Nestlé achieved total sales of CHF 91.4 billion in 2024. This corresponds to a decline of 1.8 per cent compared to the previous year. This is partly due to negative currency effects and weak consumer demand in many markets. Organic growth amounted to 2.2 per cent. Price adjustments amounted to 1.5 per cent, which is due to the decline in inflation in most categories after two years of high input costs and price increases. Additionally, measures to reduce customer inventories in the second half of the year led to a decline in real internal growth of around 20 basis points for the year as a whole.

In terms of regions, organic growth was driven by the emerging markets and Europe, which together more than offset the decline in North America. In the industrialised countries, organic growth amounted to 1.2 percent, with positive price adjustments and positive real internal growth. In the emerging markets, organic growth amounted to 3.7 per cent, led by price adjustments and positive real internal growth.

Nestlé organic sales growth by product category

Organic growth by product category was as follows: 

• Coffee had the largest contribution with mid single-digit growth.
• Confectionery sales increased mid single-digit.
• Petcare grew low single-digit.
• Nestlé Health Science grew at a mid-single digit rate, with double digit growth in the second half.
• Water grew at a low single digit rate.
• Infant nutrition grew at a low single digit rate.
• Dairy saw negative growth as a decline in creamers and ambient milks offset growth in dairy.
• Culinary had negative growth.

Operating profit and gross margin below prior year

The underlying trading operating profit was CHF 15.7 billion, a decline of 2.2 per cent on an actual basis and an increase of 1.3 per cent in constant currencies. Net restructuring and other expenses were CHF 1.1 billion compared to CHF 1.5 billion in the prior year. The decline is mainly due to lower restructuring costs. Operating profit increased by 0.8 per cent to CHF 14.6 billion. Gross profit remained unchanged at CHF 42.7 billion. As a percentage of sales, research and development costs remained stable at 1.8 per cent. 

Commenting on the full-year results, Nestlé CEO Laurent Freixe said: "In a challenging macroeconomic context and soft consumer environment, we achieved a solid performance in 2024 in line with our latest guidance. Organic growth was 2.2 per cent, with a return to positive real internal growth of 0.8 per cent, and both strengthened in the second half. [..] We have a clear roadmap to accelerate performance and transform for the future. Increasing investment to drive growth is central to our plan."

Nestlé is focusing on AI and automation in procurement and supplier management

Nestlé announced, in addition to the existing cost-cutting initiatives, a new three-year cost-cutting programme called ‘Fuel for Growth’ in November 2024. The aim is to achieve annual cost savings of CHF 2.5 billion by the end of 2027. These will be used to fund the increased growth investments. Around three quarters of the total 'Fuel for Growth' savings will come from procurement. The remainder will come from operational efficiency and commercial investments. In procurement, the largest savings will come from AI-enabled sourcing and supplier management, consolidation and bundling of spend, and expansion and automation of e-procurement. Key operational efficiency and commercial investment initiatives include operating model redesign and manufacturing and logistics opportunities. Savings in purchasing and commercial investments are expected to have limited associated costs. Operational efficiency gains typically have one-time costs of about double the annual savings. 

Nestlé Outlook 2025 unchanged

The outlook for the full year 2025 remains unchanged as the accelerated implementation of cost savings offsets recent price increases in key raw materials. The company expects organic sales growth to improve over 2024 as the growth plans continue to be implemented.