Nestlé warns for decreasing profit margins

Nestlé saw its revenue and profit decline slightly last year, and its new CEO warns investments will further impact profit margins this year.

Margins shrink further

Last year, Nestlé’s revenue decreased by 1.8 % to 91.35 billion Swiss francs (96.8 billion euros), while net profit declined by 2.9 % to 10.88 billion Swiss francs (11.5 billion euros). Excluding currency effects, revenue increased by 2.2 %: this represents Nestlé’s lowest organic growth in over 25 years, but it still surpassed analysts’ expectations.

CEO Laurent Freixe is now focusing on increasing sales volumes, implementing innovation and restoring investor confidence after years of price hikes that deterred consumers and pressured the marketing budget. However, these investments come at a cost: Freixe anticipates a further decline in underlying operating profit for 2025, with the margin expected to reach 16 %, down from 17.2 % in 2024.

The Swiss multinational has already implemented a reorganisation, which will lead to short-term profitability declines but is expected to improve organic growth. The food giant’s main areas of growth remain coffee and chocolate, with brands such as Nescafé, Nespresso, and KitKat, despite facing unprecedented raw material prices for cocoa and coffee.