Nestlé 9-month sales: continuation of strong first-half momentum
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Nestlé 9-month sales: continuation of strong first-half momentum
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* Group sales of CHF 82.8 billion, 6.1% organic growth, 4.5% real internal
growth
* Food and Beverages sales of CHF 77.0 billion, 5.7% organic growth, 4.2% real
internal growth
* Growth in all regions and categories, double-digit organic growth in
emerging markets
* Full-year Food and Beverages outlook unchanged: organic growth of around 5%
combined with an EBIT margin increase in constant currencies
Paul Bulcke, Nestlé CEO: "Our performance is the result of clear strategic
alignment and focus on execution throughout the whole organisation, both in
developed and in emerging markets. Our ongoing efforts on the cost side combined
with increased investment in our brands, innovation, capabilities and people
have, as previously stated, prepared us well for the second half. Indeed, the
first half's growth momentum continued unabated in the third quarter, providing
a good base for the full year as we face challenging comparatives in the final
quarter. We therefore reconfirm that our Food and Beverages business will
achieve organic growth of around 5% combined with an increase in EBIT margin in
constant currencies for 2010 as a whole."
Vevey, 22 October 2010 - In the first nine months of 2010, Group sales amounted
to CHF 82.8 billion, consisting of 6.1% organic growth, including 4.5% real
internal growth. Foreign exchange impacted sales by -2.7%, whilst acquisitions,
net of divestitures, added 0.7%. Overall, Group sales increased by 4.1%. Food
and Beverages sales reached CHF 77.0 billion, consisting of 5.7% organic growth,
including 4.2% real internal growth. Foreign exchange impacted sales by -2.8%,
whilst acquisitions, net of divestitures, added 1.6%. Overall, Food and
Beverages sales rose by 4.5%.
The nine month sales reflect a continuation of the strong, broad-based growth
seen earlier in the year, with the organic growth for both the Group and the
Food and Beverages business unchanged from the first half.
* The organic growth for all Food and Beverages operations was 5.5% in the
Americas, 3.3% in Europe and 10.7% in Asia, Oceania and Africa. Western
Europe and North America grew and emerging markets achieved around 11%
organic growth.
* Key drivers of this consistent performance included deeper distribution in
emerging markets in support of our value-priced popularly positioned
products (PPPs); a strong pipeline of targeted innovation combined with
increased brand support; and the continued success of premium product
initiatives around the world.
Business Review
Zone Americas
Sales of CHF 25.0 billion, 5.7% organic growth, 2.7% real internal growth
* The North American business performed well, achieving growth and broad-based
improvements in market shares. A key contributor was innovation backed by
increased brand support, including the launches of Willy Wonka in chocolate,
Market Creations in Lean Cuisine, Café Collection in CoffeeMate, Nescafé
Dolce Gusto, Dollar Cups in Dreyer's and Häagen Dazs, as well as a range of
innovations in petcare under the ONE and ProPlan brands.
The trends in frozen food's nutritional segment remained unchanged, with
subdued consumer demand for Lean Cuisine and Lean Pockets. The family packs and
more value-focused offerings of Stouffer's and Hot Pockets saw a pick-up in
growth, whilst frozen pizza and Buitoni, in chilled, continued to gain share.
The petcare business performed well with all segments showing good growth, and a
positive reception for the relaunches of ONE and Dog Chow. Confectionery also
continued to achieve good growth. The premium segment of the ice cream market
remained weak, but the snacks segment with brands such as Nestlé Drumstick and
Skinny Cow, together with Häagen Dazs in super-premium, compensated.
* Latin America continued to perform strongly, particularly Brazil and Mexico.
Culinary, beverages and petcare were among the categories which achieved
double-digit organic growth. Milk benefited from launches in ready-to-drink
and a range of nutritionally enhanced products with fortified or lactose-
free options. The whole region benefited from a multi-tier strategy with
products adapted to different price levels, from PPPs such as Nescafé sticks
to premium offerings such as Nescafé Dolce Gusto, which is now launched in a
number of markets including Brazil, Mexico, Argentina and Chile.
Zone Europe
Sales of CHF 15.9 billion, 2.0% organic growth, 1.3% real internal growth
* All key Western European markets, including Germany, France, the UK, Italy
and the Iberian region, saw good growth, helped by the continued strong
performance of recent innovations and roll-outs such as Nescafé Dolce Gusto,
Nescafé Green Blend, Maggi Juicy Chicken and Nestlé Grand Chocolat. Our
market share performance was good, with gains in most countries and
categories. Increased distribution, improved customer service level and the
development of PPPs as well as premium offerings were driving performance.
* Central and Eastern Europe were recovering. Consumption levels in Russia
remained challenging, but our market shares are improving, and there are
some signs of a pick-up in the market.
