Image source: Visual China
Blue Whale News, July 25 (Reporter Sun Yu) Today, Nestle Group announced its financial results for the first half of 2024, achieving total sales of 45 billion Switzerland francs (about 369.2 billion yuan) during the reporting period, a year-on-year decrease of 2.7%. Foreign exchange rates resulted in a 4.4 percent decrease in sales and a negative 0.4 percent impact on net asset divestitures.
According to the report, organic growth in the first half of the year reached 2.1 percent, driven by the performance of all regions and categories. Nestlé expects organic sales growth of at least 3% in 2024. Underlying earnings per share in constant currency terms are expected to increase by a mid-single-digit percentage.
Source: Nestlé Group
From a product category perspective, the coffee business contributed the most to the growth. According to the financial report, the coffee business achieved mid-single-digit growth, and the coffee brands of the Nestlé Group include: Nescafe, Nespresso and Starbucks.
According to the financial report, Nestlé's water business achieved mid-single-digit growth, benefiting from the continued growth momentum of the San Pellegrino business and the rebound of the Perrier water business. In addition, Nestlé's confectionery business achieved high-single-digit growth, driven by KitKat and local brands.
By channel, the retail channel grew organically by 2.0%. E-commerce sales increased by 10.6% to 18.2% of the Group's total sales. The out-of-home channel grew organically by 3.8%.
Specific to Nestlé Greater China, sales in Greater China fell by 4.2% to 2.4 billion Switzerland francs (about 19.7 billion yuan) during the reporting period. Instant coffee, pet food, confectionery and baby nutrition in Greater China increased market share, while condiments decreased market share.
Source: Nestlé Group
Nestlé grew organically and 2.9% organically in Greater China, with real internal growth of 2.9% and 3.8% in the second quarter, driven by continued growth momentum in both the out-of-home and e-commerce channels. The pricing contribution was negative 1.3%, mainly due to fierce competition in the food and beverage industry. The exchange rate had a negative impact of 6.1%.
In terms of products, Nestlé's coffee business in Greater China also achieved high-single-digit growth. Nestlé said that thanks to continuous innovation and customer expansion, Nestlé's professional catering business achieved high-single-digit growth. In addition, Crunchy Shark, Hsu Fu Chi and KitKat products drove high-single-digit growth in the confectionery business.
It is worth noting that Nestlé's dairy business in Greater China showed negative growth, reflecting the overall slowdown in the dairy market. According to the report, although the infant nutrition business showed negative growth, its performance was still better than the overall level of the industry.
What do you think about 2024? Zhang Xiqiang, CEO of Nestle Greater China, said in a recent interview with the media, "2024 is not an easy year, but there are similar situations every year, and it is nothing more than a few points for us to grasp, one is to really provide products that are competitive, liked by consumers, and have a quality-price ratio, because we are a brand company and want to make products that consumers like." ”