Nestlé (NESN) Q3 2024 TU earnings summary

Executive summary

• Organic growth reached 2.0% for the first nine months, led by coffee, pet care, and confectionery, despite softening consumer demand and inventory reductions.

• Real internal growth was 0.5%, with pricing normalizing after significant increases in prior years.

• Total reported sales declined by 2.4% to CHF 67.1 billion, mainly due to negative foreign exchange and minor divestitures.

• Market share for major brands remained stable, but overall group market share was broadly flat.

• CEO transition and organizational restructuring underway, reducing zones from five to three and elevating digitalization and sustainability to report directly to the CEO.

Financial highlights

• Organic growth for the nine months was 2.0%, with 0.5% real internal growth and 1.6% pricing.

• Reported sales for 9M-2024 were CHF 67.1bn, down from CHF 68.8bn in 9M-2023, reflecting a -2.4% reported sales growth due to negative FX and M&A.

• E-commerce sales grew organically by 9.7%, now 18.5% of total sales.

• Underlying Trading Operating Profit margin expected at around 17% for the full year, slightly down year-on-year.

• Underlying EPS growth in constant currency expected to be broadly flat year-on-year.

Outlook and guidance

• Full-year organic growth expected to be around 2%, reflecting current trading and further inventory reductions in Q4.

• Underlying Trading Operating Profit margin guided at around 17%.

• Underlying EPS in constant currency expected to be flat year-on-year.

• FX expected to have a negative 4% effect on group sales for full year 2024.

• 2025 guidance to be provided at full-year results in February.