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Nestlé reports organic growth increase in 2023 full-year results

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Nestlé has reported an increase in organic growth of 7.2 per cent in its full-year results for 2023.

“Unprecedented inflation over the last two years has increased pressure on many consumers and impacted demand for food and beverage products,” says Nestlé CEO Mark Schneider. “In this challenging context, we delivered strong organic growth and solid margin improvement with increased marketing and other growth investments.

Underlying earnings per share increased by 8.4 per cent in constant currency and by 0.1 per cent on a reported basis to CHF$4.80 (about US$5.46).

Earnings per share increased by 23.7 per cent to CHF$4.24 (about US$4.82) on a reported basis.

Free cash flow reached CHF$10.4 billion (about US$11.83 billion), an increase of CHF$3.8 billion (about US$4.32 billion) following a significant reduction in working capital.

Total reported sales reached CHF$93.0 billion (about US$105.82 billion), a decrease of 1.5 per cent compared to 2022.

Foreign exchange decreased sales by 7.8 per cent, while net divestitures declined by 0.9 per cent.

Nestlé projects an organic sales growth of approximately 4 per cent and a moderate increase in the underlying trading operating profit margin in 2024, while underlying earnings per share in constant currency is expected to increase between 6 per cent and 10 per cent.

“Looking to 2024, we are prioritising volume- and mix-led growth with increased brand support, as we enhance value for consumers through active innovation and renovation, premiumisation, affordability and more nutritious options,” says Schneider.

“We will continue to focus capital allocation on our fast-growing billionaire brands, which enables us to deliver dependable growth while enhancing brand loyalty.”

The report also laid out Nestlé’s 2025 mid-term targets, which include mid single-digit organic sales growth and an underlying profit margin range of 17.5 per cent to 18.5 per cent, and an increase in underlying earnings per share in constant currency of between 6 per cent and 10 per cent.

“To drive market share gains, our key priorities are delighting consumers through differentiated offerings and focusing on superior execution,” Schneider says. “We are confident that we have the right strategy, portfolio and capabilities to deliver on our 2025 targets.”

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