* The Zone's performance was broad-based by category, with good contributions
from frozen and chilled culinary, brands such as Herta in charcuterie, and
Buitoni and Wagner in pizza, as well as Maggi in culinary and Friskies,
Gourmet and ProPlan in petcare. Chocolate, in the 75(th) anniversary year of
the launch of KitKat, also performed well in Western Europe.
Zone Asia, Oceania and Africa
Sales of CHF 12.9 billion, 9.2% organic growth, 7.7% real internal growth
* The Zone's emerging markets achieved double-digit organic growth, with PPPs
such as Maggi Noodles and Nestea Litro as a key growth driver. The
performance was broad-based by market and region, with Greater China,
Indonesia, the Philippines, Africa, the Middle East, South Asia, which
includes India, and Indochina, which includes Vietnam, all contributing
well.
* Growth in Oceania and Japan was good, driven primarily by Japan where the
Nescafé systems Dolce Gusto and Barista performed well. Innovation also
brought increased interest to the Nescafé sticks and jars segment.
* The Zone's performance reflects high single-digit or double-digit organic
growth in most categories. Among highlights were dairy and culinary, ready-
to-drink and powdered beverages, as well as confectionery.
Nestlé Waters
Sales of CHF 7.3 billion, 4.3% organic growth, 4.6% real internal growth
* The global water market returned to growth in 2010. Nestlé Waters maintained
its recent trend of acceleration and achieved share gains in many key
markets including the United States, France, Switzerland and the UK.
* The business grew in both Europe and North America and achieved double-digit
organic growth in the emerging markets with particularly strong performances
in Asia and the Middle East, Brazil and Mexico. The whole portfolio
contributed, with the premium brands, Perrier and S. Pellegrino, enjoying
high single-digit organic growth, and the value-priced brand, Nestlé Pure
Life, achieving mid-teens organic growth.
Nestlé Nutrition
Sales of CHF 7.8 billion, 6.8% organic growth, 5.9% real internal growth
* Infant Nutrition accelerated during the year with, in general, good market
share performances. Infant formula achieved double-digit organic growth
whilst baby food was high single-digit. Many emerging markets, including
Russia, Brazil, South Asia, Indonesia, China and the Middle East, achieved
double-digit organic growth. Recent launches such as anti-colic infant
formula and infant cereals with probiotics were well received, with
increased brand support adding further impetus to the division. The
performance in the United States continued to be very strong, with Gerber
bringing momentum to both the baby food and infant formula categories. In
Western Europe, infant formula grew strongly.
* Healthcare Nutrition maintained its sales momentum with good contributions
from France, Spain and the emerging markets. All key strategic platforms
showed good growth with particularly strong performances in critical care
and pediatrics.
* Weight Management remained challenged by the tough economic environment in
the United States, but growth in Jenny Craig At Home (the Home delivery
business) was compensating the lower number of visitors to Jenny Craig
Centers. Europe saw encouraging early results of the French and British
Jenny Craig roll-outs.
Other Food and Beverages
Sales of CHF 8.0 billion, 9.5% organic growth, 8.3% real internal growth
* Nestlé Professional achieved good growth, mainly due to its exposure to the
emerging markets, where it continued to enjoy strong growth. The out-of-home
industry in developed markets continued to be subdued in line with general
economic conditions, but our business benefited from increased distribution
in European commercial channels and from good performance in the North
American beverage business. This was partly due to proprietary Nescafé
solutions and the successful integration of the Vitality business acquired
in 2009.
* Nespresso continued to perform at a high level around the world, including
in its biggest European markets, with organic growth above 20%. It continued
its global roll-out of boutiques, with openings in Shanghai, Munich and New
York in recent months, and is expected to have over 220 boutiques around the
world by the end of the year.
* The joint ventures, Cereal Partners Worldwide and Beverage Partners
Worldwide, continued to achieve good growth.
Pharma
Sales of CHF 5.8 billion, 10.6% organic growth, 8.9% real internal growth
* This includes Alcon for about eight months only. All constituents
contributed well.
Corporate highlights
Over the third quarter of 2010, we
* completed the sale of our remaining shares in Alcon to Novartis,
representing around 52% of Alcon's share capital, for USD 28.3 billion
* announced the creation of Nestlé Health Science S.A. and the Nestlé
Institute of Health Sciences to pioneer a new industry between food and
pharma
* launched the Nescafé Plan in Mexico City, announcing investments of CHF 500
million over ten years in coffee projects and doubling of direct coffee
purchases
* announced the establishment of an R&D Centre in India, mainly dedicated to
the development of PPPs
* acquired Waggin' Train, a leading marketer in the fast growing dog snacks
segment based in the United States, as well as a majority participation in
Malher Group in Guatemala, a marketer and distributer of culinary products
and powdered beverages under brands such as Malher, Yus and Toki
* inaugurated new facilities in emerging markets such as an infant cereal
plant in Ghana and a CoffeeMate factory for Latin America and the Caribbean
in Mexico
* announced the investment of CHF 25 million in a new shared service center in
L'viv, Ukraine, to consolidate our financial and Human Resources services in
Central and Eastern Europe
Outlook
Our performance year-to-date, even as we face challenging comparatives in the
final quarter, enables us to reconfirm our full-year guidance, that the Food and
Beverages business will achieve organic growth around 5% as well as an
improvement in the EBIT margin in constant currencies.
