Investor Presentaiton
Nestlé 2023 Half-Year Results
Thursday 27th July 2023
A lot of questions there. Let me start with the margin one. So indeed, we are very positive
about the fact that our gross margin will continue to grow in the second half of the year. I can't
give you a specific number for the second half, but you saw already that we improved our gross
margin by 110 basis points from Q2 last year to Q1 this year. It will continue, especially as we
continue benefiting, to a certain extent, from the pricing that we have done, including we have
done some pricing at the end of Q1, while we see a moderation in input cost inflation.
Input cost inflation remains high. If we look at the first half of 2023, it is almost 10% increase.
So it's not 0. And we continue seeing some items increasing. I mentioned earlier, the Robusta
price increases, or sugar, or cocoa, for example, but we see obviously some more softness in
some other items like energy or transportation. So the fact of having still the benefit of pricing
that we have implemented at the end of last year and at the beginning of this year to catch up
with inflation of the past 2 years, combined with a moderation of input cost inflation will help us
to grow the gross margin.
I'm confirming, by the way, the fact that we expect to recover our gross margin to the level
where it was before, around 50%. I can't give you an exact timing for that. It will take some
time, but the timing will depend on some external factors as well, but we are fully committed to
that.
Wage inflation was high this year because it comes usually with a 1-year delay, so we had to
reflect that and pass it on to our employees, largely at the beginning of the year, but it is a local
decision, it has to be seen in a local context.
On your second question on Coffee, Coffee is actually, as you could see, the only category
where we have seen a margin decline in the first half of the year. This is largely linked to the
fact that this is one of the areas where we have seen the highest level of increase in terms of
input cost inflation with, as I mentioned earlier, Robusta increasing still since the beginning of
the year by another 30% against the '22 average and it is 50% higher than the last 10-year
average. So it continues to be high.
This inflation is not only for us. So I think that it's a relatively playing field competitive
environment. And most of our competitors have passed on pricing. We do expect our margin,
in Coffee to increase over time especially when we expect to see, there is still a lot of volatility,
but we expect to see the price of Coffee bean prices stabilizing and then this will be certainly
an opportunity to see our margin increasing again in Coffee. We are very much committed to
that, not necessarily in H2, but in the medium term.
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