Nestlé’s latest nine-month results show sales upturn driven by price rises

Nestlé has released its latest nine-month results, with a key upturn in growth despite challenging markets being driven by an increased pricing strategy, including for its core KitKat flagship confectionery brand, reports Neill Barston.

According to the company’s latest figures, total sales rose 9.2% to reach CHF 69.1 billion for the period, with growth put at 8.5% for the business, with its operations around the world reporting encouraging conditions.

Confectionery sales for the first nine months of its financial calendar totalled CHF 5.6 billion, up from CHF 5.1 billion against the same time-frame last year, as its product category reportedly saw double-digit rises overall, against a policy of portfolio price rises put at 7.5% to counter wider cost and inflation within global economies that has seen pressure on ingredients, labour and logistics increase notably within 2022.

This has in part been attributed to the ongoing war in Ukraine, though ongoing impacts of the pandemic have also contributed to further market challenges across the food and drink supply chain, with product manufacturers enduring a challenging period.

Despite such tests, Nestlé, which presently operates in 186 countries, has just been recognised by Fortune and Great Place to Work as one of the top 25 workplaces among multinational companies. The annual list is determined each year based on employee surveys around the world, with companies assessed on their working environment, as well as support for wider communities. In the wake of the company’s latest results, anticipated sales growth figures are now projected at 8%, with operating profit margins of around 17%.

Mark Schneider, Nestlé CEO, commented: “We delivered strong organic growth as we continued to adjust prices responsibly to reflect inflation. The challenging economic environment is a concern for many people and is impacting their purchasing power. That’s why we aim to keep products affordable and accessible while considering the interests of all our stakeholders. Our real internal growth remained resilient despite a high base of comparison and continued supply chain constraints, with limited demand elasticity. At the same time, we continue to invest in R&D, marketing and sustainability initiatives, as demonstrated by the recent launch of our Nescafé Plan 2030. We remain confident in the strength of our brands, operational execution and underlying category dynamics which position us well for future growth.”