Press Release: Nestle: Solid 2024 performance; executing on plan to accelerate growth

[Ad hoc announcement pursuant to Art. 53 LR]

Solid 2024 performance; executing on plan to accelerate growth

Laurent Freixe, Nestlé CEO commented: "In a challenging macroeconomic context and soft consumer environment, we achieved a solid performance in 2024 in line with our latest guidance. Organic growth was 2.2%, with a return to positive real internal growth of 0.8%, and both strengthened in the second half. Free cash flow improved to CHF 10.7 billion, and the Board proposes an increase in the dividend per share to CHF 3.05.

We have a clear roadmap to accelerate performance and transform for the future. Increasing investment to drive growth is central to our plan. This means delivering superior product taste and quality with unbeatable value, scaling our winning platforms and brands, accelerating the rollout of our innovation 'big bets' and addressing underperformers. We are creating the fuel for these growth investments through our new CHF 2.5 billion three-year cost savings program. We are making good progress and have already secured over CHF 300 million of these savings for 2025.

From 2025, we expect our actions to drive an improvement in organic sales growth, with a lower underlying trading operating profit margin in the short term as we invest for growth. While there is macroeconomic uncertainty, we have lots of opportunities ahead of us, and we have the strategy, the resources and the people and team to deliver."

In millions of CHF 2024 2023 Reported change

- Real internal growth (RIG) 0.8% - 0.3%

- Pricing 1.5% 7.5%

Organic growth 2.2% 7.2%

Net acquisitions/(disposals) - 0.3% - 0.9%

Foreign exchange movements - 3.7% - 7.8%

Reported sales growth - 1.8% - 1.5%

Sales 91,354 92,998 - 1.8%

Underlying trading operating profit 15,704 16,053 - 2.2%

Gross profit margin 46.7% 45.9% 80 bps

Underlying trading operating profit margin 17.2% 17.3% - 10 bps

Net profit(1) 10,884 11,209 - 2.9%

Basic EPS 4.19 4.24 - 1.0%

Underlying EPS 4.77 4.80 - 0.8%

Dividend per share (proposed for 2024) 3.05 3.00 1.7%

Free cash flow 10,666 10,403 2.5%

(1) Profit for the year attributable to shareholders of the parent

Financial highlights

Broad-based organic growth despite soft consumer demand, with a return to positive RIG

-- Organic sales growth of 2.2%, with real internal growth (RIG) of 0.8% and

pricing of 1.5%.

-- Growth strengthened during the year; organic growth was 2.1% in H1 and

2.3% in H2, with RIG improving from 0.1% in H1 to 1.4% in H2.

-- Growth was led by coffee, confectionery and PetCare; by geography, growth

was driven by emerging markets and Europe.

Margin in line with latest guidance, reflecting input cost increases and growth investments

-- Underlying trading operating profit (UTOP) margin of 17.2%, down 10 basis

points (bps) on a reported basis and flat in constant currency, with

improved gross profit margin and a 40 bps increase in marketing

investment.

-- Net profit down 2.9% to CHF 10.9 billion, basic EPS down 1.0% to CHF

4.19, with declines due to adverse foreign exchange movements.

-- Underlying EPS CHF 4.77, up 2.5% in constant currency, driven by modest

UTOP growth and lower share count, partly offset by increased financing

costs.

Strong free cash flow generation, continued dividend per share growth

-- Free cash flow improved to CHF 10.7 billion; proposed dividend per share

(DPS) increased to CHF 3.05.

Operational and strategic progress and outlook

Organizational changes implemented to increase simplicity and strengthen accountability

-- Reduction in geographic reporting segments from 5 Zones to 3 Zones;

Nestlé Waters and premium beverages now a standalone global

business.

-- Renewed performance management framework and incentive plans to increase

alignment.

CHF 2.5 billion cost savings program launched, with first results already achieved

-- Fuel for Growth cost savings in 2025 expected to be CHF 0.7 billion,

reaching CHF 2.5 billion by the end of 2027.

-- Over CHF 300 million savings for 2025 already secured from actions taken

since Q4 2024.

Plan to drive growth through increased investment and better execution

-- As laid out at the recent Capital Markets Day, clear focus on

accelerating category growth and improving market share performance in

2025 and over the medium term.

-- Action plans now developed for 18 key underperforming business cells,

which represent 21% of sales; execution is progressing, with early signs

of improvement in some cells.

-- Growth investments stepping up, including an increase in advertising and

marketing to 9% of sales by the end of 2025.

-- Innovation now focused to drive greater impact, with six 'big bets' for

2025 benefiting from accelerated global rollout plans.

