Nestlé Press Release

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Vevey/Switzerland, February 13, 2025

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[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."

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 call - video webcast:

https://edge.media-server.com/mmc/go/Nestle2024-FullYearResults/

10:30 CET Analyst & investor call - video webcast

https://edge.media-server.com/mmc/go/Nestle2024-FullYearResultsInvestorCall/

Full details on our website:

https://www.nestle.com/media/mediaeventscalendar/allevents/2024-full-year-results

Press release links

2024 full year results press release - French (pdf):

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

2024 full year results press release - German (pdf):

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

Other reports published today

Financial Statements 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 publication (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               +41 21 924 3509             [email protected]

Media - Christoph Meier                  +41 21 924 2200             [email protected] 

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.

A key element of improving our performance is strengthening our value propositions to consumers and customers. We are increasing investment to deliver superior product taste and quality, unbeatable value, unmissable visibility and compelling brand communication. Price competitiveness is a priority in the context of the high inflationary environment for certain commodities, most notably coffee and cocoa. We are taking an agile approach to passing on input cost increases, selectively investing in price as we focus on restoring competitiveness. To strengthen brand communication, we are stepping up investment and improving efficiency and effectiveness. Advertising and marketing spend as a percentage of sales fell from 9.0% in 2019 to a low of 6.6% in H2-2022; in 2024, this recovered to 8.1% and is planned to increase further to 9% by the end of 2025.

Efficiency and productivity

At our Capital Markets Day in November 2024, we announced a new three-year cost reduction program we have called Fuel for Growth, which is in addition to existing cost efficiency initiatives. We target CHF 2.5 billion run-rate cost savings from the new program by the end of 2027, and these savings will be used to fund increased investment in growth.

The Fuel for Growth program is expected to drive in-year savings of CHF 0.7 billion in 2025, CHF 1.4 billion in 2026 and CHF 2.3 billion in 2027. By the end of 2027, we expect to have reached the full run-rate savings of CHF 2.5 billion. In 2025, CHF 300 million of the savings impact this year only, with the further CHF 400 million being recurring savings that reduce the cost base on an ongoing basis. Over CHF 300 million of the expected CHF 0.7 billion cost savings for 2025 have already been secured.

Approximately three-quarters of the total savings in Fuel for Growth will come in procurement, with the remainder coming from operational efficiencies and commercial investments. Within procurement, the most significant savings will come from AI-powered procurement and supplier management, spend consolidation and aggregation, and e-sourcing expansion and automation. Within operational efficiencies and commercial investments, key initiatives include reviewing operating models as well as opportunities in manufacturing and logistics. The savings in procurement and commercial investments are expected to have limited costs to achieve; operational efficiencies will typically incur one-off costs of approximately 2 times the annual savings.

These Fuel for Growth savings are in addition to over CHF 1 billion per annum of ongoing efficiencies from existing Nestlé Continuous Excellence initiatives.

Expected phasing of Fuel for Growth cost savings program:

Strengthening foundations

Nestlé's success depends on alignment and in-market execution, and people are critical to that. 2024 was an important year of change in our leadership. Our new leadership team moved quickly to align and refocus the organization. We have simplified the Group's structure and reorganized Nestlé Waters and premium beverages into a global, standalone business. This is complemented by the introduction of a more aligned performance management framework - our 'Operational Master Plan' - to increase Group-wide performance and drive pace of execution across the organization. We have also accelerated our digital transformation as we move to becoming a real-time, end-to-end connected enterprise, powered by data and artificial intelligence.

Operating sustainably is an important foundation for Nestlé, and we made progress across multiple areas. In particular, we delivered our 2025 greenhouse gas emission reduction target one year ahead of plan and made strong progress with our regenerative agriculture agenda.

Guidance

Our 2025 guidance is in line with the outlook we provided at the Capital Markets Day, with accelerated delivery of cost efficiencies offsetting recent increases in key commodity prices, especially in coffee and cocoa. In 2025, organic sales growth is expected to improve compared to 2024, strengthening through the year as we continue to deliver on our growth plans. UTOP margin is expected to be at or above 16.0% as we invest for growth. Guidance assumes no significant change in key macroeconomic variables.

Our objective remains to deliver superior, sustainable and profitable growth. In the medium term, we continue to expect organic sales growth to be at 4% plus in a normal operating environment, with an underlying trading operating profit margin at 17.0% plus.

