Press Release: Nestle: Solid 2024 performance; -4-

We achieved solid organic sales growth in Zone AOA, with most categories and regions reporting positive RIG. We improved market share trends, particularly for key global brands like KitKat, reignited growth momentum in PetCare and significantly stepped up e-commerce growth. Several macroeconomic headwinds weighed on growth, with consumer hesitancy towards global brands linked to geopolitical tensions persisting throughout the year. In the fourth quarter, we took action to reduce customer inventories in our infant nutrition and dairy categories. For the year, UTOP margin declined, driven by increased investment in advertising and marketing.

Segment performance summary

-- Organic growth was 3.4%, with 0.6% RIG and 2.8% pricing.

-- Reported sales decreased by 4.1% to CHF 16.8 billion, strongly impacted

by foreign exchange movements, which reduced sales by 7.5%.

-- Key markets driving growth were Central and West Africa, the Middle East

and North Africa, and the Philippines.

-- Key market share developments were gains in PetCare and losses in dairy

and culinary.

-- UTOP margin decreased by 20 basis points to 23.3%, driven by increased

investment in advertising and marketing.

Key sales growth drivers by product category

-- Coffee posted mid single-digit growth, driven by Nescafé soluble and

ready-to-drink offerings.

-- Culinary delivered high single-digit growth fueled by strong sales

momentum for Maggi.

-- Nestlé Professional achieved high single-digit growth, with strong

contributions from most geographies and categories.

-- Confectionery grew at a mid single-digit pace, driven by KitKat and

supported by new product launches.

-- PetCare achieved high single-digit growth, led by key brands Felix and

Purina ONE.

-- Infant Nutrition posted low single-digit growth following actions to

reduce customer inventories.

-- Dairy saw a sales decline, impacted by the introduction of a sales tax in

Pakistan as well as actions to reduce customer inventories and reshape

the portfolio.

Zone Latin America

Sales growth in Zone Latin America was pricing-led growth, with RIG declining slightly. During the year, consumer demand softened and financial pressure on customers increased in several markets due to higher borrowing costs. These headwinds led to actions to reduce customer inventories, which weighed on RIG in Q3. Improved growth in Q4 was driven by confectionery and coffee, with new price increase measures being taken in both categories. UTOP margin for the year declined due to increased investments in growth as well as higher costs linked to the acquisition of the Grupo CRM confectionery business.

Segment performance summary

-- Organic growth was 2.5%, with -0.3% RIG and 2.7% pricing.

-- Reported sales decreased by 2.2% to CHF 11.9 billion, with a negative

impact of 4.9% from foreign exchange movements.

-- Key markets driving growth were Brazil and Mexico; weaker performance in

smaller markets such as Peru and Colombia.

-- Market share developments included gains in portioned coffee and culinary,

with losses in dairy and soluble coffee.

-- UTOP margin decreased by 30 basis points to 20.4%. The reduction follows

increased advertising and marketing investments.

Key sales growth drivers by product category

-- Confectionery delivered high single-digit growth, driven by key local

brands, particularly Garoto, and supported by new product launches in

chocobakery.

-- Nestlé Professional grew at a double-digit pace, underpinned by

customer acquisition.

-- Coffee saw mid single-digit growth, led by Nescafé, with strong

growth for Nescafé Dolce Gusto.

-- Culinary reported low single-digit growth supported by strong sales

momentum for Maggi.

-- PetCare posted flat growth, supported by Felix and Friskies.

-- Infant Nutrition and dairy reported sales declines as robust demand for

NAN infant formula was more than offset by a sales decline in Nido.

Zone Greater China

In Zone Greater China, growth was underpinned by positive RIG delivery in every quarter despite soft consumer demand and intense price competition in several categories. This performance was achieved by driving faster innovation in key categories and adapting route-to-market and channel strategies to capture new growth opportunities. The decline in UTOP margin reflects increased commodity costs and higher growth investments.

Segment performance summary

-- Organic growth was 2.1%, with 4.3% RIG and -2.1% pricing.

-- Reported sales decreased by 1.3% to CHF 5.0 billion, as foreign exchange

reduced sales by 3.5%.

-- Market share developments included gains in Infant Nutrition and

confectionery, with losses in culinary and dairy.

-- UTOP margin decreased by 40 basis points to 16.1%, reflecting higher

input costs and increased advertising and marketing investments.