2025 outlook unchanged

-- Guidance in line with previous outlook, as accelerated delivery of cost

efficiencies offsets recent increases in key commodity prices.

-- Organic sales growth expected to improve compared to 2024, strengthening

through the year as we continue to deliver on our growth plans.

-- UTOP margin expected to be at or above 16.0% as we invest for growth.

-- Guidance assumes no significant change in key macroeconomic variables.

Follow today's events live

09:00 CET Press conference webcast https://www.globenewswire.com/Tracker?data=qiYY3Z6LvCRJmlt89u-sU6yTm2URm_hjDC7GIFUBdy0wlruxm9ExjZbVRtH-lTqPwUH3XK-QFGyA_1-ZG6A4w9iAYPRyagbECgyEPgg0GwsJx8PddrdQxOVjg5Uqn1_bmpLiQ8Qu3DJhVLvQcsl-TEbc2R43foE4TLBQjVCRSu4=

10:30 CET Analyst & Investor call webcast https://www.globenewswire.com/Tracker?data=VyDi4crQ5GafK9NS1CzgM51IAWdYFhRWhgImMZu8S-EH9HSocAWlvihyDGs0V4Z07OC_hKk74V4wsWPEWG9fC6HkdOVW5dK75RqBjzhVyKD0nGHyvJ6dDPvh1NVoNg9cvsx0IXGEfnIFNTsAHDQDAloyJcE5uc5qJrtGQeVR-E3P4QN4hfmx504klcNIfun3

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PDF press releases:

-- English (pdf):

https://www.nestle.com/sites/default/files/2025-02/full-year-results-press-release-2024-en.pdf

-- Français (pdf):

https://www.nestle.com/sites/default/files/2025-02/full-year-results-press-release-2024-fr.pdf

-- Deutsch (pdf):

https://www.nestle.com/sites/default/files/2025-02/full-year-results-press-release-2024-de.pdf

Other reports published today:

-- Financial Statement 2024 (pdf):

https://www.nestle.com/sites/default/files/2025-02/2024-financial-statements-en.pdf

-- Annual Review 2024 (pdf):

https://www.nestle.com/sites/default/files/2025-02/annual-review-2024-en.pdf

-- Corporate Governance Report 2024 (pdf):

https://www.nestle.com/sites/default/files/2025-02/corp-governance-report-2024-en.pdf

-- Non-Financial Statement 2024 (pdf):

https://www.nestle.com/sites/default/files/2025-02/non-financial-statement-2024.pdf

-- Creating Shared Value at Nestlé 2024 (pdf):

https://www.nestle.com/sites/default/files/2025-02/creating-shared-value-nestle-2024.pdf

-- Other language versions available in Publications

https://www.nestle.com/investors/publications

Contacts:

Investors:

David Hancock Tel.: +41 21 924 3509

ir@nestle.com https://www.globenewswire.com/Tracker?data=f2jj40T0vwmaVp1sTQnMTAOO_tPS6Y7aSieM3ZcLBKzq5aR489GVUQJDDSw2cH1OGZXNyyFWmHJXJDFswNC-xw==

Media:

Christoph Meier Tel.: +41 21 924 2200

mediarelations@nestle.com https://www.globenewswire.com/Tracker?data=ZTpEVkliF6XP_V2-MvN1Sxw6n1oAVFb1NJf17a8_NU2XsmixCCTe3OvD5cjDwgO52yA48wD7I4JItJm1jNwiMmE8_3zHfeUgywwVlsfJaDbPXBsPfs-GRIxRxSiO0k0X

Operating and strategic review and outlook

Growth and investment

In 2024, organic growth was 2.2%, with pricing of 1.5% and RIG of 0.8%. This return to positive RIG came despite soft consumer demand in many markets, including consumer hesitancy towards global brands linked to geopolitical tensions, as well as actions taken to reduce customer inventory. Organic growth was 2.1% in the first half (H1) and 2.3% in the second half (H2), with RIG of 0.1% in H1, improving to 1.4% in H2.

Organic growth of 2.2% was impacted by a slowdown in category growth and our own below-market development. We have a clear focus on accelerating category growth and improving our market share performance in 2025 and over the medium term. An important part of how we deliver this is focusing our resource allocation behind our strongest growth drivers: scaling existing winning platforms and brands; accelerating the rollout of our innovation 'big bets'; and building new growth engines that capture emerging consumer trends.

On market share performance, in 2024 we gained or held share in approximately half of our business cells by number, but in less than half of our business cells by sales value. The majority of the Group's market share loss is driven by 18 key underperforming business cells, which together account for approximately 21% of Group sales. We are executing our action plans at pace for each cell and are seeing some early signs of improvement.

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