Financial review

Sales

Total reported sales decreased by 1.8% to CHF 91.4 billion, including negative impacts of 3.7% from foreign exchange movements and 0.3% from net divestitures. Organic growth was 2.2%. Pricing was 1.5%, reflecting a reduction in inflation across most categories after two years of high input cost and price increases. RIG returned to positive growth at 0.8% and was still impacted by soft consumer demand in many markets, including consumer hesitancy towards global brands in certain markets. Additionally, actions taken to reduce customer inventory in the second half of the year reduced full-year RIG by approximately 20 basis points.

By geography, organic growth was driven by emerging markets and Europe, which together more than offset a decrease in North America. In developed markets, organic growth was 1.2%, with positive pricing and RIG. In emerging markets, organic growth was 3.7%, led by pricing with positive RIG.

Organic growth by product category was as follows:

·      Coffee was the largest growth contributor with mid single-digit growth, supported by the three leading coffee brands: Nescafé, Nespresso and Starbucks. 

·      Sales in confectionery grew at a mid single-digit rate, led by KitKat and key local brands. 

·      PetCare delivered low single-digit growth, driven by continued momentum for science-based premium brands Purina ProPlan, Purina ONE and Friskies. 

·      Nestlé Health Science achieved mid single-digit growth, with double-digit growth in the second half of the year. 

·      Water reported low single-digit growth, with solid growth for S.Pellegrino and supported by the successful launch of Maison Perrier. 

·      Infant Nutrition sales grew at a low single-digit rate, supported by continued momentum for NAN and Lactogen. 

·      Dairy posted negative growth, as a decline in coffee creamers and ambient dairy more than offset growth for affordable milks and dairy culinary solutions. 

·      Culinary reported negative growth, with mid single-digit growth in Maggi more than offset by a decline in frozen food in North America. 

By channel, organic growth in retail sales was 2.1%. Organic growth of out-of-home channels was 3.2%. E-commerce sales grew organically by 11.3%, reaching 18.9% of total Group sales.

Gross profit and operating profit

Gross profit was flat at CHF 42.7 billion, and the gross profit margin increased by 80 bps to 46.7%. The gross profit margin reached 47.2% in H1, then declined 90 bps sequentially to 46.3% in H2, driven by higher input costs in coffee and cocoa.

Distribution expenses as a percentage of sales was flat versus the prior year at 8.3%. Marketing and administration expenses as a percentage of sales increased by 90 bps to 19.8%. This comprised: advertising and marketing expenses as a percentage of sales up 40 bps to 8.1%, as we began to step up investment; and administration expenses as a percentage of sales up 50 bps to 11.7% of sales, largely reflecting higher labor costs, the appreciation of the Swiss Franc and one-off items. Research and development costs as a percentage of sales was flat versus the prior year at 1.8%.

Underlying trading operating profit was CHF 15.7 billion, a decrease of 2.2% on a reported basis and an increase of 1.3% in constant currency. The underlying trading operating profit margin was 17.2%, a decrease of 10 bps on a reported basis and flat in constant currency.

Restructuring and net other trading items was CHF 1.1 billion compared with CHF 1.5 billion in the prior year, with the reduction mainly due to lower restructuring costs. Trading operating profit increased by 0.8% to CHF 14.6 billion. The trading operating profit margin reached 16.0%, an increase of 40 bps on a reported basis and 50 bps in constant currency.

Net financial expenses and income tax

Net financial expenses increased to CHF 1.5 billion from CHF 1.4 billion, reflecting a higher level of average net debt and an increase in interest rates. The average cost of net debt was 2.6% compared to 2.5% in 2023.

The Group reported tax rate was 25.0%, compared to 18.2% in the prior year. The increase was mainly due to a write-off in deferred tax assets from changes in utilization projections and the absence of the favorable one-off items that positively impacted 2023. The underlying tax rate increased by 70 basis points to 21.9%, driven by higher corporate and withholding tax rates in some jurisdictions, as well as changes in the geographical and business mix of profits.

Net profit and earnings per share

Net profit decreased by 2.9% to CHF 10.9 billion. Basic earnings per share decreased by 1.0% to
CHF 4.19, reflecting the movement in net profit and the impact of the share buyback program.

Underlying net profit was CHF 12.4 billion, a decrease of 2.6%, and an increase of 0.6% in constant currency. Underlying earnings per share was CHF 4.77, a decrease of 0.8%, and an increase of 2.5% in constant currency. The share buyback program contributed 1.1% to the underlying earnings per share change, net of finance costs.

