Nestlé sees growth in 9 months
Swiss dairy giant Nestle reported nine-month sales of CHF 60.9 billion (EUR49.9bn), which amounts to 7.3% organic growth, including real internal growth of 4.1%. Good growth was reported in developed markets, and double-digit growth in emerging markets. The full-year outlook is better than its original 5-6% lon-term organic growth prediction as well.
“In a tough environment, we continued to build our capabilities and positions for the future while maintaining strong growth across regions and categories,” notes Paul Bulcke, Nestle CEO. “The constant renovation of our existing product portfolio together with our strong pipeline of game-changing innovations resulted in many market share gains. A high rate of innovation also requires significant consumer-facing marketing support. For the year as a whole, in spite of input cost pressures, we expect to slightly over-perform against our long-term organic growth range of 5-6% and continue to strive for a margin improvement in constant currencies”.
The organic growth was 5.8% in the Americas, 5.0% in Europe and 13.1% in Asia, Oceania and Africa. Developed markets grew 4%, while emerging markets achieved around 13.1% organic growth.
Breaking it down, sales in the US saw 5.6% organic growth and sales of CHF19.1bn (EUR15.6bn). In North America the tough economic conditions and increased pricing led to a decline in consumption in several categories, but new lines like DiGiorno Pizza Combos, Lean Cuisine snacks, and Dreyer’s Smoothies helped mitigate the effects of the slowdown, the company says. PetCare saw accelerated growth and market share gains as did frozen pizza. Coffee-mate enjoyed strong growth thanks to new varieties of Cafe Collections and a successful launch of Coffee-mate Natural Bliss. Nescafe also performed well.
In Latin America the business continued to deliver strong growth. We pushed distribution deeper into the markets across the continent and introduced new product lines. Most categories benefited, recording double-digit growth. Among market launches were Nescafe Molienda, a new soluble coffee product with micro-granules in Mexico, and KitKat in Brazil.
Europe’s sales were CHF11.1 bn, and the company notes, “In a challenging environment Nestle outgrew the European market. In Western Europe there were market share gains in two thirds of the categories. This was achieved by our continued roll-out of innovations like Nescafe Dolce Gusto and Maggi Juicy Roasting across Europe. France was a particular highlight but there was also good growth across most of Western Europe including Italy, Switzerland and the Benelux countries. Despite the economic crisis, Greece and the Iberian region did well.”
In Central and Eastern Europe, Russia continued to be a tough market, although culinary performed well. Elsewhere in Eastern Europe growth was stronger with Ukraine achieving good results and the Adriatic region growing more than 10%.
Asia, Oceania and Africa saw sales of CHF 11.1 billion, with 11.7% organic growth and 8.2% real internal growth. The Zone’s emerging markets delivered double digit growth, and most categories were high single or double digit. “We continued to deepen our involvement in the development of Africa, making new investments and expanding our distribution networks to support popularly positioned product rollouts for categories including culinary, dairy, powdered beverages and soluble coffee. In Greater China, South Asia and Indochina we continued to achieve double-digit growth,” according to the company. “Across the region as a whole, growth was broad-based with pricing increasing over the course of the year. In particular, there was strong growth in ambient dairy with the Nestle Nido brand. Nescafe, Maggi, Milo, ice cream and ready-to-drink beverages also grew rapidly.”
