Nestlé reports organic growth amid challenging pandemic conditions

Nestlé has reported a pattern of 2.8% organic growth in its six-month financial trading figures, yet despite a positive start to the year, its sales revenues fell for the period as the business adjusted to operating in testing pandemic conditions, reports Neill Barston.

The Swiss-headquartered company’s year-on-year sales for the first half of 2020 were CHF 41 billion, against CHF 45.5 billion for the first six months of last year, with confectionery figures standing at just under CHF 3 billion. This compared with CHF 3.5 billion for the same period in 2019.

While observers have noted a general increase in volumes of snacks sales during the coronavirus crisis, the out-of-home market, which remains a key element of the sweets sector, remains affected due to the widespread closure of many stores over the past few months, which are slowly returning to more regular trading patterns in many locations around the world.

Significantly, Nestlé’s underlying trading margins for the past six months improved by 17.4%, offering signs of a return to growth during the remainder of the financial year, as it continues its operations, including manufacturing brands such as KitKat. The company projected between 2-3% organic growth for the rest of 2020.

CEO of Nestlé, Mark Schneider, praised the efforts of employees during an especially challenging period for the food sector, as the business joined in a number of global efforts in tackling coronavirus conditions, including in key cocoa growing markets such as Ivory Coast.

He said: “Coronavirus continues to impact people around the world. We stand with all those affected and are committed to helping where we can. I would like to thank every member of the Nestlé team for their dedication and hard work in the face of incredible challenges. Our priorities remain the same; keeping our people safe, assuring continued supply of essential food and beverages to consumers and caring for our communities and business partners through financial and in-kind support.

“Nestlé has remained resilient in a rapidly changing environment, delivering solid organic growth and improved margins in the first half. These results demonstrate the agility of our business and the strength of our diversified portfolio across geographies, product categories and channels. With consumer behaviour evolving faster than ever, we are adapting to this new reality by strengthening our innovation, leveraging our digital capabilities and executing with speed. Our engaged teams and their commitment to deliver business results while driving progress against our societal and environmental commitments make us a stronger company every day.”

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