Nestlé improves organic sales outlook after strong first-half results

The Kit Kat maker said organic sales during the period rose 8.7%, beating the average estimate for 8.1% growth, according to a company-provided analyst consensus. By product category confectionery reported double-digit growth, fueled by strong momentum for KitKat, particularly in the South-East Asia market, while cocoa and malt beverages posted low single-digit growth, supported by Milo powder and ready-to-drink products. Nestle said it is narrowing its full-year organic sales growth guidance - which does not include the impact of currency movements and acquisitions - to a range of 7%-8% from a range of 6-8%. Mark Schneider, Nestlé CEO, said: “ We pursued our strategic priorities with discipline and focus in a fast-evolving consumer environment. Based on the strong performance in the first half of the year we upgrade our organic sales growth outlook for 2023. At-home consumption post-COVID has now normalised, removing a growth drag on some of our categories. Out-of-home channels continue to see strong growth momentum. “For the remainder of the year, we are confident that we will deliver a positive combination of volume and mix, an improvement in gross margin and a significant increase in marketing investments. Combined with ongoing portfolio management and optimization as well as the continued implementation of our sustainability initiatives, we are well-positioned to grow and to generate value for our stakeholders .” Reuters reported Nestlé’s 9.5% price increases were ahead of the average analyst estimate of 8.7%. Real internal growth - or sales volumes - fell 0.8% versus expectations of a 0.6% decline. Sustainability The European Union recently passed legislation that will ban the import of commodities linked to deforestation , including cocoa and palm oil. Nestlé said it has worked for over a decade to address deforestation in its palm oil supply chains and in all other major supply chains. This strong foundation means the company is well-placed to address the new law. Traceability is key to preventing deforestation. As such, Nestlé sources from suppliers that can trace their palm oil all the way back to the farm on which it was grown. Together with external partners, Nestlé assessed the company’s palm oil supply chains to be 95.6% deforestation-free at the end of 2022. In its statement the company said it also strives to include smallholder farmers in its supply chains, given that they represent 40% of the world’s palm oil supply and Nestlé is now going beyond deforestation to conserve and restore natural ecosystems, while also promoting sustainable livelihoods and respecting human rights. It was recognised for its work in this year’s Forest 500 report, coming in third for its efforts in tackling deforestation among companies exposed to the issue.

Nestlé improves organic sales outlook after strong first-half results

Nestlé has reported better-than-expected first-half organic sales in its half-year results for 2023 and said it improved its full-year organic sales outlook after raising prices to cope with higher production costs.

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