Nestlé reports 2.2% sales growth but warns of profit margin decline in 2025
SWITZERLAND – Nestlé has reported better-than-expected annual sales growth for 2024, driven by price increases, but warned of a narrower profit margin in 2025 as it ramps up investment for future growth.
Under new CEO Laurent Freixe, Nestlé is focusing on boosting sales volumes, driving innovation, and rebuilding investor confidence after several years of rising prices impacted marketing spending and consumer demand.
The maker of Maggi stock cubes said it expects organic sales growth to improve in 2025, maintaining the target outlined in its November capital markets day. However, Nestlé forecasted an underlying trading operating profit margin of at least 16 percent, down from 17.2 percent in 2024.
Freixe acknowledged the margin pressure, stating: “We expect the margin to narrow in the short term as we invest for growth.”
Nestlé is facing record-high costs for key raw materials, including coffee for Nescafé and cocoa for KitKat, but plans to pass on only part of these increases to consumers.
The company is also pressing ahead with its cost-saving initiatives, aiming to cut CHF 2.5 billion (US$2.75 billion) by 2027. Nestlé revealed that it has already secured over CHF 300 million in savings for 2025.
Despite the sales growth, Nestlé’s overall revenue declined by 1.8 percent, falling from CHF 92.998 billion in 2023 to CHF 91.354 billion in 2024.
Net profit also dropped 2.9 percent to CHF 10.9 billion, compared to CHF 11.209 billion in the previous fiscal year.
However, organic sales grew 2.2 percent, driven by strong performances in coffee, confectionery, and pet care. Regionally, the growth was led by emerging markets and Europe.
Following the financial results, Freixe outlined Nestlé’s strategic focus, stating:
“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 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.”
Looking ahead, Nestlé remains optimistic, forecasting an improvement in organic sales growth compared to 2024, with momentum expected to strengthen throughout the year as the company executes its growth strategy.
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