SWITZERLAND – Swiss food manufacturing giant Nestlé has posted a 7.5% growth in organic sales for the 2021 financial year mainly driven by continued momentum in retail sales, steady recovery of out-of-home channels, increased pricing and market share gains.
According to Nestlé , growth was broad-based across most geographies and categories with developed markets posting a growth of 7.2%, the highest level in more than a decade, and emerging markets seeing growths of 7.8% mainly driven by robust RIG and positive pricing.
Total reported sales increased by 3.3% to CHF 87.1 billion (US$94.50bn) despite impact from foreign exchange and net divestitures.
Foreign exchange reduced sales by 1.3% while net divestitures had an impact of 2.9%, largely related to the Nestlé Waters North America, Yinlu and Herta transactions.
Divestitures were partially offset by acquisitions, including the core brands of The Bountiful Company and Freshly.
Nestlé’s underlying trading operating profit increased by 1.4% to CHF 15.1 billion (US$16.38bn) while Net profit grew by 38.2% to CHF 16.9 billion.
Coffee drives organic growth
By product category, the largest contributor to organic growth was coffee, fueled by strong momentum for the three main brands Nescafé, Nespresso and Starbucks.
Purina PetCare posted double-digit growth, led by science-based and premium brands Purina Pro Plan, Fancy Feast and Purina ONE, as well as veterinary products.
Prepared dishes and cooking aids reported high single-digit growth while sales in vegetarian and plant-based food grew at a double-digit rate, reaching around CHF 800 million (US$868m).
Nestlé Health Science recorded double-digit growth, reflecting strong demand for vitamins, minerals and supplements, as well as healthy-aging products.
Zone Americas outshines others in 2021
Zone America delivered the highest growth (8.5%) during the 2021 financial year mainly driven by increased pricing, continued innovation, strong momentum in e-commerce and a further recovery of out-of-home channels.
Zone Europe, Middle East and North Africa (EMENA) came in second with organic growth of 7.2% which Nestlé attributed to continued evolution of the portfolio toward fast-growing categories and channels, as well as innovation.
Zone Asia, Oceania, and sub-Saharan Africa (AOA) came in last with an organic growth of 4.2%, largely impacted by divestitures of the Yinlu peanut milk and canned rice porridge businesses in China.
As of January 1, 2022, the company is organized into five Zones: Zone North America, Zone Latin America, Zone Europe, Zone Asia, Oceania and Africa, and Zone Greater China.
Nestlé says it will report the sales and growth numbers of the new Zone structure for the first time on April 21, 2022.
A cautious 2022 outlook
Nestlé, just like other consumer goods companies, has been grappling with a surge in costs for commodities, energy, transport and labour.
The company says it expects organic sales to grow around 5% while maintaining an underlying trading operating profit margin between 17.0% and 17.5% in 2022.
The maker of KitKat chocolate and Milo chocolate-flavored malted beverage also said it expected organic sales to grow 4-6% over the medium term.
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