Nestlé’s 2023 Performance: Strong Organic Growth Amidst Challenging Environment
In 2023, Nestlé showcased robust performance despite facing challenges from unprecedented inflation and supply disruptions. The company reported organic growth of 7.2%, driven by a pricing increase of 7.5%, partially offset by a real internal growth (RIG) of -0.3%. Total reported sales amounted to CHF 93.0 billion, marking a slight decrease from the previous year.
Factors such as foreign exchange fluctuations and net divestitures had adverse impacts on sales, with foreign exchange alone reducing sales by 7.8%. However, underlying trading operating profit (UTOP) margin saw improvement, reaching 17.3%, while trading operating profit (TOP) margin increased to 15.6%.
Earnings per share showed resilience, with underlying earnings per share rising by 8.4% in constant currency to CHF 4.80. Free cash flow surged to CHF 10.4 billion, driven by effective working capital management.
Notably, Nestlé continued its streak of dividend growth, proposing a dividend of CHF 3.00 per share, reflecting the company’s commitment to shareholder value. Furthermore, CHF 12.8 billion were returned to shareholders through dividends and share buybacks in 2023.
Looking ahead to 2024, Nestlé anticipates organic sales growth of around 4%, coupled with a moderate increase in the underlying trading operating profit margin. The company aims to maintain its focus on key strategies, including volume- and mix-led growth, increased brand support, and active innovation to enhance consumer value.
Despite challenges in the market, Nestlé remains confident in its ability to achieve its mid-term targets for 2025, including mid single-digit organic sales growth and an underlying trading operating profit margin range of 17.5% to 18.5%.
Mark Schneider, CEO of Nestlé, emphasized the company’s commitment to driving market share gains through differentiated offerings and superior execution. With a solid strategy, diverse portfolio, and strong capabilities, Nestlé aims to deliver sustainable growth and enhance brand loyalty in the years to come.
