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Nestlé Sees 2.6% Organic Growth In First Three Quarters

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Nestlé Sees 2.6% Organic Growth In First Three Quarters

Nestlé has reported organic growth of 2.6% in the first nine months of the year, with sales of CHF 65,272 million (€56,579 million).

However, this represents a 0.4% decline in reported sales, which the consumer goods giant says were affected by divestments and negative foreign exchange effects.

Although the group was faced with a difficult trading environment in several regions, Western Europe returned to positive organic growth, driven by coffee and confectionery.

"Our sales results for the nine-month period are in line with our expectations communicated in July," said Mark Schneider, CEO of Nestlé.

"Organic sales growth continued to benefit from industry-leading volume growth, which illustrates our ability to innovate and meet consumer demand."

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Regional Performance

The company's Americas unit experienced organic growth of 1.3% due to a strong performance in Latin America. However, growth in North America was flat as a result of soft consumer demand. Coffee creamers, pet care and frozen food generated growth, offset by declines in confectionery and ice cream.

In Europe, Middle East and North Africa, organic growth improved to 1.9%. Signifiant gains were seen in Western Europe, boosted by coffee confectionery and culinary products, while the the other areas continued their strong momentum.

Finally, in Asia, Oceania, and sub-Saharan Africa, organic growth was strong, reaching 5.3%. In particular, gains were seen in China and southern Africa.

Outlook

Nestlé has confirmed its sales guidance for 2017, and expects organic growth for the full year to be around the same level as the first nine months.

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"Improving our efficiency is a key priority," added Schneider. "We have identified further opportunities to accelerate our margin improvement, leading to a further increase in restructuring and related expenses in 2017."

"Consequently, we now expect our trading operating profit margin to decrease by 40-60 basis points. The development of our underlying trading operating profit margin is fully in line with our expectations for 2017.”

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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