Nestlé headquarters at lake GenevaNestlé headquarters at lake Geneva
  • Nestlé Announces Strong Performance in Full-Year Results for 2023
  • Organic growth hits 7.2%, with an increase in underlying earnings per share and consistent dividend growth.

Vevey, Switzerland – Nestlé, the world’s largest food and beverage company, Thursday released its full-year results for 2023, demonstrating robust performance across various financial metrics.

The company achieved an organic growth of 7.2%, driven by a pricing increase of 7.5%, although real internal growth (RIG) was slightly negative at -0.3%. This growth was well-distributed across different geographies and product categories, underscoring the company’s broad market appeal and adaptability.

Despite a challenging global economic environment, Nestlé reported total sales of CHF 93.0 billion, marking a slight decrease of 1.5% from CHF 94.4 billion in 2022. The decline in sales was largely attributed to foreign exchange impacts, which reduced sales by 7.8%, and net divestitures, contributing a 0.9% negative impact.

The company’s underlying trading operating profit (UTOP) margin improved, reaching 17.3%, an increase of 20 basis points on a reported basis and 40 basis points in constant currency. The trading operating profit (TOP) margin also saw a significant rise to 15.6%, up by 160 basis points.

A key highlight of the financial results is the growth in underlying earnings per share, which rose by 8.4% in constant currency and a marginal 0.1% on a reported basis, reaching CHF 4.80. The reported earnings per share also saw a substantial increase of 23.7% to CHF 4.24, largely due to one-off items in the previous year.

Nestlé also reported a significant increase in free cash flow, which reached CHF 10.4 billion, up by CHF 3.8 billion, following a considerable reduction in working capital.

In line with its tradition of rewarding shareholders, Nestlé’s Board proposed a dividend of CHF 3.00 per share, marking a 5 centimes increase and 29 consecutive years of dividend growth. In 2023, the company returned CHF 12.8 billion to shareholders through dividends and share buybacks.

Looking forward to 2024, Nestlé anticipates organic sales growth around 4% and a moderate increase in the underlying trading operating profit margin. The company expects underlying earnings per share in constant currency to rise between 6% and 10%.

Furthermore, Nestlé has reaffirmed its mid-term targets for 2025, aiming for mid single-digit organic sales growth and an underlying trading operating profit margin range of 17.5% to 18.5%. The company also expects a 6% to 10% increase in underlying earnings per share in constant currency.

Nestlé’s robust performance in 2023, marked by solid growth in key financial indicators, reflects its strong market position and strategic agility. The company’s positive outlook and mid-term targets for 2024 and 2025 indicate continued confidence in its business model and growth potential.

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By Lisa Luckas

Lisa Luckas is a Sr. Business News Editor at Nobot.News.

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