Nestlé reports global results for H1 2023 and announces 8.7% organic growth

Nestlé, the largest food and beverage company in the world, announces the results for H1 2023, reporting that the total sales increased by 1.6% to CHF 46.3 billion (6M-2022: CHF 45.6 billion), the results being negatively impacted by the exchange rate (by 6.7%) and net acquisitions (by 0.4%). Organic growth reached 8.7%, with pricing of 9.5% and real internal growth (RIG) of – 0.8%. Growth was broad-based across geographies and categories. For 2023, a growth of organic sales between 7% to 8% is foreseen.

“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 optimization as well as the continued implementation of our sustainability initiatives, we are well-positioned to grow and to generate value for our stakeholders,” commented Mark Schneider, Nestlé CEO.

 Zone Europe

•  8.9% organic growth: – 2.4% RIG; 11.3% pricing.

Read more about Nestlé comes to Top Employers with paid internships and more! read more	Sales 6M-2023	Sales 6M-2022	RIG	Pricing	Organic growth
Zone Europe	CHF 9.5 bn	CHF 9.3 bn	– 2.4%	11.3%	8.9%

Organic growth was 8.9% with pricing of 11.3%. RIG was – 2.4%, following a high base of comparison in the last 2 years and portfolio optimization actions. Foreign exchange negatively impacted sales by 6.0%. Net divestitures reduced sales by 0.9%. Reported sales in Zone Europe increased by 2.0% to CHF 9.5 billion. Growth in Zone Europe was supported by pricing, strong sales development for e-commerce and a continued momentum for out-of-home channels. The Zone saw market share gains in pet food, Confectionery and Infant Nutrition. By product category, the key contributor to growth was Purina PetCare, driven by differentiated offerings across premium brands Felix, Gourmet and Purina ONE. Confectionery reported high single-digit growth, led by KitKat and seasonal products. Nestlé Professional posted double-digit growth. Coffee saw mid-single-digit growth, with particular strength for Nescafé soluble coffee and Starbucks products. Infant Nutrition recorded high single-digit growth, based on continued momentum for premium infant formula, particularly NAN. Culinary posted low single-digit growth, with improved sales developments for Maggi and Thomy.

Financial results for Nestlé Romania

“Nestlé Romania ended the first 6 months of the year with an organic growth of 19.2%, growth coming from all 10 divisions. During this period, we donated approximately 34 tons of products worth over 200,000 Euro to the Food Bank, and collaborated with 34 NGOs and student associations. We also continued our partnership with Junior Achievement and educational projects in schools, with the participation of over 80,000 children. I am glad to be part of a team that achieves such remarkable results and to whom I thank for all the efforts made so far. We want to continue at the same pace, both in business development and socially, to enjoy together the tenth consecutive year of growth”, says Silvia Sticlea, Country Manager Nestlé Romania.  

Business as a force for good: Eliminating deforestation from Nestlé’s palm oil supply chains

The company continues also at global level to accelerate its actions in sustainability and supporting the local communities where it operates. The European Union recently passed legislation that will ban the import of commodities linked to deforestation, including palm oil. Nestlé has worked for over a decade to address deforestation in its palm oil supply chains and in all other major supply chains. This strong foundation means the company is well placed to address the new law.

Traceability is key to preventing deforestation. As such, Nestlé sources from suppliers that can trace their palm oil all the way back to the plantation on which it was grown. Together with external partners, Nestlé assessed the company’s palm oil supply chains to be 95.6% deforestation-free at the end of 2022. Nestlé is vigilant in its efforts to maintain this level of performance. It works with experts and industry bodies to continually improve environmental and social practices, take action when risks or issues are identified, and invest in technology to stay ahead.

One such technology is Starling, a satellite-based system, which Nestlé uses to monitor its palm oil supply chains. Starling helps the company identify deforestation risks and cases around the mills from which it sources as well as deforestation patterns. This supports Nestlé in prioritizing actions on the ground, where they are most needed.

Nestlé also strives to include smallholder farmers in its supply chains, given that they represent 40% of the world’s palm oil supply. It recently helped launch a Smallholders Hub in Aceh that trains farmers on good agricultural practices and helps them increase their yields from existing farmland. This reduces the risk of encroachment into protected areas. Similar programs are being rolled out in other landscapes.

Nestlé is now going beyond deforestation to conserve and restore natural ecosystems, while also promoting sustainable livelihoods and respecting human rights. It was recognized for its work in this year’s Forest 500 report, coming in third for its efforts in tackling deforestation among companies exposed to the issue.

Palm oil is highly versatile. It requires four to ten times less land to produce the same amount of oil as other plants. Replacing it is not the answer – neither for the environment, nor for the millions of farmers whose livelihoods depend on it. That is why Nestlé goes ever further to make palm oil production truly sustainable, for both forests and communities.