Nestlé have announced weaker than expected first-quarter results, with organic growth of 4.3 per cent during the first three months of 2013, with a cold European spring, the horse meat scandal and conflict in Syria all taking their toll on the Swiss company's operations.
The company also saw a significant slowing of growth in the Africa, Oceania & Asia region, down to 4.4 per cent from 8.4 per cent for the full year of 2012. According to Nestlé CEO Paul Bulcke, "The start to the year reflects the caution we expressed in February", with an unchanged outlook for the full year, with growth of between 5 per cent and 6 per cent predicted for the year.
Bulcke continued, "We continue to expect some volatility throughout 2013 but reconfirm our expectation to deliver on our commitments for the full year: top line, bottom line and capital efficiency."
Europe saw sales of CHF 3.7 billion, with 1.5 per cent organic growth. According to the company, ice cream and water sales were 'impacted by the late arrival of spring'. Frozen and pizza categories were negatively impacted by the on-going horse meat scandal, which rumbled on throughout the company's first quarter. Purina Petcare maintained its 'strong growth momentum' in the region with innovation in its Gourmet and Felix brands.
Coffee performed well overall, particularly in two of its biggest markets, Great Britain and Russia, with Nescafé's Dolce Gusto and Gold brands cited as highlights. France had a 'slow start following a strong performance last year', while Germany continued to build momentum. Greece and Portugal achieved good performances 'despite the tough trading environment'.
Nestlé's performance in the Americas was 'broad-based', with particular growth in pet care, dairy, chocolate, powdered beverages and culinary. In North America, Nestlé's Coffee-Mate, DiGiorno and Nescafé ice cream brands performed well. Latin America saw strong growth in dairy and ice cream. Nestlé's Nutrition sector saw organic growth of 7.6 per cent, while its water sales saw just 1.8 per cent organic growth. Nestlé Professional grew saw the geographic footprint of is Nespresso brand grow outside Europe.
Commenting on the first-quarter results, Nestlé CEO Paul Bulcke said, "We are outperforming the market in Europe where consumer sentiment remains low. We are seeing progress in our North American business and we expect to see stronger momentum in key emerging markets." (19 April)
© 2013 - ESM: European Supermarket Magazine by Ellen Lunney
