Nestlé has hailed a “solid” performance in 2024, with slightly better-than-expected sales growth in the final quarter as the Kit Kat and Nescafé owner hiked the price of coffee and chocolate amid surging commodity costs.
The group registered organic sales growth of 2.7% in the final three months of the year, higher than analyst estimates of 2%. However, growth for the full year came in at just 2.2%.
Analysts had feared the Swiss food giant, which is attempting to turn around its performance following a disappointing few years, could scrap its margin guidance of 16% for 2025, but Nestlé maintained the forecast for at least that figure as it invested for growth. However, it is a drop from the 17.2% recorded in 2024.
It also expected organic sales growth to improve on the 2024 performance.
Shares in Nestlé soared 6.2% to CHF83.68 thanks to the results, and are now up 12% so far this year.
Growth in 2024 was made up of 0.8% real internal growth (RIG) – Nestlé’s measure of volumes – and 1.5% of pricing.
Revenues totalled CHF91.4bn (£80.4bn) for the year, down 1.8% on 2023’s CHF93bn after currency headwinds.
Nestlé pointed to steady momentum in 2024 as organic growth moved from 2.1% in the first half to 2.3% in the final six months.
It added growth was led by coffee, confectionery and petcare, with emerging markets and Europe driving the performance.
Underlying trading operating profits declined 2.2% to CHF15.7bn for the year.
Nestlé also proposed an increase in dividend to CHF3.05 per share.
CEO Laurent Freixe said: “In a challenging macroeconomic context and soft consumer environment, we achieved a solid performance in 2024 in line with our latest guidance.”
He added: “We have a clear roadmap to accelerate performance and transform for the future. Increasing investment to drive growth is central to our plan. This means delivering superior product taste and quality with unbeatable value, scaling our winning platforms and brands, accelerating the rollout of our innovation ‘big bets’ and addressing underperformers.”
Nestlé had already made “good progress” on its CHF2.5bn three-year cost savings programme, Freixe said, with more than CHF300m secured for 2025.
“From 2025, we expect our actions to drive an improvement in organic sales growth, with a lower underlying trading operating profit margin in the short term as we invest for growth. While there is macroeconomic uncertainty, we have lots of opportunities ahead of us, and we have the strategy, the resources and the people and team to deliver.”
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