Information  X 
Enter a valid email address

Nestle SA (NSTR)

  Print      Mail a friend

Monday 21 April, 2008

Nestle SA

1st Quarter Sales

Nestle SA
21 April 2008


                                 Press  Release


      Nestle: very strong organic growth of 9.8% in first quarter of 2008

                          Full-year outlook confirmed


•          Sales of CHF 25.7bn, up CHF 1.5bn (+6%)

•          9.8% organic growth for the Group as a whole

•          9.8% organic growth for Food and Beverages

•          Continued strong real internal growth momentum: 4.5% (Group), 4.2%
           (Food and Beverages)

•          Nestle Nutrition achieves 14.4% organic growth, 10.2% real internal
           growth

•          Full-year outlook: organic growth approaching 2007 level with
           improved EBIT margins in constant currencies


Paul Bulcke, CEO of Nestle: 'The strong start to the year reflects Nestle's
momentum as the world's leading nutrition, health and wellness company. On the
basis of this high-quality growth, with a good balance between real internal
growth and pricing, I am confident that we will achieve our 2008 targets:
organic growth approaching the 2007 level together with improved EBIT margins in
constant currencies.'


Vevey, 21 April 2008  -  In the first quarter of 2008, the Nestle group reached
consolidated Swiss franc sales of 25.7 billion, up CHF 1.5 billion or 6.0% over
the same period last year. Reported sales benefited from a very strong organic
growth of 9.8%, including 4.5% real internal growth. Food and Beverages also
delivered 9.8% organic growth, of which 4.2% consisted of real internal growth.
Acquisitions, net of divestitures, added another 3.2% to Group sales, primarily
due to the acquisition of Gerber and Novartis Medical Nutrition in 2007. The net
currency effect reduced reported group sales by 7% due to the strength of the
Swiss franc compared to most other currencies.


                            Food and Beverages sales


In the first quarter of 2008, the organic growth of Nestle's total Food and
Beverages business (the Zones as well as globally-managed businesses such as
Nestle Waters, Nestle Nutrition, Nespresso, the Food and Beverages joint
ventures) amounted to 6.1% in Europe, 10.9% in the Americas and 14.9% in Asia,
Oceania and Africa.


           Sales by management responsibilities and geographic areas


                                  Jan.-March 2008    Jan.-March 2007     Jan.-March 2008      Jan.-March 2008
                                       Sales              Sales           Real Internal     Organic Growth (%)
                                  in CHF millions    in CHF millions       Growth (%)
Food & Beverages

• Zone Europe                            6 690              6 497                2.9%                  6.6%
• Zone Americas                          7 457              7 393                3.7%                11.5%
• Zone Asia, Oceania, Africa             4 134              3 846                5.3%                14.0%
Nestle Waters                            2 164              2 322               -2.3%                 -0.6%
Nestle Nutrition                         2 577              1 632              10.2%                 14.4%
Other Food & Beverages (a)                  922                805             21.5%                 23.2%
Total Food & Beverages                 23 944             22 495                 4.2%                  9.8%
Pharma                                   1 773              1 756                8.9%                  8.5%
Group Total                            25 717             24 251                 4.5%                  9.8%

 (a) Mainly Joint ventures managed on a worldwide basis and Nespresso

All calculations based on non-rounded figures



Zone Europe: sales of CHF 6.7 billion, 6.6% organic growth, 2.9% real internal
growth. A majority of the countries in the Zone enjoyed strong performances.
Eastern Europe continued to experience double-digit organic growth. Western
Europe also did very well, with Great Britain achieving near double-digit
organic growth. By category, PetCare achieved strong growth led by premium
brands such as Dog Chow. Soluble coffee did well, including the continued
successful roll-out of Nescafe Dolce Gusto. An increased focus on Movenpick of
Switzerland helped ice cream sales in the low season.


Zone Americas: sales of CHF 7.5 billion, 11.5% organic growth, 3.7% real
internal growth. Both North and Latin America achieved good organic growth.
Pricing and other actions were applied across the Zone in response to continued
input cost rises. The good performance of brands such as Nescafe, Nesquik, Nido,
Coffeemate, Garoto and Dog Chow ensured strong organic growth in their
respective product groups.


