Nestlé Reports Robust Organic Growth and Proposes 15 Centimes Dividend Increase for 2023
By Nestlé, the world’s largest food group, has reported robust organic growth of 8.3% in 2022, driven by pricing in both developed and emerging markets.[0] Net acquisitions had a positive impact of 1.1%, while foreign exchange decreased sales by 0.9%.[1] Product categories such as Purina PetCare, infant nutrition, coffee, confectionery and dairy saw strong growth, with Purina PetCare being the largest contributor to organic growth.[2]
The company has targeted organic sales growth in a range of 6-8% for 2023.[3] At the AGM on April 20th, 2023, the Board of Directors intends to offer a dividend of CHF 2.95 per share, which would be a rise of 15 centimes.[4] Should it get the go-ahead, this will mark the 28th year in a row that the organization has raised its dividend.[5] For the last 63 years, the company has kept or grown its dividend in Swiss francs.[1]
Looking to 2023, the company will focus on restoring its gross margin, stepping up marketing investments and increasing free cash flow. CEO Mark Schneider added: “We expect another year of robust organic growth, with a focus on restoring our gross margin, stepping up marketing investments and increasing free cash flow. Nestlé’s value creation model puts us in a strong position to achieve our 2025 targets and to generate reliable, sustainable shareholder returns.”[4]
This year Nestle’s net profits fell to 9.3 billion Swiss francs ($135,230,564.46 CAD), while experts predicted 11.6 billion francs (168,674,682.56 CAD). Net profits at the company, headquartered in Switzerland and owning some of the world's largest food brands, dropped to 9.3 billion Swiss francs (£8.4 billion) in 2022, compared to 16.9 billion Swiss francs (£15.2 billion) in 2021.
Despite the challenging environment, Nestlé remains committed to increasing the dividend in Swiss francs every year and achieving their 2025 targets.[1] With a focus on restoring gross margin and increasing investments, the company is well-positioned to generate reliable and sustainable returns for shareholders.[2]
0. “Nestle plans price hikes after inflation eats into profits” CNBC, 16 Feb. 2023, https://www.cnbc.com/2023/02/16/nestle-plans-price-hikes-after-inflation-eats-into-profits.html
1. “Nestlé reports full-year results for 2022” Business Upturn, 16 Feb. 2023, https://www.businessupturn.com/brand-post/nestle-reports-full-year-results-for-2022/
2. “Nestle reveals tumbling net profits as prices hiked for shoppers” The Independent, 16 Feb. 2023, https://www.independent.co.uk/business/nestle-reveals-tumbling-net-profits-as-prices-hiked-for-shoppers-b2283493.html
3. “Nestle Planning to Increase Prices” 101.1 More FM, 16 Feb. 2023, https://www.101morefm.ca/news/local-news/nestle-planning-to-increase-prices
4. “Nestlé, sales rise but profit falls” EFA News – European Food Agency, 16 Feb. 2023, https://www.efanews.eu/item/29304-nestle-sales-rise-but-profit-falls.html
5. “Nestlé's full-year profit disappoints despite higher prices By Investing.com” Investing.com, 16 Feb. 2023, https://www.investing.com/news/stock-market-news/nestles-fullyear-profit-disappoints-despite-higher-prices-3005145