Key sales growth drivers by product category

-- Infant Nutrition was the largest contributor to organic growth, with high

single-digit growth, driven by NAN and supported by improved sales

momentum for illuma.

-- Coffee posted mid single-digit growth, driven by distribution expansion

and new innovations, particularly in Nescafé ready-to-drink

offerings.

-- Confectionery grew at a mid single-digit rate, with solid growth for Hsu

Fu Chi and Shark Wafer, supported by new product launches and e-commerce

growth.

-- Nestlé Professional delivered low single-digit growth in challenging

market conditions, while culinary and dairy-related categories reported

negative growth.

Nestlé Health Science

Nestlé Health Science delivered a significant step-up in growth and margin in 2024, with all segments contributing to the improved performance. Organic growth recovered through the year, with double-digit growth in the second half. A key driver of the improved performance was the resolution of supply constraints for our U.S. vitamins, minerals and supplements (VMS) business. UTOP margin increased strongly, driven by growth leverage, mix improvement and cost efficiencies.

Segment performance summary

-- Organic growth was 6.2%, with 5.5% RIG and 0.7% pricing.

-- Reported sales increased by 3.7% to CHF 6.7 billion, including a foreign

exchange impact reducing sales by -2.8%.

-- Market share increased in Medical Nutrition and stabilized in VMS after

declining in the second half of 2023.

-- UTOP margin improved by 200 basis points to 14.0%. The increase was

driven by growth leverage, mix improvement and cost efficiencies.

Key sales growth drivers

-- By geography, North America posted mid single-digit growth, Europe

delivered double-digit growth and other regions combined saw positive

growth.

-- VMS achieved mid single-digit growth, with double-digit growth in the

second half and an improvement in market share trends.

-- Active Nutrition posted mid single-digit growth, supported by strong

momentum for Orgain, Vital Proteins and healthy aging products.

-- Medical Nutrition delivered double-digit growth, with continued market

share gains. Growth was driven by strong sales momentum for adult medical

care products, particularly Peptamen and Resource, as well as Vitaflo.

Sales for gastrointestinal products continued to grow at a double-digit

rate.

Nespresso

Nespresso delivered solid RIG-led growth, driven by the continued rollout of Vertuo, particularly in the U.S. and continued good growth in out-of-home channels. Q4 saw the highest quarterly growth of the year, supported by strong seasonal campaigns and the impact of pricing actions. UTOP margin decreased as we invested behind the expansion of Vertuo and structural costs increased.

Segment performance summary

-- Organic growth was 2.2%, with 1.6% RIG and 0.6% pricing.

-- Reported sales increased by 0.1% to CHF 6.4 billion, including -2.4%

impact from foreign exchange movements.

-- We achieved market share gains in the U.S., but lost some share in

Europe.

-- UTOP margin was down 30 bps to 20.0%, driven by increased advertising and

marketing investments as well as higher structural costs.

Key sales growth drivers

-- By geography, sales in North America grew at a mid single-digit rate with

continued market share gains. In Europe, sales posted close to flat

growth.

-- By system, growth was driven by the Vertuo system, with strong sales

momentum across all geographies. Sales for out-of-home channels grew at a

mid single-digit rate backed by the continued rollout of the Momento

system.

Annex

Full-year sales and underlying trading operating profit (UTOP) overview by product

Milk Prepared

Powdered products Nutrition dishes &

Total & liquid & ice & Health cooking

Group beverages Water cream Science aids Confec-tionery PetCare

Sales

FY-2024

(CHF m) 91 354 24 598 3 180 10 397 15 137 10 711 8 449 18 882

Sales

FY-2023

(CHF m) 92 998 24 786 3 320 10 981 15 278 11 666 8 107 18 860

Real

internal

growth

(RIG) 0.8% 1.6% - 1.0% - 0.7% 1.9% - 2.2% - 0.2% 2.1%

Pricing 1.5% 1.7% 3.2% 0.1% 0.9% 0.5% 6.4% 0.6%

Organic

growth 2.2% 3.3% 2.3% - 0.6% 2.8% - 1.7% 6.2% 2.7%

FY-2024

Underlying

TOP (CHF

m) 15 704 4 920 297 2 442 3 006 2 137 1 299 4 087

FY-2023

Underlying

TOP (CHF

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February 13, 2025 01:00 ET (06:00 GMT)