VEVEY, Switzerland – Nestlé reported today nine-month sales for 2023 missing expectations. The Swiss multinational company’s 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. Analysts had on average expected organic sales growth of 8.1%.
Total reported sales decreased by 0.4% to CHF 68.8 billion, or about US$76.5 billion (9M-2022: CHF 69.1 billion). Foreign exchange decreased sales by 7.4%.
Net acquisitions had a negative impact of 0.8%. 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.
Nestle confirmed its full-year outlook of 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.”
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.
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%.
In Zone North America, the beverages category, including Starbucks products, Coffee mate and Nescafé, posted mid single-digit growth.
In Zone Europe, coffee saw mid single-digit growth, with particular strength for Nescafé. In September, the Zone launched Nescafé Dolce Gusto Neo paper-based pods in France and Switzerland.
Zone Asia, Oceania and Africa (AOA) saw market share gains in coffee, cocoa and malt beverages as well as chocolate.
Coffee posted high single-digit growth, with robust demand for Nescafé and Starbucks products and strong commercial execution
Middle East and Africa saw double-digit growth, with particular strength for affordable offerings in culinary, Infant Nutrition and coffee.
In Zone Latin America, coffee reported broad-based double-digit growth, supported by Nescafé soluble coffee. Sales for Nestlé Professional grew at a strong double-digit rate, with continued strength for branded coffee solutions.
Brazil posted strong double-digit growth, with continued momentum for confectionery, Infant Nutrition and beverages, including Nescafé and Nescau. Mexico reported high single-digit growth, with strong sales developments for dairy, coffee and Nestlé Professional.
In Zone Greater China, coffee reported low single-digit growth, supported by ready-to-drink offerings.
Nespresso’s organic growth was 5.2%, with pricing of 3.5%. RIG was 1.6%, reaching 3.5% in the third quarter. Foreign exchange negatively impacted sales by 5.7%. Reported sales in Nespresso decreased by 1.2% to CHF 4.6 billion.
The key growth contributor was the Vertuo system, which continued to see broad-based momentum. Growth in out-of-home channels was also strong, with further adoption of the Momento system, particularly in the office segment.
Innovation continued to resonate with consumers, following the launch of home compostable coffee capsules in France and Switzerland.
By geography, North America posted double-digit growth, with continued market share gains. Europe reported positive growth. Other regions combined saw low single-digit growth.
