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Nestlé reports full-year results for 2023

International beverage and food producer says results were excellent despite uncertain global conditions.
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Nestle logo on building facade

Nestlé reported its full-year results for 2023 today, announcing that organic growth for the multinational beverage and food producers reached 7.2%, with pricing of 7.5% and real internal growth (RIG) of -0.3%. 

Growth was broad-based across geographies and categories.

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.

For this year, the company expects that 2024 will produce an 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%.

"Unprecedented inflation over the last two years has increased pressure on many consumers and impacted demand for food and beverage products,” said Mark Schneider, Nestlé CEO in written remarks upon the announcement of the earnings results. “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, premiumization, 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,” he continued. “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."

For Nestlé’s North American operations, the company reported organic growth was 7.3%, with pricing of 7.6%. RIG was -0.3%, reflecting soft consumer demand, capacity constraints and the winding down of the frozen meals and pizza business in Canada.

RIG turned positive in the fourth quarter. Net divestitures reduced sales by 1.7%, as a result of the divestment of a majority stake in Freshly as well as the disposal of the Gerber Good Start infant formula brand in 2022. Foreign exchange had a negative impact of 6.8%. Reported sales in Zone North America decreased by 1.3% to CHF 26.0 billion.

READ: Nestlé reports nine-month sales for 2023

Growth in North America Nestlé said was broad-based, driven by pricing as well as continued strong momentum for e-commerce and out-of-home channels, and saw market share gains in pet food, coffee and frozen meals.

By product category, Purina PetCare was the largest growth contributor, with broad-based demand across segments, channels and brands, particularly Purina ONE, Purina Pro Plan and Friskies.

Sales for Nestlé Professional and Starbucks out-of-home continued to grow at a double-digit rate, led by new customer acquisition. The beverages category, including Starbucks products, Coffee mate and Nescafé, posted mid single-digit growth. Nido growing-up milks posted strong double-digit growth.

Confectionery in Canada recorded high single-digit growth, driven by KitKat and Aero. Water saw low single-digit growth, based on a strong sales development in the fourth quarter. S.Pellegrino and Acqua Panna posted double-digit growth, which more than offset the impact of capacity constraints for Perrier.

Growth in frozen food was negative, impacted by soft consumer demand and the winding down of the frozen meals and pizza business in Canada. In the U.S., growth in frozen food was close to flat, supported by Stouffer's, Jack's and Tombstone.

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