 bps |
+----------------------+---------------+--------------+---------+--------------+
|· Zone EMENA ((a)) |7'922 |+3.8 |16.2 |+80 bps |
+----------------------+---------------+--------------+---------+--------------+
|· Zone AOA |7'069 |+0.8 |18.2 |-60 bps |
+----------------------+---------------+--------------+---------+--------------+
|Nestlé Waters |3'767 |+5.3 |11.5 |+110 bps |
+----------------------+---------------+--------------+---------+--------------+
|Nestlé Nutrition |5'282 |+3.9 |23.0 |+140 bps |
+----------------------+---------------+--------------+---------+--------------+
|Other businesses ((b))|6'810 |+8.1 |15.8 |-250 bps |
+----------------------+---------------+--------------+---------+--------------+
|Total Group |42'843 |+4.5 |15.0 |0 bps |
+----------------------+---------------+--------------+---------+--------------+
|By product |
+----------------------+---------------+--------------+---------+--------------+
|Powdered and liquid |9'371 |+5.3 |22.5 |-130 bps |
|beverages | | | | |
+----------------------+---------------+--------------+---------+--------------+
|Water |3'510 |+5.5 |11.9 |+70 bps |
+----------------------+---------------+--------------+---------+--------------+
|Milk products and ice |7'191 |+0.8 |16.7 |+160 bps |
|cream | | | | |
+----------------------+---------------+--------------+---------+--------------+
|Nutrition and Health |7'346 |+7.3 |19.0 |-160 bps |
|Science ((b)) | | | | |
+----------------------+---------------+--------------+---------+--------------+
|Prepared dishes and |6'062 |+0.8 |12.1 |-60 bps |
|cooking aids | | | | |
+----------------------+---------------+--------------+---------+--------------+
|Confectionery |3'898 |+8.5 |11.1 |+50 bps |
+----------------------+---------------+--------------+---------+--------------+
|Petcare |5'465 |+4.9 |21.0 |+110 bps |
+----------------------+---------------+--------------+---------+--------------+
|Total Group |42'843 |+4.5 |15.0 |0 bps |
+----------------------+---------------+--------------+---------+--------------+
(*) 2014 figures have been restated on the following main transfers, effective
as from 1 January 2015:
- the Maghreb, the Middle East, the North East Africa region, Turkey and Israel
in Zone Asia, Oceania and
Africa to Zone Europe;
- Growing-Up Milks business in the geographic Zones to Nestlé Nutrition;
- Bübchen business in Nestlé Nutrition to Other businesses.
a) Renamed following the above mentioned reorganisation.
b) Renamed following the creation of Nestlé Skin Health as from July 2014.
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Unternehmensinformation / Kurzprofil:
Datum: 13.08.2015 - 07:15 Uhr
Sprache: Deutsch
News-ID 413370
Anzahl Zeichen: 20650
contact information:
Town:
Vevey
Kategorie:
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