Vending

Nestle lifts Q1 2023 sales boosted by price hikes

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April 25, 2023

Nestlé SA lifted its Q1 2023 sales lifted by pricing, according to a financial report. Highlights include:

• Total sales increased by 5.6% from 22.2 billion Swiss francs ($24.89 billion) in Q1 2022 to 23.5 billion Swiss francs ($26.48 billion) in Q1 2023. Foreign exchange decreased sales by 4%. Net acquisitions had a positive impact of 0.3%.
• Organic growth was 9.3% while pricing rose 9.8%, reflecting significant cost inflation. Real internal growth was -0.5%, impacted by capacity constraints and portfolio optimization actions.
• Growth was broad-based across most geographies and categories. Organic growth was 8.6% in developed markets, led by pricing. Organic growth in emerging markets was 10.3%, driven by pricing and positive real internal growth.
• By product category, Purina PetCare was the largest contributor to organic growth, fueled by strong momentum for science-based and premium brands Purina One, Purina Pro Plan and Friskies.
• Coffee saw high single-digit growth, with positive sales developments for Nescafé, Starbucks and Nespresso.
• Sales in confectionery grew at a double-digit rate, with strong growth for KitKat and seasonal products.
• Growth in infant nutrition reached a double-digit rate, with broad-based contributions across geographies and segments.
• Dairy reported high single-digit growth, with strong demand for coffee creamers and affordable fortified milks.
• Prepared dishes and cooking aids posted high single-digit growth, led by Maggi, Stouffers and Hot Pockets.
• Nestlé Health Science recorded low single-digit growth, with continued strong demand for medical nutrition and a positive sales development for active nutrition.
• Despite temporary capacity constraints for Perrier, water posted low single-digit growth led by S.Pellegrino.
• Zone North America organic growth was 11.6%, with pricing of 12.4%.
• Zone Europe organic growth was 9.7%, with pricing of 10.7%.
• Zone Asia, Oceania and Africa organic growth reached 10.4%, with pricing of 9.1%.
• Zone Latin America organic growth was 12.8%, with pricing of 13.4% and real internal growth of -0.6%.
• Zone Greater China organic growth was 3.1%, with pricing of 3.9%.
• Zone Nestle Health organic growth was 2.8%, with pricing of 5% and real internal growth of -2.2%.
• Nespresso organic growth was 2.9%, with pricing of 4%.

Shares traded today at $129.37 against a 52-week range of $102.78-$130.65.

"Nestlé delivered strong organic growth in the first quarter, as our teams worked diligently to protect volume and ensure resilient mix," Mark Schneider, CEO at Nestlé SA, said in the press release. "Portfolio optimization efforts and responsible pricing helped to offset the ongoing pressures from two years of cost inflation."

The company expects 2023 organic sales growth between 6% and 8% and underlying trading operating profit margin between 17% and 17.5%. Underlying earnings per share in constant currency is expected to increase between 6% and 10%.