NSRGY - Nestlé S.A. (NSRGY) Q4 2023 Earnings Call Transcript
2024-02-23 14:20:24 ET
Nestlé S.A. (NSRGY)
Q4 2023 Earnings Conference Call
February 22, 2024 08:00 ET
Company Participants
Luca Borlini - Investor Relations
Mark Schneider - Chief Executive Officer
François Roger - Chief Financial Officer
Conference Call Participants
Warren Ackerman - Barclays
Bruno Monteyne - Bernstein
Guillaume Delmas - UBS
Jeremy Fialko - HSBC
Patrik Schwendimann - Zürcher Kantonalbank
Jon Cox - Kepler
Pascal Boll - Stifel
Jeff Stent - Exane
Victoria Petrova - Bank of America
David Hayes - Jefferies
Tom Sykes - Deutsche Bank
Presentation
Luca Borlini
Good afternoon and good morning to everyone. A warm welcome to the Nestlé Full Year 2023 Results Webcast and thanks for joining. I am Luca Borlini, Head of Nestlé’s Investor Relations. Today, I am joined by our CEO, Mark Schneider; and our CFO, François Roger. Mark will begin as usual with an overview of 2023 and discuss the 2024 guidance. François will follow with a review of the full year 2023 sales and profit figures. We will then open up the lines for your questions.
Before we begin, please take note of our disclaimer. And now I hand over to Mark.
Mark Schneider
Luca, thank you, and a warm welcome to our conference call participants today. As always, we do appreciate your interest in our company, and we look forward to answering your questions.
Let me move straight to the key messages for the year. I believe that in the context of soft consumer demand in the food industry, we have demonstrated resilient performance. I think in this environment, we did come in within our guided range both on organic growth and profitability. We did show, as we had indicated before, positive real internal growth in Q4. And as a result of the improvement in Q4, also in the second half, we did show a significant improvement in free cash flow from ‘22 to ‘23. And I think we’ve also seen a marked improvement in our return on invested capital. Our underlying earnings per share also came in within the mid-term expected range. We clocked 8.4%. And that’s slightly above the midpoint of the 6% to 10% range in constant currency that we had given out to you.
What’s important to me is that all of these financial results did not stand in contradiction to putting in the needed investment to ensure growth acceleration and sustainable growth in the future and, of course, consistent value creation for the long-term. So we have put in considerable resources when it comes to meaningful innovation but also constant renovation of our products. We have stepped up our marketing investments to the tune of 80 basis points last year over ‘22. We will continue to do that now. We will continue to increase our marketing investments in the year ‘24.
And I think you’ve also seen continued investments and continued progress in our sustainability agenda, whether it’s around the theme of Good for You, which is for the nutritional value of our products; or for the Good for the Planet agenda as part of sustainability. Based on these solid results, our Board proposes a dividend per share of CHF3, which is an increase of CHF0.05, and it marks the 29th consecutive year of dividend increases of our company.
As we move to the next slide, let’s take a quick look at the historic food price inflation over the last 50 years. And I think this explains a lot about the softness that we’ve all seen, especially in the second half of 2023 when it comes to the food sector. Because we are literally seeing a 50-year event when it comes to the spiking of food price inflation, not only when it comes to the sheer size of the amplitude, but also the steepness and unexpectedness that we’ve seen in ‘22 and then continuing in ‘23....
Nestlé S.A. (NSRGY) Q4 2023 Earnings Call Transcript