Trade Resources Company News Nestle Has Booked an Increase in First-Quarter Sales Thanks to Strong Growth

Nestle Has Booked an Increase in First-Quarter Sales Thanks to Strong Growth

Nestle has booked an increase in first-quarter sales thanks to strong growth in emerging markets offsetting a weaker performance in the US and Europe.

Nestle Q1 Sales Climb on Emerging Market Growth

Group sales in the first three months of 2012 came in ahead of analyst expectations at CHF21.4bn (US$28.16bn), an increase of 5.6% on last year. Sales grew 7.2% on an organic basis. According to Sanford Bernstein analyst Andrew Wood, the results were above analyst forecasts.

The company uses a sales measure called "real internal growth", which excludes M&A, price increases and currency movements. By that metric, sales increased 2.8%.

The Kit-Kat maker said sales in emerging markets grew 13% compared with 3.1% growth in developed countries.

In Europe, sales reached CHF3.6bn, representing organic growth of 2.3%, and real internal growth of 0.2%. 

In the Americas, sales amounted to CHF6.5bn, representing 6.2% organic growth. However, real internal growth was down 0.4%.

The North American market continued to be impacted by weak consumer sentiment with declining growth in a number of categories where pricing was higher, including frozen food. Coffee was the strongest category, while Nestle gained share in pizza and chocolate, it said.

In Asia, Oceania and Africa, sales grew on an organic basis by 11.4% to CHF4.6bn. The division achieved real internal growth of 7.2%. Greater China, South Asia, Africa and the Middle East all achieved double-digit growth.

"As anticipated, 2012 is already confirming itself to be a challenging year," said Nestle CEO Paul Bulcke. "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."

Nestle said high commodity prices were still a headwind for the first half of the year but predicted a "likely improved raw material environment" in the second half. It confirmed its full-year guidance of a 5-6% increase in sales on an organic basis, together with an "improvement" in year-end margin and underlying EPS.

Nestle shares were down 0.44% to CHF56.95 at 09:28 GMT today.

Source: http://www.just-food.com/news/nestle-q1-sales-climb-on-emerging-market-growth_id118914.aspx
Contribute Copyright Policy
Nestle Q1 Sales Climb on Emerging Market Growth