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Nestle SA (NSTR)

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Wednesday 22 April, 2009

Nestle SA

First-quarter sales performan

RNS Number : 9573Q
Nestle SA
22 April 2009
 

Nestlé first-quarter sales performance enables confirmation of full-year outlook


  • Sales of CHF 25.2 billion, 3.8% organic growth, 0.3% real internal growth

  • 7% organic growth in emerging markets, 2% in developed markets

  • Full-year outlook: organic growth at least approaching 5% together with a further improvement in EBIT margin in constant currencies


Paul Bulcke, CEO of Nestlé: 'The Group achieved positive organic growth in the first quarter of 2009, despite tough comparisons with Nestlé's near 10% organic growth over the same period last year. Our response to the challenging economic environment in 2009 has been to seize new opportunities, accelerating key initiatives in areas such as product affordability, innovation and renovation, as well as cost efficiencies. The increasing momentum from such initiatives, as well as the strength of our brands and our worldwide geographic presence, enables me to confirm our guidance for 2009 as a whole.'


Vevey, 22 April 2009 - In the first quarter of 2009, Nestlé achieved organic growth of 3.8%, including 0.3% real internal growth. Acquisitions, net of divestitures, had a negative impact of -0.7% on Group sales, as did the currency effect of -5.2% due to the strength of the Swiss franc compared to most other currencies. These two factors resulted in a reduction in Nestlé Group sales of 2.1%, to CHF 25.2 billion.



Sales by management responsibility 


In the first quarter of 2009, the organic growth of Nestlé's total Food and Beverages business (including the Zones and globally-managed businesses such as Nestlé Waters, Nestlé Nutrition, Nestlé Professional, Nespresso and the Food and Beverages joint ventures) was 3.6%, with 0.7% in Europe, 5.0% in the Americas and 6.5% in Asia, Oceania and Africa.



Jan-March
2009

Sales 

in CHF millions

Jan-March
2008

Sales 

in CHF millions 

Jan-March 2009
Real Internal Growth (%)

Jan-March 2009
Organic Growth (%)

Food & Beverages

 Zone Europe


5 241


5 953


- 1.3%


+ 0.5%

 Zone Americas

7 487

7 095

+ 2.0%

+ 7.1%

 Zone Asia, Oceania, Africa

3 744

3 782

+ 0.8%

+ 5.8%

Nestlé Waters

2 068

2 164

- 4.0%

- 2.5%

Nestlé Nutrition

2 420

2 577

- 4.3%

0.0%

Other Food & Beverages

2 338

2 373

+ 3.1%

+ 6.8%

Total Food & Beverages

23 298

23 944

- 0.1%

+ 3.6%

Pharma

1 876

1 773

+ 6.1%

+ 5.4%

Group Total 

25 174

25 717

+ 0.3%

+ 3.8%

All calculations based on non-rounded figures

Globally managed Nestlé Professional activities have been taken out of the Zones and included in 'Other Food & Beverages'. 2008 comparatives have been restated. 


Zone Europesales of CHF 5.2 billion, 0.5% organic growth and -1.3% real internal growth. Consumer demand was subdued in Western Europe, whilst the performance of the Zone as a whole was impacted by the comparison with a strong first quarter in 2008 and the late start to the ice cream season. France and the UK were the strongest performers. In Central and Eastern Europe, pricing due to currency devaluations was the main contributor to organic growth. Overall, soluble coffee and petcare achieved the strongest growth.


Zone Americassales of CHF 7.5 billion, 7.1% organic growth and 2.0% real internal growth. Both North and South America achieved good performances with mid single-digit organic growth. In North America, frozen food, ambient dairy, soluble coffee and petcare performed well. In Latin Americaambient culinary products, soluble coffee, ice cream, petcare and biscuits showed strong growth


Zone Asia, Oceania and Africasales of CHF 3.7 billion, 5.8% organic growth and 0.8% real internal growth. The vast majority of the Zone's emerging markets achieved positive organic growth despite lower reported pricingAmongst the developed markets, there was a strong performance in Oceania, whereas Japan was somewhat softer. Overall, soluble coffee, petcare and confectionery delivered double-digit organic growth.


Nestlé Waters: sales of CHF 2.1 billion, -2.5% organic growth and -4.0% real internal growth. This reflects the continued adverse trend in the bottled water industryparticularly in Western Europe and the home-and-office segment in North America. Nestlé's retail business in North America gained market share. The emerging market business enjoyed double-digit organic growth. Nestlé Pure Life achieved double-digit organic growth with both the emerging markets and North America contributing. 


Nestlé Nutrition: sales of CHF 2.4 billion, 0% organic growth and -4.3% real internal growth. This reflects the impact of the comparison with 14.4% organic growth in the first quarter of 2008, as well as weak growth in the European infant nutrition business and softer market conditions in the US, particularly affecting Jenny Craig. However, many emerging markets enjoyed good growth, supported by a strong innovation and renovation pipeline. The European roll-out of the NaturNes range continued to gather pace.


