Nestlé Lowers Full-Year Sales Forecast
Source: DairyNews.today
Nestlé, the global food and beverage giant, has revised its full-year sales forecast downward as part of its latest financial update released on October 17. The company now projects organic sales growth for 2024 to be around 2%, a decrease from its previous forecast of at least 3% announced in July.
For the first nine months of 2024, Nestlé reported organic growth of 2%, with pricing contributing 1.6%. Total sales for the period amounted to CHF 67.1 billion (€71.5 billion), reflecting a 2.4% decline compared to the same period in 2023. The company attributed the weaker performance to softening consumer demand and actions taken in the third quarter to reduce customer inventories.
Nestlé also adjusted its profitability outlook, with the underlying trading operating profit margin for 2024 expected to be around 17%. Additionally, earnings per share growth in constant currency is anticipated to remain "broadly flat."
Organizational Changes and Strategic Initiatives
In conjunction with the financial update, Nestlé confirmed significant changes to its corporate structure, effective January 1, 2025. The company’s board of directors has approved a reorganization that includes changes to the executive board.
Laurent Freixe, who assumed the role of Chief Executive Officer in September, highlighted that the new structure will streamline decision-making processes and enhance operational efficiency. “A leaner executive board structure will increase simplicity, speed up decision-making, and strengthen the momentum behind global initiatives,” Freixe said, expressing confidence that these changes will better position the company for future success.
Freixe emphasized that, with the reorganization, all leaders of key performance-driving units will report directly to him, allowing Nestlé to sharpen its focus on consumers and customers while investing more in its brands and innovation to expand market share and boost performance.
Focus on Digital Transformation and Market Strategy
Freixe also underscored Nestlé’s commitment to digital transformation, with a goal of creating a real-time, connected, data- and AI-driven organization. "Going forward, we are placing greater emphasis on Nestlé’s digital transformation into a real-time, end-to-end connected, data- and AI-powered organization," Freixe said.
Despite the challenging market environment, Freixe remains optimistic about Nestlé’s competitive position. He pointed to the company’s global scale, iconic brands, and innovative products as core strengths. "Nestlé is uniquely positioned to win in our industry. Building on this strong foundation, we will sharpen our focus on consumers and customers and advance our categories to accelerate performance and gain market share," he added.
Looking ahead, Freixe reiterated the importance of investing in Nestlé’s brands and digital capabilities to enhance market agility and efficiency, positioning the company for continued growth amidst a softening demand environment.
Nestlé also adjusted its profitability outlook, with the underlying trading operating profit margin for 2024 expected to be around 17%. Additionally, earnings per share growth in constant currency is anticipated to remain "broadly flat."
Organizational Changes and Strategic Initiatives
In conjunction with the financial update, Nestlé confirmed significant changes to its corporate structure, effective January 1, 2025. The company’s board of directors has approved a reorganization that includes changes to the executive board.
Laurent Freixe, who assumed the role of Chief Executive Officer in September, highlighted that the new structure will streamline decision-making processes and enhance operational efficiency. “A leaner executive board structure will increase simplicity, speed up decision-making, and strengthen the momentum behind global initiatives,” Freixe said, expressing confidence that these changes will better position the company for future success.
Freixe emphasized that, with the reorganization, all leaders of key performance-driving units will report directly to him, allowing Nestlé to sharpen its focus on consumers and customers while investing more in its brands and innovation to expand market share and boost performance.
Focus on Digital Transformation and Market Strategy
Freixe also underscored Nestlé’s commitment to digital transformation, with a goal of creating a real-time, connected, data- and AI-driven organization. "Going forward, we are placing greater emphasis on Nestlé’s digital transformation into a real-time, end-to-end connected, data- and AI-powered organization," Freixe said.
Despite the challenging market environment, Freixe remains optimistic about Nestlé’s competitive position. He pointed to the company’s global scale, iconic brands, and innovative products as core strengths. "Nestlé is uniquely positioned to win in our industry. Building on this strong foundation, we will sharpen our focus on consumers and customers and advance our categories to accelerate performance and gain market share," he added.
Looking ahead, Freixe reiterated the importance of investing in Nestlé’s brands and digital capabilities to enhance market agility and efficiency, positioning the company for continued growth amidst a softening demand environment.