VEVEY, SWITZERLAND — Nestlé shared its mid-year earnings July 30, reporting total net sales of 41.15 billion CHF ($45.26 billion USD), declining 9.5% from 45.46 billion CHF ($50 billion USD) compared to year-ago sales. Organic growth increased 2.8%, Nestlé reported.

The company’s top growth contributor was its Purina PetCare business, led by two of its premium brands, Purina Pro Plan and Purina ONE. Nestlé reported its pet segment showed strong growth over the first two quarters, along with its dairy, culinary, coffee at-home and health science businesses.

"PetCare continued to see outstanding growth globally," said Mark Schneider, chief executive officer of Nestlé. "Most segments grew in double digits with market share gains. Purina's performance was driven by continued strong momentum in e-commerce and increased demand for premium products.

"Innovation also continued to make a significant contribution, as demonstrated by the recent launch of ProPlan LiveClear, the first allergen reducing cat food," he added.

Purina reported 6.98 billion CHF ($7.68 billion USD) in sales over the first two quarters of 2020, growing 6.6% from year-ago sales of 6.55 billion CHF ($7.2 billion USD). Organic growth for Purina topped 12.5% over the same period, and real internal growth was 11.3%, making the pet segment Nestlé’s strongest growing business.

Purina’s premium brands drove sales in North America, including Purina Pro Plan, Purina ONE and Fancy Feast.

Nestlé’s pet segment drove double-digit sales growth in Zone EMENA, which includes Europe, the Middle East and North Africa. The company’s recent acquisition of Lily’s Kitchen, based in the United Kingdom, also boosted sales in this region.

"Purina PetCare reported strong growth for Felix, Purina One, Tails.com and Lily's Kitchen, supported by e-commerce," Schneider said.

In Zone AOA, which includes Asia, Oceania and sub-Saharan Africa, Purina products were another leading contributor as sales continued to grow in the double-digits.

"We are very happy with what we have seen [in pet food], both in the United States, but in Europe and in emerging markets as well," commented François Roger, executive vice president and chief financial officer of Nestlé. "The market has been growing at a strong mid single-digit rate even before COVID-19. Don't forget the rates that we grew by 7% last year. We saw strong performances across most markets and segments. We have clearly been gaining market share, and especially through e-commerce."

Purina remains Nestlé’s second most profitable business segment, led only by powdered and liquid beverages at 10.74 billion CHF ($11.82 billion USD) in sales so far in 2020.

"We continue to reposition our portfolio towards businesses that offer more profitable growth," Schneider said. "Compared to 2019, significant divestments and strategic reviews are now increasingly balanced by acquisitions in high-growth areas, namely Nestlé Health Science and PetCare."

Nestlé’s overall e-commerce sales grew 48.9% over the first half of fiscal 2020, now totaling 12.4% of overall sales for the company.

The company reported 290 million CHF ($319 million USD) in cost associated with COVID-19, including frontline worker bonuses, safety procedures, donations and other amenities provided to its employees and consumers.

“The exact financial impact of COVID-19 for the full year remains difficult to quantify and will depend on the duration and economic consequences of this crisis as well as the speed of recovery in the out-of-home channel,” the company stated in an official press release.

"COVID-19 continues to impact people around the world,” said Mark Schneider, chief executive officer of Nestlé. “We stand with all those affected and are committed to helping where we can. I would like to thank every member of the Nestlé 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.”

The company reaffirmed its full-year guidance of growing organic sales by 2% to 3%, improving its operating profit margin and earnings per share.

“Nestlé has remained resilient in a rapidly changing environment, delivering solid organic growth and improved margins in the first half,” Schneider added. “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."

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