Nestlé
Nestlé chief executive Laurent Freixe, who took over in September, said the company had achieved a solid performance in 2024 that was in line with its latest guidance, “In a challenging macroeconomic context and soft consumer environment.”
He spoke during a press conference earlier today to announce the company’s full-year results 2024.
A company veteran parachuted in from Nestlé’s Latin America division after the abrupt departure of Mark Schneider, Freixe has been given the task of reviving the company’s sales, which have slumped due to global inflation prompting consumers to slash spending.
Organic growth was 2.2%, with a return to positive real internal growth of 0.8%, 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. This means delivering superior product taste and quality with unbeatable value, scaling our winning platforms and brands, accelerating the rollout of our innovation ‘big bets’ and addressing underperformers.
“While there is macroeconomic uncertainty, we have lots of opportunities ahead of us, and we have the strategy, the resources and the people and team to deliver.”
Nestlé's full-year sales fell 1.8% to 91.4bn Swiss Francs (CHF). Currency was a detractor, with an underlying growth of 2.2%. Volume improved 0.8% with prices up 1.5% - both better than expected.
Growth was led by coffee, confectionery, and PetCare, mainly in Europe and emerging markets. Sales in confectionery grew at a mid-single-digit rate, led by KitKat and key local brands.
The company reported that confectionery grew double-digit, driven by Tollhouse baking products and pricing actions, particularly in the year's second half.
Growth was mainly pricing-led, reflecting the inflationary environment for coffee and confectionery.
"Although the environment remains very challenging, we believe that the 2024 results mark a new beginning," Vontobel analyst Jean-Philippe Bertschy told Reuters.
While two of Nestlé's most important commodities - coffee for Nescafe and cocoa for KitKats - are at record-high prices, it said it would only pass on some input cost increases to shoppers.
Freixe said: “Price competitiveness is a priority in the context of the high inflationary environment for certain commodities, most notably coffee and cocoa.
“We are taking an agile approach to passing on input cost increases, selectively investing in price as we focus on restoring competitiveness. To strengthen brand communication, we are stepping up investment and improving efficiency and effectiveness.”
Nestlé proposed a 1.7% increase in the annual dividend to CHF 3.05 per share.
Its shares rose 5.7% in early trading.
Mondelēz International
The surge in cocoa prices, coupled with higher transportation costs, is starting to hit the big chocolate makers, with Mondelēz International reporting its fourth-quarter and full-year 2024 financial results on 4 February, 2025.
The Chicago-headquartered company anticipates a 10% decline in adjusted profit for 2025, primarily due to escalating cocoa prices and other cost pressures. This projection exceeds analyst expectations of a 6.7% decline.
The company also noted that its outlook does not account for potential changes in trade tariffs, given the current uncertain and evolving trade environment.
In summary, while Mondelēz achieved growth in net revenues and adjusted EPS in 2024, it faces significant challenges in 2025 due to rising input costs, particularly cocoa, which are expected to impact profitability.
The Hershey Company
The Hershey Company has also reported its financial results for 2024, highlighting “significant pressure on earnings” in 2025 from stubbornly high cocoa costs but still envisages an acceleration in sales revenue.
The company achieved net sales of $11.2 billion, reflecting a 3% increase compared to the previous year. International sales grew by 9.8%, with volume increases being the main contributor.
The company said it faced significant challenges due to escalating cocoa prices, which nearly doubled over the year. Hershey implemented price hikes across its product lines. However, the company acknowledged that higher prices might impact consumer demand.
Anthony Myers
“While we continue to view today’s high cocoa prices as transient, our teams are readying opportunities for quick execution, and we are prepared to adjust our pricing, price-pack architecture, formulations, demand-shaping, and investment strategies, should our view on the commodity markets evolve,” chairman and CEO Michele Buck told analysts.
Buck, who announced she is stepping down in June next year after eight years in charge, said private-label players in confectionery have also been “aggressive” with their pricing.
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