Nestle’s Sales Decline in 2023 Due to High Food Prices

Nestle, the Switzerland-based food company, has announced its financial results for the year 2023. The company’s sales experienced a 1.5% decline last year, reaching 93 billion Swiss francs (106.2 billion dollars), influenced by the impact of high food prices.

Reported by Bahattin Gönültaş, the company’s sales figure fell slightly below analysts’ expectations, who anticipated sales of 93.68 billion Swiss francs.

Despite the decline in sales, Nestle’s net profit increased by 20% compared to the previous year, reaching 11.2 billion Swiss francs (12.8 billion dollars). This growth was attributed to lower valuation of tangible assets and the impact of taxes.

Excluding the effects of currency exchange rates and acquisitions, Nestle’s organic sales grew by 7.2% last year, slightly below analysts’ expectations of a 7.4% increase in organic growth.

Following the announcement of the financial results, Nestle’s shares experienced a decline of over 3.2% in the morning hours.

Nestle revealed its plans to increase the dividend payment per share from 2.95 Swiss francs to 3 Swiss francs. The company distributed 12.8 billion Swiss francs to shareholders last year through a combination of dividends and share buybacks.

The packaged food products sector has been notable for implementing higher prices for over two years, citing the COVID-19 pandemic and the escalating Ukraine-Russia conflict as reasons for increased input costs. The impact of high prices has been detrimental to global food supply chains, leading to an increase in consumer spending on food.

However, in response to consumer demands for more affordable alternatives for essential food products like yogurt and coffee, Nestle and one of the world’s largest food companies, Danone, announced plans to slow down price increases this year after two years of rising costs.

source: / prepared by Melisa Beğiç

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