In a release to the media, the KitKat maker said it was the highest nine-month rise (cutting the impact of currency movements and acquisitions) since 2008 and was driven by higher prices aimed at offsetting rising costs.
Mark Schneider, Nestlé CEO, said:" We delivered strong organic growth as we continued to adjust prices responsibly to reflect inflation. The challenging economic environment is a concern for many people and is impacting their purchasing power. That's why we aim to keep products affordable and accessible while considering the interests of all our stakeholders.’’
Analyst Jon Cox of Kepler Cheuvreux told Reuters that growing organic sales was a "decent" result for the company given the continued price increases even if third-quarter volumes dipped.
For the nine months to end-September, Nestle posted sales of 69.1 billion Swiss francs ($69.4 billion), beating the 68.9 billion francs forecast.
Most of the organic growth increase came from higher pricing, accounting for 7.5 percentage points of the 8.5% increase, while volumes increased by 1 percentage point over the period.
As a result Nestle raised its full-year outlook, saying it now expected organic growth of "around 8%" for 2022, up from a 7% to 8% increase previously.
The Vevey-headquartered company also confirmed its target for a trading operating profit margin of approximately 17% and raised its full-year guidance.
“Our real internal growth remained resilient despite a high base of comparison and continued supply chain constraints, with limited demand elasticity. At the same time, we continue to invest in R&D, marketing and sustainability initiatives, as demonstrated by the recent launch of our Nescafé Plan 2030. We remain confident in the strength of our brands, operational execution and underlying category dynamics which position us well for future growth," said Schneider.
- Organic growth reached 8.5%. Pricing was 7.5%, reflecting significant cost inflation. Real internal growth (RIG) was resilient at 1.0%. Organic growth was broad-based across most geographies and categories.
- Total reported sales increased by 9.2% to CHF 69.1 billion (9M-2021: CHF 63.3 billion). Net acquisitions had a positive impact of 1.2%. Foreign exchange decreased sales by 0.6%.
- Portfolio management on track. In the third quarter, Nestlé Health Science completed the acquisitions of Puravida in Brazil and The Better Health Company in New Zealand.
- Full-year 2022 outlook updated: we now expect organic sales growth around 8%. The underlying trading operating profit margin is expected around 17.0%. Underlying earnings per share in constant currency and capital efficiency are expected to increase.