Nestlé confirms price rises amid strong half-year performance figures
Nestlé is the latest of the ‘big six’ confectionery groups to reveal its half-year figures, with total sales increasing by 9.2% for the period, to CHF45.6 billion, as the business notes price increases of 6.5% for its ranges, writes Neill Barston.
The company confirmed that its increased sales were boosted by category leading products including KitKat, which reported a double-digit pattern of growth for the first financial half of the year.
This year has been a particularly notable one for the company’s confectionery interests, with its renowned Smarties brand marking its 85th birthday, a continual range of new flavours for its KitKat series, as well as the brand offering a debut for its first Nescafe coating for its ice cream.
Price increases were most notable in the US, rising 9.8% across North America, while this was almost half in Europe (4,9%) and 9.6% registered in Latin America. As previously reported, the company was forced to temporarily close its manufacturing facilities in Ukraine, amid the ongoing conflict with Russia.
According to the business, organic growth was recorded at 8.1%, with acquisitions across the business producing a positive impact on its results, with an underlying trading operating profit (UTOP) margin was 16.9%.
Consequently, the company updated its full-year 2022 outlook, anticipating organic sales growth between 7% and 8%. The underlying trading operating profit margin is now expected around 17.0%.
Mark Schneider, Nestlé CEO, welcomed the latest performance results: “In the first half of the year, we delivered strong organic growth and a significant increase in underlying earnings per share. Our local teams implemented price increases in a responsible manner. Volume and product mix were resilient, based on our strong brands, differentiated offerings and leading market positions. We limited the impact of unprecedented inflationary pressures and supply chain constraints on our margin development through disciplined cost control and operational efficiencies. At the same time, investments behind capital expenditure, digitalisation and sustainability increased significantly.