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2016-10-20

Nestlé nine-month sales: 3.3% organic growth, 2.5% real internal growth | Full-year outlook: organic growth around 3.5% with margin improvement

Nestlé S.A. / Nestlé nine-month sales: 3.3% organic growth, 2.5% real internal
growth |Full-year outlook: organic growth around 3.5% with margin improvement
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solely responsible for the content of this announcement.
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Vevey, 20 October 2016

Nestlé nine-month sales:
3.3% organic growth, 2.5% real internal growth

Full-year outlook: organic growth around 3.5% with margin improvement

* Total sales of CHF 65.5 billion, up 1.0%
* 3.3% organic growth, 2.5% real internal growth, 0.8% pricing
* For the full year 2016 we expect organic growth of around 3.5%,
improvements in margins and underlying earnings per share in constant
currencies, and increased capital efficiency

Paul Bulcke, Nestlé CEO: "In an environment marked by deflation and low raw
material prices, we continued to privilege volume growth, resulting in real
internal growth at the higher end of the industry in both emerging and
developed markets. Pricing remained soft but increasing.

Our growth was broad-based across categories, allowing us to gain or maintain
market share in most of our businesses. We are making progress in addressing
our challenges and driving our different initiatives amidst a generally
softer trading environment.

In line with our strategy we continue to invest for the future. We maintain a
high level of brand support while building our innovation pipeline, both
globally and locally. At the same time, we drive more operational and
structural efficiencies by standardizing, sharing and scaling more activities
above market.

For the full year 2016, considering the current softer environment, we expect
organic growth of around 3.5%,
improvements in margins and underlying earnings per share in constant
currencies, and increased capital efficiency."

Business Review

* Sales of CHF 65.5 billion, with aforeign exchange impact of -1.7%. The net
result of acquisitions and divestitures impacted sales growth by -0.6%.
* Organic growth was 3.3%, composed of 2.5% real internal growth and 0.8%
pricing. All geographies delivered positive growth in generally subdued
trading environments. * 4.8% in the Americas (AMS) * 2.1% in Europe, Middle
East and North Africa (EMENA) * 2.5% in Asia, Oceania and sub-Saharan
Africa (AOA)

* Real internal growth was broad based across geographies and categories. *
2.3% in AMS * 2.4% in EMENA * 3.0% in AOA
* We continued to grow both indeveloped markets with organic growth of 1.9%
(real internal growth of 2.5%) and inemerging markets with 5.3% (real
internal growth of 2.5%).
* Pricing showed some pick-up but remained soft.
* We gained or maintained market share in close to 60% of our businesses.
* Effective January 2017,Nestlé Professional is moving from a
globally-managed business to regionally managed businesses integrated in
the Zones and supported by a Nestlé Professional Strategic Business Unit.
This will facilitate greater focus on customers and enhance alignment and
execution in each region and market.
* In early October we completed the transaction with R&R to createFroneri , a
new joint venture in ice cream, frozen food and chilled dairy, combining
activities in Europe, the Middle East (excluding Israel), Argentina,
Australia, Brazil, the Philippines and South Africa.

Zone AMS

Sales of CHF 18.8 billion, 4.5% organic growth, 1.6% real internal growth

* InNorth America growth was driven byCoffee-mate and petcare as well asLean
Cuisine andStouffer's which continued to do well with ongoing product
innovation and brand support, especially single-serve meals and theFit
Kitchen platform.Lean Cuisine andStouffer's as well as Nestlé USA overall
continued to gain market share. Canada delivered solid growth with
chocolate and ice cream the highlights.

* OverallLatin America delivered good growth driven by Mexico across
dairy,Nescafé and confectionery. The Plata region as well as Colombia did
well, and petcare remained a key growth contributor across Latin America.
Growth in Brazil was resilient but affected by necessary price increases,
particularly in dairy and confectionery.

Zone EMENA

Sales of CHF 12.2 billion, 2.2% organic growth, 2.7% real internal growth

* The growth momentum is based on real internal growth which drove market
share gains across the Zone. Most countries and categories grew well.

* Western Europe continued to deliver positive growth despite the
deflationary environment.Nescafé Dolce Gusto , petcare and frozen pizza
were the main growth drivers again. Italy and the Iberian region were the
highlights.

* InCentral and Eastern Europe Russia delivered double-digit growth.Nescafé
and petcare were the main contributors in the region. Romania, Hungary and
the Czech Republic also contributed to good results.

