Nestle S.A.: reports full-year results for 2022

Vevey / CH. (nsa) Swiss Nestle S.A. announced its financial results for the full year 2022. Highlights:

• Total reported sales increased by 8.4 percent to CHF 94.4 billion. Net acquisitions had a positive impact of 1.1 percent. Foreign exchange decreased sales by 0.9 percent.
• Organic growth reached 8.3 percent. Pricing was 8.2 percent, reflecting significant cost inflation. Real internal growth (RIG) was positive at 0.1 percent. Organic growth was broad-based across most geographies and categories.
• The underlying trading operating profit (UTOP) margin was 17.1 percent, decreasing by 30 basis points on a reported basis and by 40 basis points in constant currency. The trading operating profit (TOP) margin was unchanged at 14.0 percent.
• Underlying earnings per share increased by 9.4 percent in constant currency and by 8.4 percent on a reported basis to CHF 4.80. Earnings per share decreased by 43.5 percent to CHF 3.42 on a reported basis, mainly reflecting the 2021 gain on the disposal of L’Oréal shares.
• Free cash flow was CHF 6.6 billion, as working capital increased temporarily in the context of supply chain constraints and capital expenditure remained above historic trendlines.
• Board proposes a dividend of CHF 2.95 per share, an increase of 15 centimes, marking 28 consecutive years of dividend growth. In total, CHF 18.2 billion were returned to shareholders in 2022 through a combination of dividend and share buybacks.
• 2023 outlook: we expect organic sales growth between 6 percent and 8 percent and underlying trading operating profit margin between 17.0 percent and 17.5 percent. Underlying earnings per share in constant currency is expected to increase between 6 percent and 10 percent.
• 2025 targets fully confirmed: we expect sustainable mid single-digit organic sales growth and a return to an underlying trading operating profit margin range of 17.5 percent to 18.5 percent by 2025. We expect annual underlying earnings per share growth to be in the range of 6 percent to 10 percent in constant currency.

Chief Executive Mark Schneider commented: «Last year brought many challenges and tough choices for families, communities and businesses. Inflation surged to unprecedented levels, cost of living pressures intensified, and the effects of geopolitical tensions were felt around the world.

«The entire Nestlé team demonstrated dependability, as we navigated this difficult environment. Organic growth was solid, margins continued to be resilient, and our underlying earnings per share development was strong. At the same time, we ensured access to nutritious products and affordable offerings globally.

«During 2022, we also confirmed our longstanding nutrition strategy, with Good for You, Good for the Planet at its heart. We took important actions to further strengthen our industry-leading responsible marketing practices and to provide transparency on the nutritional value of our global portfolio. At the same time, we also advanced the implementation of our climate roadmap.

«Looking to 2023, we expect another year of robust organic growth, with a focus on restoring our gross margin, stepping up marketing investments and increasing free cash flow. Nestlé’s value creation model puts us in a strong position to achieve our 2025 targets and to generate reliable, sustainable shareholder returns.»

For additional information please read the Company’s PDF file below (330 KB):

20230217-NESTLE-FY-2022.