Nestlé UK nearly doubles profits after cutting costs

Nestlé UK posted a 98% rise in pre-tax profit to reach £162.4m ($217.2m) | Photo credit: Chino Rocha

Nestlé UK rebounded from a tough 2022 with a significant increase in pre-tax profit and sales in 2023, new financial filings reveal. 
 

The food and beverage group, which produces the Nescafé, Nespresso and licensed Starbucks at Home coffee products alongside confectionery, beverages and baby food ranges, posted a 98% rise in pre-tax profit for the 12 months ending 31 December 2023 to reach £162.4m ($217.2m).  

Nestlé UK also achieved 137% year-on-year operating profit growth to £150.7m ($201.5m) after reducing operating costs. 

In a Companies House filing, Nestlé UK said it reduced restructuring costs – primarily relating to factory reorganisations – and cut pension expenses by £20.4m ($27.2m) in 2023, while portfolio optimisation and cost-saving projects boosted trading margins. Total sales for the year grew 7.4% to £2.1bn ($2.8bn). 

Nestlé UK did not provide a forecast for its 2024 earnings. However, it did warn that inflationary pressures, increased costs and supply chain complexities will continue to put pressure on its operations. 

The group’s earnings release comes a few weeks after its coffee pod division, Nespresso UK, also reported a rise in 2023 sales and profit. The business achieved 3% year-on-year sales growth to £338.6m ($446m) alongside a 5% increase in pre-tax profits to £14m ($18.4m). 

Swiss food and beverage group Nestlé has operated in the UK since 1873 and currently has 12 production facilities and three distribution centres across the country. Nestlé UK has been led by CEO Richard Watson since January 2023. 

Vevey-based Nestlé reported a 1.5% fall in 2023 sales to CHF 93bn ($109bn), with revenues in the first six months of 2024 declining 2.7% year-on-year to CHF 45bn ($51bn).