Nestlé, the largest food and beverage company in the world, has announced financial results at group level for 2021, reporting an organic growth of 7.5%, driven by a growing mix of market shares, the recovery of the out-of-home sector and positive retail dynamics.
- Organic growth reached 7.5%, with real internal growth (RIG) of 5.5% and pricing of 2.0%. Growth was supported by continued momentum in retail sales, steady recovery of out-of-home channels, increased pricing and market share gains.
- Total reported sales increased by 3.3% to CHF 87.1 billion (2020: CHF 84.3 billion). Foreign exchange reduced sales by 1.3%. Net divestitures had a negative impact of 2.9%.
- Underlying earnings per share increased by 5.8% in constant currency. Board proposes a dividend of CHF 2.80 per share, an increase of 5 centimes, marking 27 consecutive years of dividend growth. In total, CHF 13.9 billion were returned to shareholders in 2021 through a combination of dividend and share buybacks.
- 2022 outlook:we expect organic sales growth around 5%.
- Mid-term outlook:sustained mid single-digit organic sales growth.
Mark Schneider, Nestlé CEO, commented:“In 2021, we remained focused on executing our long-term strategy and stepping up growth investments, while at the same time navigating global supply chain challenges. Our organic growth was strong, with broad-based market share gains, following disciplined execution, rapid innovation and increased digitalization. The entire Nestlé team demonstrated exemplary perseverance and agility in a challenging environment. Our sustainability agenda further progressed as we enhance the well-being of our consumers, help regenerate the environment and strengthen the farming communities in our supply chains. Going forward, we are confident in the strength of our value creation model.”
Zone Europe, Middle East and North Africa (EMENA)
- 2% organic growth: 6.0% RIG; 1.2% pricing.
- Western Europe saw mid single-digit organic growth with strong RIG and slightly positive pricing.
- Central and Eastern Europe posted double-digit organic growth, with strong RIG and positive pricing.
- Middle East, North Africa, Turkey and Israel reported high single-digit organic growth, with a balanced contribution from RIG and pricing.
- The underlying trading operating profit margin decreased by 10 basis points to 18.5%.
Organic growth reached 7.2%, with strong RIG of 6.0% supported by volume and mix. Pricing increased by 1.2%, with 2.5% pricing in the fourth quarter. Net divestitures reduced sales by 2.2%, largely related to the divestiture of the Herta charcuterie business partly offset by the acquisitions of Mindful Chef and Lily’s Kitchen. Foreign exchange negatively impacted sales by 0.6%. Reported sales in Zone EMENA increased by 4.5% to CHF 21.1 billion.
Zone EMENA reported high single-digit organic growth, reaching the highest level in the last decade. Growth was supported by continued evolution of the portfolio toward fast-growing categories and channels, as well as innovation. All markets posted positive growth, with strong sales developments led by the United Kingdom, Russia, Italy and France. The Zone continued to see broad-based market share gains, particularly for pet food, coffee, ambient and chilled culinary.
By product category, PURINA® PetCare posted double-digit growth led by premium brands GOURMET®, Felix and PURINA® Pro Plan, as well as veterinary products. Growth was strong across all channels, particularly in e-commerce and pet specialty stores. Sales in new growth platforms Tails.com, Lily’s Kitchen and Terra Canis combined increased by close to 40%. Sales in coffee grew at a high single-digit rate, supported by strong momentum for NESCAFÉ and Starbucks at-home products. Nestlé Professional reported strong double-digit growth, helped by further recovery in out-of-home channels, with particular strength in coffee. Water posted high single-digit growth, led by S.Pellegrino as well as Nestlé Pure Life in the Middle East and North Africa. Sales in confectionery grew at a mid single-digit rate, led by KitKat®. Culinary reported low single-digit growth, with a high base of comparison for Maggi. Sales in Garden GOURMET® and Mindful Chef continued to grow at a double-digit rate. GARDEN GOURMET® Vuna, the recently launched plant-based tuna alternative, saw strong demand. Infant Nutrition posted positive growth, with continued market share gains, despite lower birth rates in the context of the pandemic. The Zone’s underlying trading operating profit margin decreased by 10 basis points. Cost inflation and increased growth investments more than offset operating leverage and product mix.
In Romania, the financial results for 2021 were in line with those obtained globally, with an organic growth of 10.5% supported by the diversity of the local portfolio. especially by the categories of coffee for consumption at home and in the out-of-home sector, as well as pet food. In the context of the pandemic, Nestlé continued to support the fight against COVID-19, and contributed with donations in products totaling over CHF 300,000 to communities in need in Romania.
“The year 2021 was an anniversary year for us and we wanted to celebrate it together with our colleagues, our partners and, of course, with our consumers, who determined us to be better and better in these years and to always bring quality, innovative and sustainable products to the market. Despite the context, we have set out to adapt quickly to market changes, to be more agile and resilient. We have launched over 30 new products in all 10 categories we have in Romania. We continued the CSR projects under the three pillars, healthy nutrition, environment and opporunities for youth development, but we also came up with a contest-project of ideas to support Romania’s restart after the pandemic, excellent ideas that will be put into practice this year. In 2022, we continue our commitment to our community and consumers in Romania and follow our regenerative journey”, stated Silvia Sticlea, Country Manager Nestlé România.