Zurich, Feb 17 (BNA): Food group Nestle said Thursday it expects core sales to rise around 5% and a broadly stable margin this year after strong demand for coffee and pet food as well as higher prices helped accelerate growth ahead of expectations. in the fourth quarter.
Basic or organic sales, which remove currency fluctuations and acquisitions, rose 7.5% last year, beating expectations of 7.1% in the company’s poll of analysts, thanks to a 7.2% increase in the fourth quarter, according to the manufacturer of Nescafe Instant. Coffee said in a statement.
Under pressure from rising costs for raw materials, energy and transportation, core business operating profit margin declined slightly to 17.4% in 2021, from 17.7% in 2020, reflecting the time lag between cost inflation and pricing action, Reuters reported.
Consumer goods companies are struggling with rising costs for goods, energy, transportation and labor, which has pushed peer Unilever. To warn last week of profitability as it struggles to raise prices enough to offset rising costs.
At Nestlé, organic sales growth was driven by larger volumes and a 3.1% price increase in the fourth quarter, up from 2.1% in the third quarter as the group experienced higher costs.
It said it expects organic sales to grow around 5% while maintaining a base trading operating profit margin between 17.0% and 17.5% in 2022. It also said it expects organic sales to grow 4-6% over the medium term.
Nestle’s net profit rose 38.2% to 16.9 billion Swiss francs ($18.34 billion), prompting the company to propose a dividend increase of 2.80 francs per share, up from 2.75 francs for 2020, but slightly below expectations.
FA