A-Brands

Nestlé Nudges 2022 Sales Outlook Higher Again

By Steve Wynne-Jones
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Nestlé has nudged its 2022 sales outlook upwards, the world's largest packaged food company said ahead of an investor seminar this week.

The company said it now expected organic sales growth of 8% to 8.5%, up from an October forecast of around 8%, and an underlying trading operating profit margin of around 17.0%.

Underlying earnings per share in constant currency terms and capital efficiency are also expected to increase, it added.

'Significant Progress'

"We have made significant progress in recent years, accelerating organic growth, increasing margins and enhancing capital efficiency," commented Mark Schneider, Nestlé CEO. "Today, we outline our value creation model and targets for 2025 as we aim to deliver consistently in turbulent times."

Organic growth, which cuts out the impact of currency movements and acquisitions, was 8.5% in the nine months to the end of September, the highest since 2008.

Nestlé said it had decided to explore strategic options for peanut allergy treatment Palforzia following "slower than expected adoption" by patients and healthcare professionals. It expected the review to be completed in the first half of 2023.

Share Buyback

Nestlé confirmed it was aiming to repurchase CHF 20 billion (€20.34 billion) worth of shares from 2022 to 2024 and said it had already bought around CHF 9.7 billion worth.

The maker of KitKat chocolate and Nescafé coffee also reiterated its goal of increasing its dividend year on year in Swiss franc terms.

Nestlé shares were indicated 0.8% higher in pre-market activity.

"Nestlé is now looking to 2025 with strong self-confidence, as seen in the ambitious financial targets," Vontobel analyst Jean-Philippe Bertschy wrote in a note to clients, calling the stock a "must have".

"The higher end of the 17.5% to 18.5% margin range looks highly promising and exciting."


News by Reuters, edited by by ESM – your source for the latest A-Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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