Nestlé reports results in line with expectations

Nestlé reported results for the last quarter of 2021 in line with analysts’ expectations. Sales were up 7.2% organically, and the operating margin was 17.4%.

What worries investors most about the future is the impact of commodity inflation. Indeed, the price of oil is soaring, obviously impacting transport costs, but also all oil derivatives (plastics for packaging for example). To this end, the multinational has reassured investors by guiding for an operating margin between 17.0% and 17.5% for 2022 (after having reached 17.4% for the full year in 2021). Management even suggested that this margin forecast was conservative. In the financial markets, it is indeed better to promise little, to better meet or exceed targets. In terms of revenue growth, the company was vaguer, forecasting growth “around 5%” in 2022. However, growth could be higher if the company can pass on inflation costs to consumers.