Zone Asia, Oceania and Africa: sales of CHF 4.1 billion, 14.0% organic growth,
5.3% real internal growth. The Zone's strong real internal growth was due to the
strength of key brands such as Nescafe, Milo, Nido and Maggi, and it delivered
double-digit organic growth in many product groups. Emerging markets did
particularly well, especially South Asia, the Middle East, Indochina and the
Philippines. Dairy products achieved positive real internal growth despite cost
pressures over the past year.


Nestle Waters: sales of CHF 2.2 billion, -0.6% organic growth, -2.3% real
internal growth. These figures reflect the tough comparison with an excellent
first quarter in 2007, as well as softer market conditions in the developed
world. However, many developing markets enjoyed strong performances. Turkey, the
Middle East and Latin America delivered double-digit organic growth. In terms of
brands, Nestle Pure Life maintained strong momentum with double-digit organic
growth.


Nestle Nutrition: sales of CHF 2.6 billion, 14.4% organic growth, real internal
growth of 10.2%. This excellent performance was driven by near double-digit real
internal growth in infant nutrition, mainly due to the continued roll-out of
premium NAN starter formulas and infant cereals with branded active benefits.
Jenny Craig achieved strong double-digit organic growth and its 'improved 
health' campaign is proving a great success. The integration of Novartis Medical
Nutrition and Gerber is almost complete and these businesses are performing in
line with acquisition expectations.


                             Sales by product group

                                       Jan.-March 2008     Jan.-March 2007   Jan.-March 2008  Jan.-March 2008
                                            Sales               Sales          Real Internal   Organic Growth
                                       in CHF millions     in CHF millions      Growth (%)          (%)

Powdered and liquid beverages                4 374               4 019            10.1%            14.7%
Nestle Waters                                2 164               2 322            -2.3%             -0.6%
Milk products and ice cream                  4 629               4 340              4.6%           16.0%
Nestle Nutrition                             2 577               1 632            10.2%            14.4%
Prepared dishes and cooking aids             4 310               4 380              1.2%             5.1%
Confectionery                                2 968               2 870              2.1%             7.3%
PetCare                                      2 922               2 932              3.9%             9.5%
Total Food & Beverages                     23 944              22 495               4.2%             9.8%
Pharmaceutical products                      1 773               1 756              8.9%             8.5%
Group Total                                25 717              24 251               4.5%             9.8%

All calculations based on non-rounded figures



Powdered and liquid beverages: sales of CHF 4.4 billion, 14.7% organic growth,
10.1% real internal growth. This outstanding performance again confirmed the
strength of Nestle's billionaire brands: Nescafe, Milo, Nesquik, Nestea and
Nespresso. Furthermore, the continued success in rolling out Nescafe Dolce Gusto
in Europe allowed Nestle to increase its market share in the fast-growing
portioned coffee segment there. The product group achieved double-digit organic
growth in the Americas as well as Asia, Africa and Oceania.


Milk products and ice cream: sales of CHF 4.6 billion, 16.0% organic growth,
4.6% real internal growth. The very strong performance of milk products was the
result of high single-digit real internal growth despite cost pressures both in
2007 and 2008. Strategic billionaire brands Nido and Coffeemate enjoyed strong
performances, as did Nestle EveryDay, the emerging tea creaming brand. Ice Cream
had a good start to the year ahead of the summer season in Europe, in particular
under the Movenpick of Switzerland premium brand. The product group as a whole
achieved double-digit organic growth in the Americas, as well as in Asia,
Oceania and Africa.


Prepared dishes and cooking aids: sales of CHF 4.3 billion, 5.1% organic growth,
1.2% real internal growth. Maggi continued to deliver double-digit growth in
Africa, Asia and Eastern Europe, as well as accelerated growth in Western
Europe. In North America, frozen food was slower following recent price
increases. Chilled food achieved strong organic growth in the US, mainly driven
by Buitoni. The product group as a whole achieved double-digit organic growth in
Asia, Oceania and Africa.


