7th November 2022
Daniel Pfund, Senior Financial Analyst
Nestlé published its sales for the third quarter with an organic growth of 9.3% (the company only publishes full results semi-annually). This strong growth is mainly the result of price increases (9.5% in the third quarter) due to inflation. The multinational is passing on the increase in raw materials with a certain delay, as well as all the related costs such as transport, PET, etc. Unfortunately, the price increase is often accompanied by a lower end demand; this is commonly known as price elasticity, which has a negative correlation. This has been confirmed with slightly lower volumes in the third quarter (-0.2%).
The good news is that management has raised its full-year growth forecast to “around 8%”, which seems relatively conservative. If the company continues to raise prices, as it has hinted, this growth could well be exceeded by the end of the year.