Nestlé has lowered its full-year sales forecast to 2%, reflecting softening consumer demand. The company announced changes in its corporate structure and emphasized digital transformation for enhanced operational efficiency and growth.
Nestlé, the renowned global food and beverage company headquartered in Vevey, Switzerland, announced a downward revision of its full-year sales forecast. The company now anticipates organic sales growth of approximately 2% for 2024, down from its earlier projection of at least 3% made in July. This update highlights the challenges facing the industry as consumer demand softens.
For the first nine months of 2024, Nestlé reported organic growth of 2%, with pricing contributing 1.6%. Total sales during this period reached CHF 67.1 billion (€71.5 billion), marking a 2.4% decline compared to the same timeframe in 2023. The decrease in sales was attributed to diminished consumer demand and strategic measures taken in the third quarter to reduce customer inventories.
Additionally, Nestlé adjusted its profitability outlook, projecting an underlying trading operating profit margin of around 17% for the year. The company also expects earnings per share growth in constant currency to remain “broadly flat.”
In conjunction with this financial update, Nestlé announced significant organizational changes set to take effect on January 1, 2025. The company’s board of directors has approved a reorganization that will affect its executive board structure. Laurent Freixe, who became the Chief Executive Officer in September, stated that the new structure aims to streamline decision-making processes and improve operational efficiency.
Freixe emphasized that a leaner executive board will enhance simplicity and speed in decision-making, ultimately strengthening the momentum behind global initiatives. He noted that all leaders of key performance-driving units would report directly to him, allowing Nestlé to focus more sharply on consumer and customer needs while investing in its brands and innovation.
Freixe also reiterated Nestlé’s commitment to digital transformation, aiming to create a connected, data-driven organization powered by artificial intelligence. Despite the challenges posed by the current market environment, Freixe expressed optimism about Nestlé’s competitive position, highlighting the company’s global scale, iconic brands, and innovative product offerings.
Looking ahead, he reaffirmed the importance of investing in Nestlé’s brands and digital capabilities to enhance market agility and efficiency, positioning the company for continued growth amidst ongoing demand challenges.
