Oct 19, 2023 Vevey, Switzerland
- Organic growth reached 7.8%, with pricing of 8.4% and real internal growth (RIG) of -0.6%. Growth was broad-based across geographies and categories.
- Total reported sales decreased by 0.4% to CHF 68.8 billion (9M-2022: CHF 69.1 billion). Foreign exchange decreased sales by 7.4%. Net acquisitions had a negative impact of 0.8%.
- Portfolio management progressing. In the third quarter, Nestlé announced an agreement to acquire a majority stake in Grupo CRM, a premium chocolate company in Brazil. Nestlé also divested Palforzia, its peanut allergy treatment business, to Stallergenes Greer.
- Full-year 2023 outlook confirmed: we expect organic sales growth between 7% and 8% and underlying trading operating profit margin between 17.0% and 17.5%. Underlying earnings per share in constant currency is expected to increase between 6% and 10%.
Mark Schneider, Nestlé CEO, commented: “Our diversified portfolio and differentiated offerings helped us deliver strong organic growth in the first nine months of the year. Growth was driven by pricing as we continued to navigate historic inflation levels. The recovery of our volume and mix is underway. We are seeing the benefits of our portfolio optimization initiatives and increasing marketing investments behind our billionaire brands. These steps underpin our confidence that real internal growth, the sum of volume and mix, will turn positive in the second half of the year and again become the main driver of growth going forward.
At the same time, Nestlé has further strengthened its nutrition strategy and stepped-up its efforts to guide people towards a balanced diet. Actions include providing clear, front-of-pack portion guidance, transparency on the nutritional value of our products and leading marketing-to-children policies. We also set an ambitious target to grow the sales of our more nutritious products by CHF 20-25 billion by 2030.”
| Total Group | Zone North America | Zone Europe | Zone AOA | Zone Latin America | Zone Greater China | Nestlé Health Science | Nespresso | Other Businesses | |
|---|---|---|---|---|---|---|---|---|---|
| Sales 9M-2023 (CHF m) | 68 829 | 19 027 | 14 144 | 13 223 | 9 139 | 3 624 | 4 850 | 4 617 | 205 |
| Sales 9M-2022 (CHF m) | 69 132 | 19 093 | 13 968 | 13 899 | 8 648 | 3 843 | 4 811 | 4 674 | 196 |
| Real internal growth (RIG) | – 0.6% | – 0.9% | – 2.3% | 0.0% | – 0.6% | 2.3% | – 1.9% | 1.6% | 8.3% |
| Pricing | 8.4% | 8.9% | 11.1% | 8.6% | 10.5% | 2.6% | 4.4% | 3.5% | 1.5% |
| Organic growth | 7.8% | 8.0% | 8.8% | 8.6% | 10.0% | 4.9% | 2.5% | 5.2% | 9.8% |
| Net M&A | – 0.8% | – 2.2% | – 2.4% | – 0.1% | 0.0% | 0.1% | 3.8% | – 0.6% | 0.0% |
| Foreign exchange | – 7.4% | – 6.1% | – 5.2% | – 13.3% | – 4.3% | – 10.6% | – 5.9% | – 5.7% | – 5.1% |
| Reported sales growth | – 0.4% | – 0.3% | 1.3% | – 4.8% | 5.7% | – 5.7% | 0.5% | – 1.2% | 4.7% |
Group sales
Organic growth was 7.8%. Pricing was 8.4%, reflecting the impact of cost inflation over the last two years. RIG was – 0.6%, impacted by portfolio optimization and remaining capacity constraints. In the third quarter, RIG improved to – 0.3%, despite temporary capacity constraints for Perrier and a short-term supply constraint for vitamins, minerals and supplements, which surfaced in August.
Growth was broad-based across most geographies and categories. In developed markets, organic growth was 6.9%, led by pricing with negative RIG. In emerging markets, organic growth was 9.0%, driven by pricing and slightly positive RIG.
By product category, Purina PetCare was the largest contributor to organic growth, with strong momentum across all channels. Purina ONE, Purina Pro Plan and Felix all recorded double-digit growth. Coffee saw high single-digit growth, with positive sales developments across brands and channels. Starbucks products reported strong growth, supported by innovation and the launch of ready-to-drink offerings in South-East Asia and Oceania. Infant Nutrition posted high single-digit growth, with broad-based contributions across brands and geographies. Confectionery recorded double-digit growth, fueled by a strong sales development for KitKat. Dairy reported high single-digit growth, led by coffee creamers and affordable fortified milks. Prepared dishes and cooking aids posted mid single-digit growth, with strong demand for Maggi. Nestlé Health Science recorded low single-digit growth, as continued momentum for Medical Nutrition was partly offset by a sales decline in vitamins, minerals and supplements. Water posted low single-digit growth, impacted by temporary capacity constraints for Perrier.
By channel, organic growth in retail sales remained robust at 7.1%. E-commerce sales grew by 12.7%, reaching 16.6% of total Group sales. Organic growth of out-of-home channels was 15.7%.
Net divestitures decreased sales by 0.8%, largely related to the divestment of a majority stake in Freshly as well as the disposal of the Gerber Good Start infant formula brand. The impact on sales from foreign exchange was negative at 7.4%, following broad-based appreciation of the Swiss Franc. Total reported sales decreased by 0.4% to CHF 68.8 billion.
