Nestlé posts full-year organic sales growth of 8.3% driven by pricing

Nestlé has recorded full-year organic sales growth of 8.3%, driven by pricing in both developed and emerging markets.

The maker of Nescafé coffee and Milkybar raised prices by 8.2% last year in response to cost inflation, which “surged to unprecedented levels”.

In 2022, the packaged food giant’s reported sales increased 8.4% to CHF 94.42 billion ($102.4 billion approx.), compared with the prior year’s CHF 87.1 billion ($94.3 billion) figure.

Nestlé’s full-year net profit missed analyst expectations, decreasing by 45.2% to CHF 9.3 billion (approx. $10.1 billion).

For 2022, Nestlé recorded sales of CHF 26.33 billion (approx. $28.56 billion) in its Zone North America, representing organic growth of 10.3%. The zone saw continued market share gains, led by pet food, portioned coffee and baby food.

The business witnessed 7.2% organic sales growth in its Zone Europe to CHF 19.13 billion ($20.7 billion approx.). According to the company, the zone “demonstrated resilience and a commitment to invest for the long term. In Ukraine, Nestlé announced a CHF 40 million (approx. $43.3 million) investment for a new production facility in the Volyn region.”

In Europe, foreign exchange negatively impacted sales by 7.6%, reflecting the appreciation of the Swiss franc against the euro.

Sales in Nestlé’s Zone Asia, Oceania and Africa grew 8.2% on an organic basis. Zone Latin America and Zone Greater China saw organic growth of 13.1% and 3.5%, respectively.

Nestlé CEO, Mark Schneider, said: “Last year brought many challenges and tough choices for families, communities and businesses. Inflation surged to unprecedented levels, cost-of-living pressures intensified, and the effects of geopolitical tensions were felt around the world…Organic growth was solid, margins continued to be resilient, and our underlying earnings per share development was strong. At the same time, we ensured access to nutritious products and affordable offerings globally.”

“During 2022, we also confirmed our longstanding nutrition strategy, with ‘good for you, good for the planet’ at its heart. We took important actions to further strengthen our industry-leading responsible marketing practices and to provide transparency on the nutritional value of our global portfolio. At the same time, we also advanced the implementation of our climate roadmap.”

He continued: “Looking to 2023, we expect another year of robust organic growth, with a focus on restoring our gross margin, stepping up marketing investments and increasing free cash flow. Nestlé’s value creation model puts us in a strong position to achieve our 2025 targets and to generate reliable, sustainable shareholder returns.”