Cash flow

Cash generated from operations increased to CHF 19.6 billion from CHF 19.2 billion in 2023. Free cash flow was CHF 10.7 billion compared to the prior year free cash flow of CHF 10.4 billion, which included CHF 0.6 billion proceeds from the disposal of a financial asset, with the increase primarily due to lower taxes paid and lower cash restructuring costs, as well as reduced capital expenditure.

Dividend

At the Annual General Meeting on April 16, 2025, the Board of Directors will propose a dividend of CHF 3.05 per share, an increase of 5 centimes. Nestlé has maintained or increased the dividend in Swiss francs over the last 65 years. We remain committed to the long-held practice of increasing the dividend in Swiss francs every year.

The last trading day with entitlement to receive the dividend will be April 17, 2025. The net dividend will be payable as from April 24, 2025. Shareholders entered in the share register with voting rights on April 9, 2025, at 12:00 noon (CEST) will be entitled to exercise their voting rights.

Share buyback program

In 2024, the Group repurchased 48.2 million Nestlé S.A. shares for CHF 4.4 billion under the
CHF 20.0 billion share buyback program that began in January 2022 and was completed as planned in December 2024. Under the program, 187.4 million shares were repurchased in the three-year period, of which 143.9 million have so far been cancelled. At the upcoming Annual General Meeting, the Board of Directors will propose the cancellation of the remaining 43.5 million repurchased shares, reducing the share capital of Nestlé S.A. from CHF 262,000,000 to CHF 257,652,000. We do not currently anticipate initiating a new share buyback program in 2025.

Net debt

Net debt was CHF 56.0 billion as at December 31, 2024, compared to CHF 49.6 billion at December 31, 2023. The increase largely reflected cash outflows for the dividend payment of CHF 7.8 billion and share buybacks of CHF 4.5 billion as well as the impact of foreign exchange movements. The ratio of net debt to Adjusted EBITDA was 2.90 times at December 31, 2024, compared to 2.54 times at December 31, 2023. This is towards the top of our target range of 2 to 3 times for net debt to Adjusted EBITDA.

Return on invested capital

Return on invested capital was 14.1%, compared to 13.9% in 2023. This improvement reflects a lower base of average invested capital, mainly linked to working capital, and a reduction in restructuring costs.

Minority participations

In late 2024, we established Nestlé Equity Holdings to consolidate ownership of many of our minority participations, enhancing governance and allowing for a more consistent and efficient approach to managing these interests.

Operating segment review

Zone North America

Our growth in North America in 2024 was disappointing. Organic sales growth of -0.5% reflects mixed delivery across the portfolio, in the context of a challenging consumer environment. We delivered RIG-led positive organic growth in approximately two-thirds of the business by sales. This was offset by weak performance in frozen food and coffee creamers. Turnaround plans are underway in both businesses. In Zone North America, UTOP margin increased modestly, which was the result of an improvement in gross profit margin and a step-up in growth investments.

Segment performance summary

·     Organic growth was -0.5%, with -0.8% RIG and 0.4% pricing. Pricing was negative in H2, driven by competitive dynamics in PetCare and price adjustments in frozen food and coffee creamers.

·     Reported sales decreased by 2.5% to CHF 25.3 billion, including a -2.0% impact from foreign exchange movements and -0.1% from net divestitures.

·     Market share gains were achieved in coffee, while we lost market share in frozen pizza and coffee creamers.

·     UTOP margin increased by 10 bps to 22.3%. Gross profit margin expanded, supported by pricing, price pack architecture and mix management, and structural cost control was strong. Advertising and marketing investment was increased significantly to support future growth.

Key sales growth drivers by product category

·     PetCare was the largest growth contributor, with low single-digit growth driven by premium brands, particularly in the cat and therapeutic diets segments.

·     Confectionery grew at a double-digit pace, driven by Tollhouse baking products and pricing actions particularly in the second half of the year.

·     Beverages (including coffee and coffee creamers) delivered positive growth overall, with new product launches supporting continued strong momentum for Nescafé and Starbucks, offsetting a decrease in Coffee mate.

·     Infant Nutrition saw a sales decrease, with a decline in Gerber in the context of a category slowdown in baby food.

·     Frozen food posted negative growth, primarily reflecting the impact of price competition in pizza and the winding down of the frozen meals business in Canada.

