SWITZERLAND – Nestlé, the global food and beverage giant, has reported an impressive 7.2 percent organic growth for the full year 2023, despite achieving a 1.5 percent decrease in total reported sales, amounting to US$106.2 billion. 

The company’s organic growth was robust at 7.2 percent, driven by a 7.5 percent pricing increase reflecting cost inflation over the last two years.  

However, real internal growth experienced a slight decline of -0.3 percent, attributed to soft consumer demand, capacity constraints, and a temporary supply disruption for vitamins, minerals, and supplements in the second half of the year. 

In developed markets, organic growth reached 6.4 percent, primarily led by pricing, while emerging markets saw a more substantial organic growth of 8.4 percent, driven by both pricing and positive real internal growth. 

Coffee exhibited high single-digit growth, with positive sales developments across brands, particularly in out-of-home channels.  

Infant Nutrition achieved high single-digit growth, propelled by continued momentum for premium infant formula, including human milk oligosaccharides (HMOs) products and specialty formulas. 

Dairy reported mid single-digit growth, spearheaded by fortified milks, coffee creamers, and home-baking products. The confectionery segment recorded high single-digit growth, primarily fueled by the sustained double-digit growth for KitKat. 

Across channels, retail sales displayed robust organic growth at 6.5percent, e-commerce sales grew by 13.4 percent, constituting 17.1 percent of total Group sales, and out-of-home channels experienced a significant organic growth of 15.9 percent. 

Nestlé’s underlying trading operating profit margin showed improvement, increasing by 20 basis points to 17.3 percent on a reported basis and by 40 basis points in constant currency. However, the underlying trading operating profit decreased by 0.3 percent to US$18.36 billion, attributed to currency appreciation. 

Net profit witnessed a notable increase of 20.9 percent to US$12.79 billion, with a net profit margin rise of 230 basis points to 12.1 percent on a reported basis and 240 basis points in constant currency. This surge was primarily due to lower asset impairments, reduced reported taxes, and higher income from associates. 

Mark Schneider, Nestlé CEO, said, “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 ahead, Nestlé projects organic sales growth around 4 percent in 2024 and a moderate increase in the underlying trading operating profit margin. The company aims for underlying earnings per share in constant currency to increase between 6 percent and 10 percent. 

Schneider outlined Nestlé’s priorities for 2024, focusing on volume- and mix-led growth, increased brand support, active innovation, premiumization, affordability, and offering more nutritious options. 

For 2025, Nestlé aims to achieve mid single-digit organic sales growth and an underlying trading operating profit margin range of 17.5 percent to 18.5 percent. 

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