SWITZERLAND – Nestlé, a Swiss multinational food and drink processing conglomerate corporation, has cut its organic sales growth forecast for 2024 for the second time this year, as consumer demand continues to soften in the face of high food inflation.  

The company also reduced its outlook for 2024 earnings per share and its underlying trading operating profit (UTOP) margin, reflecting ongoing economic challenges. 

Presenting the nine-month sales figures, CEO Laurent Freixe announced that Nestlé now expects organic sales growth of around 2 percent for the year, down from previous estimates.  

The company’s underlying operating margin is anticipated to reach 17 percent, while earnings per share growth in constant currency is expected to remain broadly flat. 

During the nine-month period ending in September, Nestlé’s sales declined by 2.4 percent year-on-year, totalling CHF 67.1 billion (US$77.4B).  

Organic growth for the period stood at 2.0 percent, almost identical to the 2.1 percent reported in the first half of 2024.  

The company’s real internal growth (RIG), which measures volume and mix, was 0.5 percent, reflecting softer consumer demand, particularly for global brands, which ongoing geopolitical tensions have impacted. 

The company faced additional challenges from currency effects, which reduced sales by 4.1 percent, and divestments, which had a 0.3 percent impact.  

Pricing increased by 1.6 percent, a sign that Nestlé’s pricing strategy has begun to stabilize after significant hikes over the past two years. 

Freixe acknowledged the headwinds facing the business, stating, “Consumer demand has weakened in recent months, and we expect the demand environment to remain soft.”  

North America was particularly hit, with organic sales shrinking by 0.3 percent, while emerging markets and Europe showed more resilience, driving overall growth. 

By region, developed markets recorded organic growth of 1.1 percent, boosted by both positive pricing and RIG. Emerging markets saw stronger growth of 3.5 percent, driven primarily by pricing gains.  

In the Asia, Oceania, and Africa (AOA) zone, reported sales decreased by 5.2 percent, reaching CHF 12.5 billion (US$14.4B), although organic growth was still positive at 3.6 percent. 

Coffee remained a strong category for Nestlé, with mid-single-digit growth supported by its major brands Nescafé, Starbucks, and Nespresso. 

Looking ahead, Freixe reiterated the company’s commitment to increasing investment in innovation, enhancing market execution, and expanding market shares.  

“For our brands to win in the market, we need to invest. We will generate the resources we need through efficiencies and growth leverage,” he said. 

Nestlé makes structural changes 

Additionally, Nestlé announced structural changes approved by its Board of Directors. 

The company will integrate its Greater China division into the Asia, Oceania, and Africa zone (AOA), which will be led by Remy Ejel.  

Effective from January 1, 2024, Nestlé’s operations will be reorganized into three geographical zones: AMS (the Americas), AOA, and Europe, along with Nestlé Health Science (NHS) and Nespresso as separate business units. 

Freixe emphasized the company’s shift toward a digitally connected and data-driven organization, saying, “We are placing a greater emphasis on Nestlé’s digital transformation into a real-time, end-to-end connected, data- and AI-powered organization.” 

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