16 February 2023
If you are covering Nestle’s latest results, please find below a comment from Chris Beckett, head of equity research at Quilter Cheviot:
“Nestle posted relatively good full year results this morning, with sales up +8%, earnings up +9% and dividend up +5% - as would be expected from such a large, diverse, and reliable company.
“Nestle has benefited from the post covid pandemic normalisation of out of home sales, and has increased prices to recover rising costs.
“However, Q4 2022 was a disappointment, with sales around 1% behind expectations at +7.5%. Nestle is still taking pricing up by +10%, but is experiencing a larger volume impact of -2.6%.
“The weakness is understandably coming from China, but North American, confectionery and health science weakness is more worrying. The cost-of-living crisis has now well and truly started to bite, and consumers are potentially starting to be turned off by raised prices.
“Despite a disappointing Q4, the guidance for 2023 remains solid with 6-8% sales growth, and 6-10% earnings with modest margin improvement.”
