Nestle S.A.: reports half-year results for 2020

Vevey / CH. (nsa) Swiss Nestle S.A. announced its financial results for the first half 2020. Highlights:

• Organic growth reached 2.8 percent, with real internal growth (RIG) of 2.6 percent and pricing of 0.2 percent. Growth was supported by sustained momentum in the Americas, Purina PetCare and Nestle Health Science.
• Divestitures and foreign exchange reduced sales by 12.3 percent. Total reported sales decreased by 9.5 percent to CHF 41.2 billion (6M-2019: CHF 45.5 billion).
• The underlying trading operating profit (UTOP) margin reached 17.4 percent, up 30 basis points. The trading operating profit (TOP) margin increased by 140 basis points to 16.9 percent.
• Earnings per share increased by 22.2 percent to CHF 2.06 on a reported basis. Underlying earnings per share increased by 0.5 percent in constant currency and decreased by 5.9 percent on a reported basis to CHF 2.01.
• Free cash flow decreased by 19.1 percent to CHF 3.3 billion, largely due to a delayed dividend payment from an associate company and lower reported sales.
• Portfolio management is fully on track. Nestle is exploring strategic options, including a potential sale, for parts of the Waters business in North America and the Yinlu peanut milk and canned rice porridge businesses in China. Nestle also completed the sale of a 60 percent stake in the Herta charcuterie (cold cuts and meat-based products) business to Casa Tarradellas.
• 2020 Outlook: We expect full-year organic sales growth between 2 percent and 3 percent. The underlying trading operating profit margin is expected to improve. Underlying earnings per share in constant currency and capital efficiency are expected to increase. This guidance is based on our current knowledge of Covid-19 developments and assumes no material deterioration versus present conditions.

Mark Schneider, Nestle CEO, commented: «Covid-19 continues to impact people around the world. We stand with all those affected and are committed to helping where we can. I would like to thank every member of the Nestle team for their dedication and hard work in the face of incredible challenges. Our priorities remain the same; keeping our people safe, assuring continued supply of essential food and beverages to consumers and caring for our communities and business partners through financial and in-kind support.

«Nestle has remained resilient in a rapidly changing environment, delivering solid organic growth and improved margins in the first half. These results demonstrate the agility of our business and the strength of our diversified portfolio across geographies, product categories and channels. With consumer behavior evolving faster than ever, we are adapting to this new reality by strengthening our innovation, leveraging our digital capabilities and executing with speed. Our engaged teams and their commitment to deliver business results while driving progress against our societal and environmental commitments make us a stronger company every day.»

For additional information please read the Company’s PDF file below (132 KB):

20200730-NESTLE-H1-2020.