* In theMiddle East and North Africa growth was driven byNescafé and ambient
culinary. Turkey grew double digit again withNescafé and confectionery
doing particularly well and North Africa also contributed positively. In
the Middle East, however, instability continued to affect our business.

Zone AOA

Sales of CHF 10.6 billion, 2.8% organic growth, 2.7% real internal growth

* The majority of the Zone's businesses saw good, sustainable growth and
market share momentum. South East Asia with the Philippines, Indonesia and
Vietnam showed strong growth. Sub-Saharan Africa also did well, growing
despite continued economic volatility. The sustained recovery ofMaggi
noodles in India was also encouraging. Yinlu in China, as expected,
continued to weigh on the Zone's performance.

* InChina the environment remained challenging in the food and beverage
category. Within this context Yinlu continued to have a negative impact on
Zone performance as we worked on our turnaround initiatives. However, we
maintained positive momentum inNescafé , both soluble and ready-to-drink,
as well as confectionery wafers.

* India grew strongly as theMaggi noodles business continued to gain back
market share and comparatives turned favourable. Chocolate, driven byKitKat
, also did well.

* South East Asia delivered high single-digit growth and most markets
performed well with Vietnam and Indonesia delivering double-digit growth
led by a strong performance ofMilo . The Philippines grew high
single-digit, driven byNescafé andBear Brand .

* Sub-Saharan Africa continued to grow well across all categories, especially
withMaggi . Nigeria, Ghana and the Ivory Coast remained the highlights.

* Indeveloped markets , Japan's solid growth continued to build on product
and business model innovation aroundNescafé andKitKat , while competitive
intensity amongst retailers impacted results in Oceania.

Nestlé Waters

Sales of CHF 6.1 billion, 4.2% organic growth, 4.4% real internal growth

* Nestlé Waters maintained good momentum, driven by strong growth in emerging
markets as well as in developed markets with good results in both the US
and Europe.

* Across the business, international premium sparkling brandsS.Pellegrino
andPerrier continued to drive performance. There was sustained good growth
inNestlé Pure Life and strong contributions from iconic local brands such
asPoland Spring in the US,Buxton in the UK, andSta.María in Mexico.

Nestlé Nutrition

Sales of CHF 7.7 billion, 1.3% organic growth, 0.8% real internal growth

* Nestlé Nutrition maintained modest growth in the context of changed
category dynamics, especially inChina where negative pricing and inventory
adjustments ahead of new regulation caused category growth to stall.
Despite this, the performance of our super premium brandilluma remained
solid with double-digit organic growth.

* In the US, the transition to new packaging formats and temporary supply
constraints weighed on organic growth but these issues are now largely
resolved.

* The Middle East was impacted by political instability causing supply
constraints while there was solid growth across other markets in Latin
America and Asia, with Brazil, Mexico, the Philippines and Indonesia the
highlights.

Other businesses

Sales of CHF 10.1 billion, 4.6% organic growth, 4.0% real internal growth

* Growth inNestlé Professional was driven by emerging markets, particularly
China, Russia and Mexico. The US maintained its solid performance despite
pricing pressure, whilst Canada and Western European markets were more
challenged.

* Nespresso maintained good growth with strong momentum in AMS and AOA and
with a solid performance in EMENA. Following the success of theVertuoLine
system in North America, it will be launched in France this month.
Nespresso's ongoing geographic expansion continued during the period with
the opening of 21 new boutiques across the world.

* Nestlé Health Science delivered good growth, with double-digit growth in
Consumer Care thanks to strong performances ofBoost andCarnation Breakfast
Essentials in the US, as well as the continued roll-out ofMeritene in
Europe. Good growth in Medical Nutrition was driven by the allergy
portfolio, particularly in China.

* InNestlé Skin Health the consumer business performed well fuelled
byCetaphil cleansers and moisturisers, theCetaphil Baby line extension in
the US, andDaylong sun protection in Europe. The prescription business was
supported by product innovation such asEpiduo Forte (acne) andSoolantra
(rosacea), while facing generic pressure onOracea andDifferin in the US.

Outlook

For the full year 2016, considering the current softer environment, we expect
organic growth of around 3.5%, improvements in margins and underlying
earnings per share in constant currencies, and increased capital efficiency.

Contacts

Media: Robin Tickle Tel.: +41 21 924 22 00

Investors: Steffen Kindler Tel.: +41 21 924 35 09

Annex

Nine-month sales overview 2016

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| Jan.-Sept. 2016 Jan.-Sept. 2015 Jan.-Sept. 2016 Jan.-Sept. 2016 |
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