Contacts Media Robin
Tickle Tel.: +41 21 924 22 00
Investors Roddy
Child-Villiers Tel.: +41 21 924 36 22
Annex
9-month sales overview 2010
+--------------------+--------------+--------------+-------------+-------------+
| |Jan.-Sept. |Jan.-Sept. |Jan.- Sept. |Jan.-Sept. |
+--------------------+2010 Sales in |2009 Sales in |2010 Organic |2010 Real |
| |CHF millions |CHF millions |Growth (%) |Internal |
| | | | |Growth (%) |
+--------------------+--------------+--------------+-------------++------------+
|By operating segment |
+--------------------+--------------+--------------+-------------++------------+
|Food and Beverages | | | | |
| | | | | |
|· Zone Americas | 24'985 | 23'393 | 5.7 | 2.7 |
+--------------------+--------------+--------------+-------------+-------------+
|· Zone Europe | 15'946 | 16'514 | 2.0 | 1.3 |
+--------------------+--------------+--------------+-------------+-------------+
|· Zone Asia, | 12'941 | 11'713 | 9.2 | 7.7 |
|Oceania, Africa | | | | |
+--------------------+--------------+--------------+-------------+-------------+
|Nestlé Waters | 7'274 | 7'220 | 4.3 | 4.6 |
+--------------------+--------------+--------------+-------------+-------------+
|Nestlé Nutrition | 7'842 | 7'479 | 6.8 | 5.9 |
+--------------------+--------------+--------------+-------------+-------------+
|Other Food & | 8'034 | 7'390 | 9.5 | 8.3 |
|Beverages | | | | |
+--------------------+--------------+--------------+----+--------++------------+
|Nestlé Food and | 77'022 | 73'709 |5.7 | 4.2 |
|Beverages | | | | |
+--------------------+--------------+--------------+----+---------+-------------
|Pharma (incl. Alcon)| 5'748 | 5'838 |10.6| 8.9 |
+--------------------+--------------+--------------+----+---------+-------------
|Total Group | 82'770 | 79'547 |6.1 | 4.5 |
+--------------------+--------------+--------------+----+---------+-------------
|By Product |
+--------------------+--------------+--------------+----+---------+-------------
|Powdered and liquid | 15'006 | 13'952 |8.0 | 6.3 |
|beverages | | | | |
+--------------------+--------------+--------------+----+---------+-------------
|Water | 7'280 | 7'224 |4.3 | 4.6 |
+--------------------+--------------+--------------+----+---------+-------------
|Milk products and | 15'531 | 14'883 |6.1 | 3.8 |
|ice cream | | | | |
+--------------------+--------------+--------------+----+---------+-------------
|Nutrition | 7'844 | 7'481 |6.8 | 5.9 |
+--------------------+--------------+--------------+----+---------+-------------
|Prepared dishes and | 13'162 | 12'379 |3.5 | 2.9 |
|cooking aids | | | | |
+--------------------+--------------+--------------+----+---------+-------------
|Confectionery | 8'535 | 8'177 |7.4 | 3.7 |
+--------------------+--------------+--------------+----+---------+-------------
|PetCare | 9'664 | 9'613 |4.0 | 2.6 |
+--------------------+--------------+--------------+----+---------+-------------
|Pharmaceutical | 5'748 | 5'838 |10.6| 8.9 |
|products | | | | |
+--------------------+--------------+--------------+----+---------+-------------
|Total Group | 82'770 | 79'547 |6.1 | 4.5 |
+--------------------+--------------+--------------+----+--------++-------------
Nestlé Waters, Nestlé Nutrition and Other Food & Beverages (including Nestlé
Professional) are not included in the Zones. The slight difference in the
figures for water and nutrition between the "Sales by operating segment" and
"Sales by product" tables is due to the fact that some water and nutrition
products are also sold by operating segments other than Nestlé Waters and Nestlé
Nutrition.
Pharmaceutical activities include Alcon discontinued operations until August
25(th) 2010, the date of the disposal of Nestlé's interest in Alcon to Novartis.
[HUG#1454267]
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Datum: 22.10.2010 - 07:15 Uhr
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