Nestle Q1 Sales Climb; Backs Full-year Outlook
Swiss foods giant Nestle SA (NSRGY, NSTR.L) Friday reported higher first-quarter sales reflecting both real internal growth and pricing. The company continued to grow in all its operating geographies. Organic sales growth was 4.4 percent. Nestle also confirmed its organic growth outlook for the full-year.
"Our three-month sales growth was in line with expectations and driven by both real internal growth and pricing. We delivered good performances in Zone EMENA, Nestlé Waters and Other businesses. We continued our efforts to restore momentum in Zone AOA and in North America, and expect these initiatives to gain traction throughout the year," CEO Paul Bulcke said in a statement.
The Vevey, Switzerland-based maker of Maggi noodles and Nescafe reported total group sales in the first quarter of 20.92 billion Swiss francs or $21.87 billion, up 0.5 percent from 20.82 billion francs in the prior-year quarter. Nestle said acquisitions, net of divestitures, added 0.6 percent to sales.
During the first quarter, organic growth was 4.4 percent, comprising 1.9 percent real internal growth and 2.5 percent pricing.
The firm continued to grow in all geographies with a sales growth of 5.6 percent in the Americas or AMS, 4.5 percent in Europe, Middle East and North Africa or EMENA, and 2.2 percent in Asia, Oceania and Africa or AOA. The developed markets improved 2.5 percent and the emerging markets 6.7 percent.
In Zone AMS, sales edged down 0.1 percent to 5.84 billion francs. Organic growth 3.7 percent, while real internal growth was a negative 0.2 percent. North American sales were off to a slow start, with frozen meals category remained challenged. Latin America was impacted by the worsening macroeconomic environment.
Sales in Zone EMENA declined 7.6 percent to 3.91 billion francs. Organic growth was 5.3 percent, and real internal growth was 3.9 percent. Switzerland and Greece had a slower start, but good growth was seen in Poland, Russia and Ukraine despite inflationary pressures. There was also solid volume growth in the Middle East and North Africa regions, despite the challenging environment in Iraq and Yemen.
Sales remained flat with last year in Zone AOA at 3.57 billion francs. Organic growth a negative 0.2 percent, and real internal growth was a negative 2.3 percent. The Zone had a slow start to the year, mainly due to China and the slowdown in Nigeria.
Nestlé Waters sales increased 6.2 percent to 1.70 billion francs. Organic growth was 7.3 percent and real internal growth was 7.5 percent. Nestlé Nutrition sales edged up 0.8 percent to 2.63 billion francs. Organic growth was 4.3 percent and real internal growth was 1.3 percent. Sales improved 11.6 percent for other businesses to 3.26 billion francs. Organic growth was 8.1 percent and real internal growth was 5.9 percent.
Looking ahead, Nestle confirmed its full-year outlook, and said it aims to achieve organic growth of around 5 percent with improvements in margins, underlying earnings per share in constant currencies and capital efficiency. In Zurich, Nestle shares gained 0.65 francs on Thursday, and settled at 76.65 francs. (dpa)
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