Nestle Reports 6.4 Percent Organic Sales Growth In First Quarter

In the first three months of 2011, sales at Nestle amounted to CHF 20.3 billion, consisting of 6.4 percent organic growth, including 4.9 percent real internal growth. Sales were impacted by -9.8 percent from foreign exchange and by -5.9 percent from divestitures (mainly Alcon) net of acquisitions (mainly Kraft Pizza). For the continuing business, sales in Swiss francs were down 1.2 percent.

The first quarter organic sales development of 6.4 percent reflects strong, broad-based growth, building on the momentum in 2010. The organic growth was 4.3 percent in the Americas, 3.9 percent in Europe and 13.8\ percent in Asia, Oceania and Africa. Developed markets grew 3 percent, while emerging markets achieved around 12 percent organic growth.

Sales in the Americas was CHF 6.4 billion, marking 3.7 percent organic growth and 1.2 percent real internal growth.

The North American market remained subdued but market share performance was good in most categories. The trends in frozen food have improved, halting the decline seen in 2010. New launches, Market Creations by Lean Cuisine and Farmers' Harvest by Stouffer's, have been well received.

In pet care, Purina entered the ultra-premium category with Purina One Beyond.

Nescafé and Coffee-mate grew in the first quarter, but chocolate's growth was impacted by tough comparisons with the same period last year which saw the launch of Wonka. Volumes in ice cream were impacted by price increases, but market shares were up.

Latin America continued to grow well, with all regions contributing.

Brazil enjoyed double-digit growth in a number of categories, but the late Easter season held back growth in its large chocolate business. Mexico continued to perform well, whilst the Austral-American and Bolivarian regions achieved double-digit growth, as did the regional pet care business.

There were good performances in most categories in the Americas. Soluble coffee, ambient culinary, powdered beverages and chilled culinary all grew double-digit, and there was high single-digit growth in both ambient and chilled dairy, as well as in biscuits.

Paul Bulcke, Nestlé CEO, said in a prepared statement: "We achieved growth in all categories in the first three months of 2011, maintaining last year's momentum. We continue to invest for the future, particularly in R&D and consumer-facing marketing, while addressing the challenge of higher input costs by accelerating the pace of innovation as well as ensuring the appropriate balance between savings from Nestlé Continuous Excellence and pricing. In view of the strong start to the year, we are able to reconfirm our guidance for 2011 as a whole."

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