Other Food and Beverages: sales of CHF 2.3 billion, 6.8% organic growth and 3.1% real internal growth. Nespresso again achieved an outstanding double-digit organic growth. Cereal Partners Worldwide continued to perform well. Nestlé Professional was affected by a softer out-of-home market, especially in developed countries




Sales by product category



Jan-March 2009
Sales

in CHF millions

Jan-March 2008
Sales

in CHF millions

Jan-March 2009
Real Internal Growth (%)

Jan-March 2009
Organic Growth (%)

Powdered and Liquid Beverages

4 437

4 373

+ 4.7%

+ 9.7%

Water

2 069

2 165

- 4.1%

- 2.5%

Milk Products and Ice Cream 

4 285

4 627

- 3.0%

- 0.2%

Nutrition 

2 421

2 579

- 4.3%

0.0%

Prepared Dishes and Cooking Aids

4 119

4 310

- 0.5%

+ 1.0%

Confectionery 

2 747

2 968

- 1.1%

+ 4.3%

PetCare

3 220

2 922

+ 5.0%

+ 11.5%

Total Food & Beverages

23 298

23 944

- 0.1%

+ 3.6%

Pharmaceutical Products

1 876

1 773

+ 6.1%

+ 5.4%

Group Total

25 174

25 717

+ 0.3%

+ 3.8%

All calculations based on non-rounded figures

The slight difference in the figures for water and nutrition between the 'Sales by management responsibility' and 'Sales by product category' tables is due to the fact that some water and nutrition products are also sold by management segments  other than Nestlé Waters and Nestlé Nutrition.



Powdered and liquid beverages: sales of CHF 4.4 billion, 9.7% organic growth and 4.7% real internal growth. Nescafé continued to benefit from its programme of renovation launched in 2008, as well as the increasing pace of the international roll-out of Nescafé Dolce Gusto. The strong nutritional credentials of Milo and Nesquik continued to drive growth for both their powdered and liquid variants. Nespresso continued its outstanding performance. Overall, the product group achieved double-digit organic growth in the Americas and Asia, Oceania and Africa.


Milk products and ice cream: sales of CHF 4.3 billion, -0.2% organic growth and -3.0% real internal growth. These figures reflect the comparison with 16.0% organic growth in the first quarter of 2008. In the dairy category, currency devaluations in some emerging markets created pricing pressure and impacted demand. However, the category continued to benefit from a multi-tier strategy with products adapted to different affordability levels and nutritional needs. Ice cream was strongly impacted by reduced out-of-home consumption as well as a late start to the season in Europe. In the US, the super-premium brand Häagen Dazs performed well, as did Skinny Cow and Drumstick. Emerging markets benefited from the roll-out of new ice cream offerings for lower income consumers such as Nestlé Sorbets and Ice Buko in the Philippines.


Prepared dishes and cooking aids: sales of CHF 4.1 billion, 1.0% organic growth and -0.5% real internal growth. Maggi culinary products performed well in Asia, Eastern Europe and Latin AmericaIn Europe, there was weaker growth from culinary and frozen prepared meals, but stronger growth from the Wagner and Buitoni pizza businesses as well as Herta in FranceIn the USLean Cuisine had a slow start, but Hot Pockets and Stouffer's family meals maintained their good growth momentum. 


Confectionery: sales of CHF 2.7 billion, 4.3% organic growth and -1.1% real internal growth. The emerging markets in Asia, Africa and the Middle East continued to enjoy strong growth. The UK also performed well, particularly KitKat, which achieved double-digit growth. In Eastern Europe, the combination of the economic downturn, the increase in the cocoa price and currency devaluations resulted in reduced demand. In North America, growth continued to be impacted by the resizing of the portfolio. In Latin America, the biscuit business achieved strong double-digit organic growth with brands such as Passatempo in Brazil and Kuky in Chile.


PetCare: sales of CHF 3.2 billion, 11.5% organic growth and 5.0% real internal growth. This excellent performance reflects resilient demand for key premium and super premium Purina brands such as Dog ChowBenefulPro Plan and Cat ChowThe growth of the business was supported by products at different price points as well as the continued success of the 2008 launches. The product category achieved strong organic growth in Europe and double-digit organic growth in the other zones.


Pharmaceutical products: sales of CHF 1.9 billion, 5.4% organic growth and 6.1% real internal growth. Alcon and the joint-venture Galderma contributed to the organic growth. 



Full-year outlook


Nestlé's first-quarter sales performance of 3.8% organic growth, combined with the expected benefits from several initiatives already in progress in the markets and product groups, enables us to confirm our guidance for 2009: organic growth at least approaching 5% together with further improvement of the EBIT margin in constant currencies. This expected performance is in line with the long-standing Nestlé model.



    

Contacts                 Media         Robin Tickle               Tel.: +41 (0)21 924 22 00

                               Investors    Roddy Child-Villiers    Tel.: +41 (0)21 924 36 22



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