Nestle sales growth beats forecast with new CEO at helm

By Alexander Marrow (Reuters) -Nestle reported better-than-expected sales growth on Thursday thanks to pricing-led upticks in confectionery and coffee as the world's largest packaged food company reported results for the first time since Philipp Navratil became CEO. Navratil, the former head of Nespresso, replaced Laurent Freixe, who was fired in September as chief executive over an undisclosed relationship with a direct report. Nestle has endured an unprecedented period of managerial turmoil, with Chairman Paul Bulcke stepping down early to make way for former Inditex chief Pablo Isla two weeks later. A 1.5% rise in real internal growth (RIG) – a measure of sales volumes – in the third quarter, well above analysts' expectations of a 0.3% rise, may offer Navratil breathing space as he looks to make his mark following his sudden promotion. The Swiss maker of KitKat chocolate bars, Nespresso coffee and Maggi seasoning has been fighting to reignite stalling sales growth and arrest a steep share price slide as costs have risen and debt levels have climbed amid rising investor pressure. Navratil said driving RIG-led growth was Nestle's top priority and that it would reduce headcount as well as raise its costs savings target to 3 billion Swiss francs ($3.77 billion) from 2.5 billion francs by the end of 2027. "We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded," Navratil said in a statement. "The world is changing, and Nestlé needs to change faster." Organic sales, which exclude the impact of currency movement and acquisitions, rose 4.3% in the quarter, Nestle said, above analysts' estimates for 3.7% growth. The firm maintained its 2025 outlook, underlining that organic sales growth should improve compared to 2024 and seeing underlying trading operating profit margin at, or above, 16%. ($1 = 0.7955 Swiss francs) (Reporting by Alexander MarrowEditing by Dave Graham)

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