By Michael Susin

Nestle is scheduled to report results for 2024 on Thursday. Here is what you need to know.

ORGANIC SALES FORECAST: The Swiss maker of KitKat chocolate bars and Nescafe coffee is expected to report organic sales growth of 2.1% in 2024, according to a company-compiled consensus. Growth is likely to be driven by higher prices and volumes, which are expected to have risen 1.4% and 0.7%, respectively. If confirmed, that would be the slowest growth in more than 25 years. A year ago, Nestle's sales grew 7.2%, lifted by price increases, while volumes were down 0.3% as shoppers opted for cheaper brands.

REPORTED SALES FORECAST: Nestle's sales are expected to have fallen to 91.02 billion Swiss francs ($99.66 billion) in 2024 from 93.00 billion Swiss francs a year earlier. The drop could be mainly related to foreign-exchange headwinds, expected to weigh 3.9% on sales.

UNDERLYING TRADING OPERATING PROFIT FORECAST: The company's preferred profit metric is forecast at 15.46 billion Swiss francs, down from 16.05 billion Swiss francs a year ago, according to the same market consensus provided by Nestle.

NET PROFIT FORECAST: Net profit is expected to drop to 10.895 billion Swiss francs from 11.21 billion Swiss francs in 2024.

WHAT TO WATCH

Shares have fallen nearly 20% over the past 12 months.

--GUIDANCE: Nestle expects its underlying trading operating profit margin for 2025 to be moderately lower than 2024. Organic sales growth is expected to improve compared with 2024. Over the medium term, once market conditions normalize, the company expects organic sales growth of more than 4% and a margin of more than 17%.

--EXPECTATIONS FOR 2025: A company consensus forecasts organic sales growth of 3.1% this year, with a contribution from higher prices of 1.7% and volumes of 1.4%, as inflation subsides. This compares with previous years, when consumer-goods companies increased prices to pass on part of higher production costs to consumers, leading to a deterioration in sales volumes.

--COST-SAVING INITIATIVES: Chief Executive Laurent Freixe has said that Nestle's investment in advertising and marketing is expected to represent 9% of sales by the end of 2025. To help fund higher spending, the company is aiming to deliver 2.5 billion Swiss francs in additional cost savings by the end of 2027.

Write to Michael Susin at michael.susin@wsj.com

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(END) Dow Jones Newswires

February 12, 2025 08:32 ET (13:32 GMT)

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