Nestlé has disappointed expectations for 2023, reporting lower-than-expected organic growth and warning that it expects a slowdown in business this year.

The Swiss food giant's shares lost over 4% in early trading in Europe following this publication, suffering one of the biggest declines on the pan-European STOXX 600 index.

Like its competitors such as Danone, Nestlé is facing a slowdown in inflation, which is hampering its ability to pass on cost increases to its prices.

While the consensus was for 7.4%, organic growth came out at 7.2% last year, boosted by a 7.5% price effect, and is expected to slow to around 4% this year.

Mark Schneider, Nestlé's Chief Executive Officer, now says he wants to offer affordable prices, and is giving priority to volume- and mix-driven growth, with increased investment in brands.

The owner of the Nescafé and KitKat brands also says it expects a moderate increase in its recurring operating margin in 2024, while its recurring earnings per share at constant exchange rates should rise by between 6% and 10%.

In 2023, its recurring operating margin was 17.3%, up 40 basis points at constant exchange rates, while its EPS rose by 8.4% at constant exchange rates.

The Group plans to propose a dividend of three Swiss francs per share to its shareholders, an increase of five cents.

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