VEVEY, Switzerland – Nestlé reported today its three-month sales for Q1 2021. Most product categories delivered strong organic growth. Coffee was the largest contributor to growth, fueled by strong demand for Nespresso, Nescafé and Starbucks products. Organic growth reached 7.7%, with real internal growth (RIG) of 6.4% and pricing of 1.2%. Growth was broad-based across most geographies, supported by early signs of recovery from out-of-home channels, improved pricing and market share gains (CHF1 = $1.0911).
Foreign exchange reduced sales by 5.3% due to the continued appreciation of the Swiss franc against most currencies. Net divestitures had a negative impact of 1.0%. As a result, total reported sales increased by 1.3% to CHF 21.1 billion (3M-2020: CHF 20.8 billion).
The sale of Nestlé’s regional spring water brands, purified water business and beverage delivery service in the U.S. and Canada was completed on March 31, 2021. The acquisition of Essentia Water was completed on March 5, 2021.
Full-year 2021 outlook confirmed: continued increase in organic sales growth towards a mid single-digit rate. Underlying trading operating profit margin with continued moderate improvement. Underlying earnings per share in constant currency and capital efficiency expected to increase.
Organic growth reached 17.1%, based on strong RIG of 16.3% and pricing of 0.8%. Foreign exchange negatively impacted sales by 1.4%. Reported sales in Nespresso increased by 15.6% to CHF 1.6 billion.
Nespresso reported double-digit organic growth, reflecting continued expansion of the Vertuo system and strong demand for the Original system. Growth was fueled by continued strong momentum in e-commerce and innovation. New products included the expansion of the World Explorations range, including Buenos Aires and Shanghai, and new limited editions in the Master Origins range, and a new Master Origins offering, Nicaragua La Cumplida Refinada.
By geography, the Americas, EMENA and AOA all posted double-digit growth. North America was the strongest contributor to growth and continued to gain market share.
In March, Nespresso announced a CHF 117 million investment in the expansion of its Avenches production and distribution center in Switzerland to meet growing consumer demand worldwide.
Mark Schneider, Nestlé CEO, commented:
“We are pleased with Nestlé’s strong organic sales growth in the first quarter, building on broad-based contributions from most geographies and product categories. Our growth was fueled by disciplined execution, enhanced digital capabilities and rapid innovation, resulting in further market share gains. Retail sales saw solid growth and out-of-home channels saw signs of improvement. We confirm our guidance for the year and our mid-term outlook for sustained mid single-digit organic growth.
The development of COVID-19 vaccines has given the world hope and we are supporting the broad and equitable delivery of vaccines in the communities where we operate. Our partnership with the International Federation of the Red Cross and Red Crescent Societies is helping to get vaccines to those who need them most. In these challenging times, we can truly demonstrate how business can act as a force for good and help accelerate the recovery.”
Nestlé: Full-year 2021 outlook confirmed
Continued increase in organic sales growth towards a mid single-digit rate. Underlying trading operating profit margin with continued moderate improvement. Underlying earnings per share in constant currency and capital efficiency expected to increase.