Nestlé sees organic growth, maintains momentum
Image: Nestlé
Swiss food giant Nestlé has posted its annual results, and its Infant Nutrition segment saw high single-digit growth, based on continued momentum for premium infant formula, including human milk oligosaccharides (HMOs) products as well as speciality formulas, the company says. Dairy reported mid-single digit growth globally, led by fortified milks, coffee creamers and home baking products.
Overall, organic growth reached 7.2%, with pricing of 7.5% and real internal growth (RIG) of -0.3%. Growth was broad-based across geographies and categories. Total reported sales were CHF93 billion, a decrease of 1.5% (FY-2022: CHF94.4 billion). The underlying trading operating profit (UTOP) margin was 17.3%, increasing by 20 basis points on a reported basis and by 40 basis points in constant currency. The trading operating profit (TOP) margin was 15.6%, increasing by 160 basis points.
As for 2024, the company says, “We expect organic sales growth around 4% and a moderate increase in the underlying trading operating profit margin. Underlying earnings per share in constant currency is expected to increase between 6% and 10%.” Further, in 2025, the mid-term targets are “fully confirmed, with mid single-digit organic sales growth and an underlying trading operating profit margin range of 17.5% to 18.5% by 2025. Underlying earnings per share in constant currency should increase to between 6% and 10%.
Mark Schneider, Nestlé CEO, comments, “Unprecedented inflation over the last two years has increased pressure on many consumers and impacted demand for food and beverage products. In this challenging context, we delivered strong organic growth and solid margin improvement with increased marketing and other growth investments. Our free cash flow generation returned to historical levels.
“Looking to 2024, we are prioritizing volume- and mix-led growth with increased brand support, as we enhance value for consumers through active innovation and renovation, premiumisation, affordability and more nutritious options. We will continue to focus capital allocation on our fast-growing billionaire brands, which enables us to deliver dependable growth while enhancing brand loyalty.
“To drive market share gains, our key priorities are delighting consumers through differentiated offerings and focusing on superior execution. We are confident that we have the right strategy, portfolio and capabilities to deliver on our 2025 targets.”
