Maggi and Milo drive Nestle’s double digit sales growth in Middle East & Africa | Food Business Africa Magazine
MENA – Affordable offerings across Maggi and Milo, as well as broad-based demand for Infant Nutrition products, were the main driver’s of Nestle’s double-digit sales growth in the Middle East and Africa, Nestle’s full-year financial report has revealed.
Sales in Zone Asia, Oceania, and Africa, where the MENA region lies, increased by 3.3% to CHF 18.5 billion (US$20.5 billion), according to the report.
The region further reported a growth of 8.2%, driven by pricing at 8.1%, , continued recovery of out-of-home channels and innovation.
By product category, culinary was the largest growth contributor, while sales at Nestlé Professional grew at a strong double-digit rate across geographies and categories, fueled by increased distribution.
Coffee also reported high single-digit growth, with continued strong demand for Nescafé and Starbucks products while Cocoa and malt beverages posted high single-digit growth, driven by Milo.
Infant Nutrition reached high single-digit growth, based on innovation and increased distribution while Sales in confectionery grew at a double-digit rate, led by KitKat.
Nestle noted that its pet care division Purina reported high single-digit growth, with continued momentum for Purina ONE, Felix and Purina Pro Plan.
Portfolio optimization actions however affected the company’s ambient dairy in the region resulting in slight sales decrease.
Despite growth in sales, Nestle noted that significant cost inflation in the region more than offset pricing, growth leverage and disciplined cost control leading to a decrease of underlying trading operating profit margin by 110 basis points.
Total reported sales increased to US$102 billion
Overall, Nestle reported sales of CHF94.4 billion (US$102 billion), an 8.4% growth that was positively influenced by net acquisitions largely related to the acquisitions of the core brands of The Bountiful Company and Orgain.
By product category, Purina PetCare was the largest contributor to organic growth while sales in coffee grew at a high single-digit rate supported by a strong recovery of out-of-home channels.
Group Net profit decreased by 45.2% to CHF 9.3 billion while Earnings per share decreased by 43.5% to CHF 3.42 on a reported basis, mainly reflecting the 2021 gain on the disposal of L’Oréal shares.
“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,” Commented Nestle CEO Mark Schneider.
Nestle Health Science reported modest growth of 4.0% that was largely influenced by pricing action at 3.6%.
Reported sales in Nestlé Health Science however grow by an impressive 36.9% to CHF 6.6 billion largely driven by a 31.5% contribution from Net acquisitions largely related to the acquisitions of the core brands of The Bountiful Company and Orgain.
The company’s Nespresso division reported organic growth of 3.5% supported by a strong recovery of out-of-home channels, with continued expansion of the Momento system and improved sales development for the office segment.
Looking to 2023, Nestle expects organic sales growth between 6% and 8% and an underlying trading operating profit margin of between 17.0% and 17.5%.
Underlying earnings per share in constant currency is on the other hand expected to increase between 6% and 10%.
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