Nestle Reports 7.2 Percent First Quarter Growth

For the first quarter, Nestle reported sales of CHF 21.4 billion, 7.2 percent organic growth, 2.8 percent real internal growth, 3.1 percent organic growth in developed markets, and 13.0 percent organic growth in emerging markets.

Full-year outlook remains unchanged, with organic growth of 5 to 6 percent, and improved margin and underlying earnings per share in constant currencies.

Paul Bulcke, Nestlé CEO, said in a prepared statement: “As anticipated, 2012 is already confirming itself to be a challenging year. In many developed markets where consumer confidence is low, the trading environment is subdued whilst in most emerging markets, conditions remain dynamic and rich in growth opportunities. Our past and present investments, and continuing innovation, have enabled us to deliver good growth in the first quarter. This, together with the pricing effect for the rest of the year and a likely improved raw material environment in the second half, allows us to confirm our full-year outlook of delivering 5 to 6 percent organic growth together with an improvement in the year-end margin and underlying earnings per share in constant currencies.”

In the first three months of 2012, sales increased by 5.6 percent to CHF 21.4 billion. Organic growth was 7.2 percent, composed of 2.8 percent real internal growth and pricing of 4.4 percent. Acquisitions net of divestitures, added 3 percent to sales, whilst foreign exchange had a negative impact of 4.6 percent.

Nestle wafers reported sales of CHF 1.6 billion, 8.0 percent organic growth, 5.0 percent real internal growth

The North American business showed strong growth, building on its momentum in 2011. There were good performances from Nestle Pure Life, which grew double-digit, and the premium international brands S. Pellegrino and Perrier. Regional brands such a Poland Spring and Ice Mountain grew solidly.

Sales of Nestle Nutrition were CHF 1.9 billion, 5.8 percent organic growth, 2.0 percent real internal growth.

Nestlé Professional’s performance was driven by investment in its growth pillars both in emerging and developed markets. Its growth was positive in all three zones, with emerging markets growing double-digit. The beverage business’s focus on premium and super-premium solutions drove growth, whilst the food business was driven by a strong performance of culinary flavor solutions.

Nespresso continued to deliver organic growth of around 20 percent, with consumer demand growing around the world. The highly popular Limited Edition Kazaar coffee was relaunched successfully and the global roll-out of boutiques continued with openings in Doha, Innsbruck and Seoul. The Nespresso retail network is expected to exceed 300 boutiques by the end of the year.

Nestlé Health Science started its second year well, with North America, Latin America and Asia as highlights. The 2011 acquisitions performed in line with expectations.

Cereal Partners Worldwide’s strong emerging market performance was balanced by slower growth in developed markets. The realignment of Beverage Partners Worldwide to focus more on developed markets, mainly in Europe, is changing the joint venture’s growth profile. Its brands in faster growth emerging markets will now be managed by the Nestlé zones. Our pharmaceutical joint ventures had a solid start to the year, with positive growth.