22 February 2024
If you are covering Nestle’s results, please see the following comment from Matthew Dorset, equity research analyst at Quilter Cheviot:
“Nestle’s results left a bitter taste in the mouths of investors this morning with the share price responding negatively, as the Swiss food giant missed Q4 expectations and gave a lukewarm outlook for 2024.
“Despite delivering solid organic growth across regions and segments, Nestle failed to impress the market with its weak volume performance, which dipped into negative territory for the full year.
“However, Nestle is confident that it can turn things around and boost its volumes next year, which will support growth as pricing eases.
“Latin America was the star performer for Nestle, with a whopping 9.3% organic sales growth in 2023, driven by strong demand for its dairy, coffee, and culinary products. China and North America, on the other hand, were the laggards, with 4.5% and 6.6% organic sales growth respectively, weighed down by competitive pressures and supply chain disruptions.
“Nestle’s petcare and confectionery segments were the sweet spots, thanks to the popularity of its premium brands such as Felix and Gourmet, as well as the iconic KitKat, which gained market share globally.
“Looking ahead, Nestle is aiming for a modest 4% organic sales growth in 2024, below the market consensus of 4.7%, and a slight improvement in margin. It also expects to grow its underlying earnings per share by 6% to 10%. Nestle reaffirmed its 2025 mid-term targets, signalling its confidence in its long-term strategy and innovation pipeline.”