Zone Europe

In Zone Europe, our sales growth was broad-based, with improved market share trends in a number of categories. Growth was mainly pricing led, reflecting the inflationary environment for coffee and confectionery, supported by positive RIG in coffee and PetCare. Growth was impacted by temporary delistings in the third quarter, but recovered in the fourth quarter, driven by coffee and confectionery. UTOP margin increased, with improved gross profit margin and portfolio optimization helping fund the step-up in growth investment.

Segment performance summary

·     Organic growth was 3.3%, comprising 0.8% RIG and 2.5% pricing.

·     Reported sales decreased by 1.0% to CHF 18.9 billion, including -2.5% impact from foreign exchange movements and -1.9% from net divestitures.

·     Market share gains were achieved in coffee and PetCare, with losses in confectionery and water.

·     UTOP margin increased by 50 basis points to 16.9%, driven by strong gross profit margin improvement and supported by portfolio optimization.

Key sales growth drivers by product category

·     Coffee posted mid single-digit growth, driven by Nescafé soluble coffee and Starbucks products.

·     Sales in confectionery grew at a mid single-digit pace, driven by KitKat and key local brands.

·     PetCare delivered low single-digit growth, led by Purina ONE, Gourmet and ProPlan.

·     Nestlé Professional achieved mid single-digit growth, driven by beverage solutions.

·     Water saw low single-digit growth, impacted by supply constraints in the second half of the year.

·     Infant Nutrition posted negative growth, reflecting a category slowdown.

Zone Asia, Oceania and Africa

We achieved solid organic sales growth in Zone AOA, with most categories and regions reporting positive RIG. We improved market share trends, particularly for key global brands like KitKat, reignited growth momentum in PetCare and significantly stepped up e-commerce growth. Several macroeconomic headwinds weighed on growth, with consumer hesitancy towards global brands linked to geopolitical tensions persisting throughout the year. In the fourth quarter, we took action to reduce customer inventories in our infant nutrition and dairy categories. For the year, UTOP margin declined, driven by increased investment in advertising and marketing.

Segment performance summary

·     Organic growth was 3.4%, with 0.6% RIG and 2.8% pricing.

·     Reported sales decreased by 4.1% to CHF 16.8 billion, strongly impacted by foreign exchange movements, which reduced sales by 7.5%.

·     Key markets driving growth were Central and West Africa, the Middle East and North Africa, and the Philippines.

·     Key market share developments were gains in PetCare and losses in dairy and culinary.

·     UTOP margin decreased by 20 basis points to 23.3%, driven by increased investment in advertising and marketing.

Key sales growth drivers by product category

·     Coffee posted mid single-digit growth, driven by Nescafé soluble and ready-to-drink offerings.

·     Culinary delivered high single-digit growth fueled by strong sales momentum for Maggi.

·     Nestlé Professional achieved high single-digit growth, with strong contributions from most geographies and categories.

·     Confectionery grew at a mid single-digit pace, driven by KitKat and supported by new product launches.

·     PetCare achieved high single-digit growth, led by key brands Felix and Purina ONE.

·     Infant Nutrition posted low single-digit growth following actions to reduce customer inventories.

·     Dairy saw a sales decline, impacted by the introduction of a sales tax in Pakistan as well as actions to reduce customer inventories and reshape the portfolio.

Zone Latin America

Sales growth in Zone Latin America was pricing-led growth, with RIG declining slightly. During the year, consumer demand softened and financial pressure on customers increased in several markets due to higher borrowing costs. These headwinds led to actions to reduce customer inventories, which weighed on RIG in Q3. Improved growth in Q4 was driven by confectionery and coffee, with new price increase measures being taken in both categories. UTOP margin for the year declined due to increased investments in growth as well as higher costs linked to the acquisition of the Grupo CRM confectionery business.

Segment performance summary

·     Organic growth was 2.5%, with -0.3% RIG and 2.7% pricing.

·     Reported sales decreased by 2.2% to CHF 11.9 billion, with a negative impact of 4.9% from foreign exchange movements.

·     Key markets driving growth were Brazil and Mexico; weaker performance in smaller markets such as Peru and Colombia.

·     Market share developments included gains in portioned coffee and culinary, with losses in dairy and soluble coffee.

·     UTOP margin decreased by 30 basis points to 20.4%. The reduction follows increased advertising and marketing investments.

Key sales growth drivers by product category

·     Confectionery delivered high single-digit growth, driven by key local brands, particularly Garoto, and supported by new product launches in chocobakery.

