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Nestlé posts 8.1% organic sales growth driven by price increases
Rafaela Sousa

Rafaela Sousa

3 August 2022

Nestlé posts 8.1% organic sales growth driven by price increases

Nestlé has posted organic sales growth of 8.1% for the first half of 2022, after its results were boosted by higher prices. The company raised prices by 6.5% to "reflect significant and unprecedented cost inflation," while it says real internal growth (RIG) was "resilient" at 1.7%. In H1, the company’s total reported sales increased by 9.2% to CHF 45.58 billion (approx. $47.42 billion). By product category, Purina PetCare was the biggest contributor to organic growth. Meanwhile, sales of coffee rose at a high-single-digit rate, supported by a strong recovery of out-of-home channels. The company has just opened a $340 million Nescafé facility in Veracruz, Mexico. Nestlé's vegetarian and plant-based food offering continued to see double-digit organic sales growth, led by the Garden Gourmet brand, while the company's confectionery and water businesses also recorded double-digit growth. Meanwhile, growth in infant nutrition reached a high-single-digit rate, and dairy saw mid-single-digit growth. Prepared dishes and cooking aids posted low-single-digit growth. Nestlé Health Science's sales grew by 6.6% on an organic basis. Earlier this year, the unit agreed to acquire Brazilian nutrition and health lifestyle brand, Puravida, in a move to expand Nestlé's consumer health portfolio in Latin America. By channel, organic growth in retail sales remained strong at 6.7%. Meanwhile, organic growth in out-of-home channels reached 29.6%. Nestlé’s Zone North America unit posted a 6.8% rise in sales to CHF 12.14 billion (approx. $12.64 billion). On an organic basis, sales grew 9.6%. The business's Europe unit recorded organic sales growth of 7.1%, reflecting increased pricing, further recovery of out-of-home channels and innovation. On an organic basis, sales grew by 8.2% in Nestlé’s Zone Asia, Oceania and Africa (AOA); 13.6% in Zone Latin America; and 2.3% in Zone Greater China. The food giant expects full-year organic sales growth in the region of 7-8%. Nestlé CEO Mark Schneider said: “In the first half of the year, we delivered strong organic growth and a significant increase in underlying earnings per share. Our local teams implemented price increases in a responsible manner. Volume and product mix were resilient, based on our strong brands, differentiated offerings and leading market positions. We limited the impact of unprecedented inflationary pressures and supply chain constraints on our margin development through disciplined cost control and operational efficiencies. At the same time, investments behind capital expenditure, digitalisation and sustainability increased significantly."

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