Nestlé achieves six-month results upturn, with confectionery recording high single-digit growth
Nestlé has released its latest half-year figures, which record an upturn in performance driven by growth in sales, including within confectionery led by its flagship KitKat brand, continuing to bolster its results, reports Neill Barston.
Group sales for the period stood at CHF 46.3 billion, up 1.6% on the same period in 2022, which the company attributed to a focused approach on its market strategies, with post-covid consumer buying patterns continuing to stabilise.
According to the company, which will be represented at this year’s World Confectionery Conference in Harrogate, Yorkshire, on 5 October, by ingredients advisor John Newell, its organic growth also grew by 8.7% for the first six months of 2023, which was influenced by pricing increases put at 9.5%, amid a backdrop of high global inflation rates with increased ingredients sourcing costs, and supply chain issues stemming from the ongoing war in Ukraine.
Notably, sales for its confectionery interests stood at CHF 3.69 billion, up year-on-year from CHF 3.59 billion last year, with its confectionery interests, including KitKat in Europe, performing particularly well, achieving high single-digit growth.
Significantly, the company highlighted its positive environmental action, noting EU legislation that will ban the import of commodities such as cocoa and palm oil, linked to deforestation. The business stated that it had worked for more than decade to address deforestation in its major supply chains, and asserted that it was in a strong position to respond to the soon to be formalised European laws.
Consequently, the company said its supply chains for palm oil supply chains stood at 95.6% deforestation-free by the end of 2022, with technology breakthroughs proving instrumental in achieving this figure. It cited the example of Starling, a satellite-based system, which the business uses to monitor its palm oil supply chains. This helps the company identify deforestation risks and cases around the mills from which it sources as well as deforestation patterns. This supports Nestlé in prioritising actions on the ground, where they are most needed.
Citing a further example, it mentioned the case of the Aceh and Riau provinces of Indonesia, for example, Nestlé collaborates with partners to drive sustainable production, forest conservation as well as good social and labor practices. It works with the government on integrated land use planning and supports a “No Deforestation, No Peatland, No Exploitation” policy. Based on new information from satellite monitoring, the company recently expanded the scope of this work to include the East Kalimantan province.
Mark Schneider, Nestlé CEO, welcomed the Swiss-headquartered firm’s upturn in results. He said: “We pursued our strategic priorities with discipline and focus in a fast-evolving consumer environment. Based on the strong performance in the first half of the year we upgrade our organic sales growth outlook for 2023. At-home consumption post-COVID has now normalized, removing a growth drag on some of our categories. Out-of-home channels continue to see strong growth momentum.
For the remainder of the year, we are confident that we will deliver a positive combination of volume and mix, an improvement in gross margin and a significant increase in marketing investments. Combined with ongoing portfolio management and optimisation as well as the continued implementation of our sustainability initiatives, we are well-positioned to grow and to generate value for our stakeholders.”