Nestlé Group’s organic growth was 2.0% for the first nine months, with
positive real internal growth (RIG).
– Real Internal Growth (RIG) is 0.5%, in a weakened situation
user search and actions taken in the third
quarter to reduce customer inventory.
– Pricing is 1.6%, down from unprecedented
increases in the previous two years.
– Total reported sales amounted to 67.1 billion Swiss francs
francs (9 months-2023: 68.8 billion Swiss francs), down from
2.4%. International trade reduced sales by 4.1% and net
sales by 0.3%.
– Changes in the organizational and executive management team with a purpose
stimulating the company’s performance and its transformation.
– The forecast for the whole year 2024 has been updated: the organic growth of
sales are expected to be around 2.0%. The operating margin
operating margin is expected to be around 17.0%.
Growth in underlying earnings per share in constant currency is expected to
be generally unchanged.
Laurent Frex, CEO of Nestlé, commented:
“We achieved organic sales growth driven by a positive
real internal growth. Consumer demand weakened in
recent months and we expect the search environment to remain unchanged.
Given this outlook and our further actions for
decrease in customer inventory in the fourth
quarter, we updated our guidance for the full year, as
organic sales growth is expected to be around 2.0%, c
compliance with the first nine months.
Nestlé is in a leading position in our industry, given the global scale
and the broad portfolio of iconic brands and innovative products,
which are part of the daily life of people at every stage of their lives.
Building on this solid foundation, we will focus on
users and customers and we will improve our categories to
improve performance and gain market share. We will also expand our digital transformation to enhance agility
and our effectiveness. For our brands to win in the market, they must
we invest. We will generate the resources we need through
efficiency and activities that stimulate growth. The disciplined
implementation of Nestlé’s plans will help to achieve
sustainable growth of our performance going forward, and our team is strong
prepared for this to happen.
The organizational changes announced today will unite the efforts of everyone in
the company to achieve focus and compliance. More about ours
we will announce plans at the upcoming Capital Markets Day in
November.”
Group sales Organic growth was 2.0% for the nine months, similar to the 2.1% achieved in the first half. Real domestic growth (RIG) was 0.5%, impacted by reduced demand and consumer hesitancy towards global brands linked to geopolitical tensions. Additionally, in the third quarter, real domestic growth (RIG) was negatively impacted by approximately 60 basis points of actions taken to reduce customer inventories, primarily in the Americas.
Pricing is 1.6%, continuing to normalize after
unprecedented increases in the previous two years. In the third
the quarterly increase in the prices of chocolate products and coffee,
related to higher raw material costs, was partially offset by
the promotional activity in the pet food category and
dairy products. By geography, organic growth is driven by
emerging markets and Europe, which together offset the slight decline in
North America. In developed markets, organic growth was 1.1%, with
positive pricing and real internal growth (RIG). C
emerging markets organic growth was 3.5%, led by
positive real internal growth (RIG) pricing.
Organic growth by product category:
– The “Coffee” category has the biggest contribution to the growth with averages
single digit growth rates supported by the three leading brands –
Nescafe, Starbucks and Nespresso.
– The pet food category scored in the low single digits
growth driven by continued momentum for science-based
premium brands Purina ProPlan, Purina ONE and Fancy Feast.
– Sales of the category of chocolate products increased by
mid-single-digit pace, led by KitKat and key domestic brands.
– The Nestlé Health Science category saw low single-digit growth.
The integration plan is underway, with double-digit growth in the third
quarter.
– The Water category delivered mid-single-digit growth, supported by
the continued growth trend for S.Pellegrino and the recovery in
Perrier.
– Sales in the baby food category grew by a low
single-digit pace, supported by the continued growth trend for
NAN, Lactogen, and Oligosaccharide Products in Human Breast Milk (HMO).
– The category of dairy products shows a negative growth because
declines in coffee creamer and UHT dairy offset
the growth of affordable milk and dairy culinary solutions
products.
– The category of culinary products reports negative growth, led by
falls in frozen foods in North America, while growth for
Maggi remains stable.
By channel, organic retail sales growth was 1.9%. The category of
products for the immediate consumption channel (Out of Home) is 3.4%. Sales
from e-commerce grew organically by 9.7%, reaching 18.5% of
the total sales of the Group.
Net sales impacted earnings by 0.3%, largely related to
the creation of a joint venture with PAI Partners for Nestlé’s business with
frozen pizza in Europe in 2023. The sales impact from
foreign currency is negative – 4.1%. Total reported sales are
down 2.4% to 67.1 billion Swiss francs.
Full 2024 forecast updated: Given
user environment and further actions to reduce
customer inventories in the fourth quarter, guidance for
are updated throughout the year. Organic sales growth is now
expected to be around 2.0%, in line with the first nine months. The basic one
trading operating profit margin is expected to be around 17.0%.
Core earnings per share growth in constant currency is expected to be
generally unchanged.
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