·     Nestlé Professional grew at a double-digit pace, underpinned by customer acquisition.

·     Coffee saw mid single-digit growth, led by Nescafé, with strong growth for Nescafé Dolce Gusto.

·     Culinary reported low single-digit growth supported by strong sales momentum for Maggi.

·     PetCare posted flat growth, supported by Felix and Friskies.

·     Infant Nutrition and dairy reported sales declines as robust demand for NAN infant formula was more than offset by a sales decline in Nido.

Zone Greater China

In Zone Greater China, growth was underpinned by positive RIG delivery in every quarter despite soft consumer demand and intense price competition in several categories. This performance was achieved by driving faster innovation in key categories and adapting route-to-market and channel strategies to capture new growth opportunities. The decline in UTOP margin reflects increased commodity costs and higher growth investments.

Segment performance summary

·     Organic growth was 2.1%, with 4.3% RIG and -2.1% pricing.

·     Reported sales decreased by 1.3% to CHF 5.0 billion, as foreign exchange reduced sales by 3.5%.

·     Market share developments included gains in Infant Nutrition and confectionery, with losses in culinary and dairy.

·     UTOP margin decreased by 40 basis points to 16.1%, reflecting higher input costs and increased advertising and marketing investments.

Key sales growth drivers by product category

·     Infant Nutrition was the largest contributor to organic growth, with high single-digit growth, driven by NAN and supported by improved sales momentum for illuma.

·     Coffee posted mid single-digit growth, driven by distribution expansion and new innovations, particularly in Nescafé ready-to-drink offerings.

·     Confectionery grew at a mid single-digit rate, with solid growth for Hsu Fu Chi and Shark Wafer, supported by new product launches and e-commerce growth.

·     Nestlé Professional delivered low single-digit growth in challenging market conditions, while culinary and dairy-related categories reported negative growth.

Nestlé Health Science

Nestlé Health Science delivered a significant step-up in growth and margin in 2024, with all segments contributing to the improved performance. Organic growth recovered through the year, with double-digit growth in the second half. A key driver of the improved performance was the resolution of supply constraints for our U.S. vitamins, minerals and supplements (VMS) business. UTOP margin increased strongly, driven by growth leverage, mix improvement and cost efficiencies. 

Segment performance summary

·     Organic growth was 6.2%, with 5.5% RIG and 0.7% pricing.

·     Reported sales increased by 3.7% to CHF 6.7 billion, including a foreign exchange impact reducing sales by -2.8%.

·     Market share increased in Medical Nutrition and stabilized in VMS after declining in the second half of 2023.

·     UTOP margin improved by 200 basis points to 14.0%. The increase was driven by growth leverage, mix improvement and cost efficiencies.

Key sales growth drivers

·     By geography, North America posted mid single-digit growth, Europe delivered double-digit growth and other regions combined saw positive growth.

·     VMS achieved mid single-digit growth, with double-digit growth in the second half and an improvement in market share trends.

·     Active Nutrition posted mid single-digit growth, supported by strong momentum for Orgain, Vital Proteins and healthy aging products.

·    Medical Nutrition delivered double-digit growth, with continued market share gains. Growth was driven by strong sales momentum for adult medical care products, particularly Peptamen and Resource, as well as Vitaflo. Sales for gastrointestinal products continued to grow at a double-digit rate.

Nespresso

Nespresso delivered solid RIG-led growth, driven by the continued rollout of Vertuo, particularly in the U.S. and continued good growth in out-of-home channels. Q4 saw the highest quarterly growth of the year, supported by strong seasonal campaigns and the impact of pricing actions. UTOP margin decreased as we invested behind the expansion of Vertuo and structural costs increased.      

Segment performance summary

·     Organic growth was 2.2%, with 1.6% RIG and 0.6% pricing.

·    Reported sales increased by 0.1% to CHF 6.4 billion, including -2.4% impact from foreign exchange movements.

·     We achieved market share gains in the U.S., but lost some share in Europe.

·     UTOP margin was down 30 bps to 20.0%, driven by increased advertising and marketing investments as well as higher structural costs.

Key sales growth drivers

·     By geography, sales in North America grew at a mid single-digit rate with continued market share gains. In Europe, sales posted close to flat growth.

·     By system, growth was driven by the Vertuo system, with strong sales momentum across all geographies. Sales for out-of-home channels grew at a mid single-digit rate backed by the continued rollout of the Momento system.

Annex

Full-year sales and underlying trading operating profit (UTOP) overview by product