Coronavirus Update

Nestle Plc - Nine-Month Sales Report + Changes to Water Business



1) Nestlé reports nine-month sales for 2019

  •  Organic growth of 3.7%, with real internal growth (RIG) of 3.0% and pricing of 0.7%. Growth was supported by strong momentum in the United States and Purina PetCare.
  • Total reported sales increased by 2.9% to CHF 68.4 billion (9M-2018: CHF 66.4 billion). Net acquisitions had a positive impact of 0.7% and foreign exchange reduced sales by 1.5%.
  • Portfolio management fully on track. The sale of Nestlé Skin Health for CHF 10.2 billion was completed on October 1, 2019. The strategic review of the Herta charcuterie business is ongoing and expected to be completed by the end of the year.
  • Nestlé's Board of Directors has decided to distribute an amount of up to CHF 20 billion to Nestlé shareholders over the period 2020 to 2022, primarily in the form of share buybacks.
  • Full-year guidance for 2019 confirmed. We expect organic sales growth around 3.5% and the full-year underlying trading operating profit margin at or above 17.5%. Underlying earnings per share in constant currency and capital efficiency are expected to increase.


Mark Schneider, Nestlé CEO:  

"We are pleased with our nine-month results and have made further progress towards our 2020 financial goals. We continue to see good momentum in our largest market, the United States and very strong growth for Purina PetCare globally. Nestlé's growth was supported by investment behind our brands, rapid innovation and disciplined execution. During the third quarter, the roll-out of Starbucks products continued, now reaching 34 countries. Our portfolio transformation is fully on track, as shown by the timely completion of the Nestlé Skin Health disposal. With prudent investments and a disciplined approach to acquisitions our value creation model is generating profitable growth and attractive cash returns for our shareholders."



 2) Nestlé announces changes to its waters business, establishes Group Strategy and Business Development function

The Nestlé Board of Directors has decided to integrate the Nestlé Waters business into the Group's three geographical Zones, effective January 1, 2020. A dedicated Strategic Business Unit (SBU) will be created and report to Patrice Bula, member of the Executive Board and Head of Strategic Business Units, Marketing & Sales. The new Waters SBU will ensure strategic alignment globally and manage core global functions.

This move, subject to employee consultation where required, will help utilize Nestlé's strong local expertise, better respond to rapidly changing consumer preferences, accelerate profitable growth and create synergies.

Nestlé created Nestlé Waters in 1992, following the acquisition of Source Perrier S.A. The business saw a rapid and successful international expansion to become the world's leading bottled water company. It now has almost 50 renowned and iconic brands, such as S.Pellegrino, Perrier, Poland Spring and Nestlé Pure Life. With their quality and taste, these products offer a convenient and safe way to drink water and hydrate at every occasion. The waters business is an integral part of Nestlé's nutrition, health and wellness strategy and is one of the company's high-growth product categories.


Nestlé also announces changes to its Executive Board:

Maurizio Patarnello, Deputy Executive Vice President and Head of Nestlé Waters, will leave the Nestlé Executive Board on December 31, 2019. He will continue to advise Nestlé Waters in order to ensure a smooth transition to the new organizational structure. Maurizio has a genuine passion for Nestlé Waters' iconic brands and has overseen the launch of innovative products that meet new consumer trends. The Board of Directors and the Executive Board express their sincere gratitude and appreciation to Maurizio for his leadership at Nestlé Waters.

The Nestlé Board of Directors has appointed Sanjay Bahadur, currently Head of Acquisitions and Business Development, to the Executive Board as Deputy Executive Vice President, effective January 1, 2020. Sanjay will head the newly created Group Strategy and Business Development function, which will support Nestlé in identifying internal and external strategic growth opportunities. The new function will also manage external partnerships and licensing agreements for the Nestlé Group and oversee the company's corporate venture capital activities. Sanjay joined Nestlé in June 1982. He has extensive market experience having worked in India, Switzerland, Hong Kong, Turkey and China. He was CFO for the Greater China Region prior to assuming his role as Head of Acquisitions and Business Development.