Nestle (NESN.S) reported slightly better than expected annual sales growth on Thursday driven by price increases, though the world’s largest packaged food company warned of a narrower profit margin in 2025.

Under new CEO Laurent Freixe, the world’s biggest packaged food maker is trying to grow sales volumes, invest in innovation and restore investor confidence after years of soaring prices alienated shoppers and ate into its marketing budget.

Nestle forecast that 2025 full-year organic sales would be higher than last year, maintaining the target it outlined during its capital markets day in November.

But the maker of Maggi stock cubes and Nescafe coffee forecast an underlying trading operating profit margin of 16 per cent or more, down from 17.2 per cent last year.

“(We expect) a lower underlying trading operating profit margin in the short term as we invest for growth,” Freixe said.

Shares in the company were up nearly 6 per cent at 0809 GMT.

“Although the environment remains very challenging, we believe that the 2024 results mark a new beginning,” Vontobel analyst Jean-Philippe Bertschy said.

While two of Nestle’s most important commodities – coffee for Nescafe and cocoa for Kit-Kats – are at record-high prices, it said it would only pass on some input cost increases to shoppers.

Nestle’s competitors including Knorr stock cube-maker Unilever slowed price increases last year, in a move to woo back shoppers who had turned to cheaper products.

The Swiss company, however, did not ease as quickly, with several quarters of weak sales volumes leading to the August ouster of former CEO Mark Schneider.

Nestle said in late 2024 that it was aiming for cost savings of 2.5 billion Swiss francs ($2.75 billion) by the end of 2027. It said on Thursday it has already secured over 300 million francs of savings for this year.

Price increases of 1.5 per cent last year just topped the average analyst estimate of 1.4 per cent. Real internal growth – or sales volumes – rose 0.8 per cent versus expectations of a 0.7 per cent increase.

Organic sales, which exclude the impact of currency movements and acquisitions, rose 2.2 per cent in the full year ended December 31, broadly in line with expectation for 2.1 per cent.

Sales fell 1.8 per cent to 91.35 billion francs, with net profit down 2.9 per cent to 10.88 billion francs.