Confectionery: sales of CHF 3.0 billion, 7.3% organic growth, 2.1% real internal
growth. The product group benefited from a successful Easter. KitKat had an
excellent start to the year with strong trade acceptance in the UK for KitKat
Senses and good growth in Europe after the re-launch of 4-finger KitKat in
Germany and France. Overall, Latin America continued to be an excellent
performer recording double-digit organic growth thanks to strong global and
local chocolate and biscuit brands (Brazil with Nestle assortment boxes, Chile
with the Sahne Nuss and Super 8 brands and Venezuela with Toronto and Samba).
Double-digit organic growth was also generated in the Middle East (with strong
sales of KitKat and Quality Street), in Asian markets, as well as in Great
Britain.


PetCare: sales of CHF 2.9 billion, 9.5% organic growth, 3.9% real internal
growth. Organic growth continued to be driven by strategic brands, new product
launches and product mix improvements. Both in Europe and the Americas, pricing
and other actions were taken to offset continued increases in input costs.
Several new product launches took place in the first quarter of 2008. Some
examples in the US were Healthful Life from Purina Cat Chow, the innovative Tidy
Cat Breeze litter system as well as the national rollout of Beneful prepared
meals. Super premium wet cat offerings under the Fancy Feast, Gourmet Gold and
Mon Petit brands performed well. The product group achieved strong organic
growth in Europe and North America and double-digit organic growth in the rest
of the world.


Pharmaceutical products: sales of CHF 1.8 billion, 8.5% organic growth, 8.9%
real internal growth. Both Alcon and the joint ventures achieved strong organic
growth.



                             Corporate developments


Nestle's recently-announced agreement to sell a 24.85% share of Alcon to
Novartis is further evidence of the Group's strategy of focusing on its
recognized leadership in nutrition, health and wellness. The proceeds of the
transaction, which is subject to regulatory approval and expected to be
completed by the autumn, will be used to reduce debt as Nestle pursues its
on-going share buy-back programme.



At Nestle's Annual General Meeting on 10 April 2008, shareholders approved the
cancellation of 10,072,500 shares repurchased under the share buy-back programme
launched on 24 August 2007, as well as a 1-for-10 share split to increase the
liquidity and tradability of Nestle shares. These measures will be completed by
the end of June.



                                    Outlook


The Group expects raw material cost pressures to abate somewhat in the course of
2008 and its reported pricing to come down in the second half of the year.
However, in view of its strong start to the year, Nestle foresees organic growth
approaching the 2007 level for the full year, clearly above the company's
long-term target, together with improved EBIT margins in constant currencies.
2008 will be another year of delivering the Nestle model.



2008 First Quarter Sales (Press Release and Conference Call)


Details for the day:

http://www.nestle.com/InvestorRelations/Events/CurrentEvent/CurrentEvent.htm



07:30 CET

Press Release

http://www.nestle.com/MediaCenter/PressReleases/PressReleases.htm


Conference Call Presentation Slides

http://www.nestle.com/MediaCenter/Presentations/Sales+and+Results/Sales+and+Results.htm


08:30 CET
Conference Call Webcast

http://clients.world-television.com/nestle/q108/

We recommend that you access this link a few minutes before the conference call
begins to download any necessary software.


Conference Call by Phone

You can also follow the conference via the telephone on the following
listen-only lines:

UK / Europe:                   +44 (0) 12 9648 0100                                     Access code: 914798#



Conference Call Audio Replay

The conference call will also be available as audio archive for 30 days shortly
after the event ends.

Replay numbers:

UK:                           0800 032 9687                                          Access code: 93659563#

Continental Europe:           +44 (0) 207 136 9233                                   Access code: 93659563#

USA:                          +1 617 801 6888 / +1 888 286 8010                      Access code: 93659563#


Contacts:      Media:           Francois-Xavier Perroud    Tel.: +41-21-924 2596

               Investors:       Roddy Child-Villiers       Tel.: +41-21-924 3622


                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                                                                                                                                                           

a d v e r t i s e m e n t