Nestlé Confirms Outlook As Volume Growth Picks Up
Food group Nestlé confirmed its full-year guidance after organic sales growth accelerated to 2.8 percent in the first quarter of 2018, helped by improving volumes.
Packaged food companies have seen their sales slow as consumers prefer fresh foods and have reacted by cutting costs, divesting underperforming businesses and increasing innovation efforts.
The maker of KitKat chocolate bars and Maggi soups confirmed on Thursday its target to grow organic sales by 2-4 percent this year and improve its trading operating margin.
Quarterly organic growth of 2.8 percent, which strips out currency swings and portfolio changes, was ahead of the average estimate of 2.5 percent in a Reuters poll and up from 1.9 percent in the final quarter of 2017.
Volume growth picked up to 2.6 percent, from 1.2 percent in the final quarter of 2017, but prices rose by only 0.2 percent, Nestlé said in a statement. Price pressures were illustrated by a price row with European retailers.
Growth in the Americas accelerated to 1.2 percent and Asia was also better than the previous quarter at 4.7 percent, while Europe, the Middle East and North Africa slowed to 2.2 percent, hit by declining prices, Nestlé said.