GLOBAL – Nestlé, the global food and beverage leader, has revised its sales forecast for 2024, lowering its projected organic sales growth to 2%, down from its earlier estimate of at least 3%.
The update, released on October 17, attributes the downgrade to weakening consumer demand and efforts to reduce customer inventories in the third quarter of the year.
For the first nine months of 2024, Nestlé reported organic growth of 2%, with pricing contributing 1.6%. Total sales for the period reached CHF 67.1 billion (€71.5 billion), a 2.4% decline compared to the same timeframe in 2023.
In addition to the sales forecast adjustment, Nestlé has revised its profitability outlook, expecting an underlying trading operating profit margin of 17% for 2024. Earnings per share in constant currency are predicted to remain “broadly flat” for the year.
Amid these financial updates, Nestlé confirmed significant organizational changes that will take effect on January 1, 2025.
The restructuring, aimed at streamlining decision-making and improving operational efficiency, will see changes to the company’s executive board and corporate structure.
Laurent Freixe, Nestlé’s CEO since September, emphasized that these adjustments will enhance the company’s ability to respond quickly and effectively to market shifts.
The reorganization includes consolidating Nestlé’s Latin America and North America divisions into a new entity called Zone Americas (AMS), which will be led by Steve Presley.
Additionally, Nestlé is merging the Greater China Region (GCR) into Zone Asia, Oceania, and Africa (AOA), led by Remy Ejel.
Other notable changes include the promotion of Philipp Navratil, who will take over as the head of Nespresso and join the executive board.
David Rennie, who currently leads Nestlé Coffee Brands, will take over as head of strategic business units and marketing, succeeding Bernard Meunier, who is set to retire in March 2025.
Freixe highlighted that these structural changes are designed to simplify Nestlé’s operations, speed up decision-making, and support the company’s global initiatives.
He also reiterated Nestlé’s focus on digital transformation, aiming to create a real-time, connected organization powered by data and AI.
The company is investing heavily in its brands and innovation to expand its market share and remain competitive in a challenging economic environment.
Despite the softening market conditions, Freixe expressed confidence in Nestlé’s ability to succeed, citing the company’s global scale, iconic brands, and continued investment in digital capabilities as key strengths.
Looking forward, the company is committed to maintaining its quarterly sales performance reporting, particularly for key regions such as North America, Latin America, and Greater China.
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