Nestlé 9-month sales: 3.6% organic growth based on increased real
internal growth momentum
(Thomson Reuters ONE) - Corporate news announcement processed and transmitted by Hugin AS.The issuer is solely responsible for the content of this announcement. ------------------------------------------------------------------------------------ * Sales of CHF 79.5 billion, 3.8% organic growth in third quarter * Real internal growth up to 1% for nine months, 2% real internal growth in third quarter * 2009 share buyback increases from CHF 4 billion to CHF 7 billion due to solid operational performance * Full-year outlook unchanged: volume-driven organic growth acceleration and EBIT margin improvement in constant currenciesPaul Bulcke, CEO of Nestlé: "The increased momentum of real internalgrowth in the third quarter, coming on top of high growth in 2008,once again proves the strength of Nestlé's strategy. In thesechallenging times, we have been streamlining our structures andproduct portfolio and, at the same time, we continue to invest ininnovative technologies and expand our R&D capabilities around theworld. In addition, we have increased spending in product innovationand consumer-facing brand-support. All this allows me to confirm myexpectation that volume-driven organic growth will further accelerateand that the EBIT margin in constant currencies will improve for thefull year."Follow today's events08:30 CET Investor Call webcast (Audio only - English language)10:00 CET Press Conference webcast (Video - English language)Full details in EventsIn the first nine months of 2009 the Group achieved organic growth of3.6%. Real internal growth reached 1.0% having accelerated throughoutthe year and across most segments of the business. Divestitures, netof acquisitions, had a negative impact of -0.6% on Group sales, asdid the currency effect of -5.2% due to the strength of the Swissfranc compared to most other currencies. These two factorscontributed to a reduction in Nestlé Group sales of -2.2%, to CHF79.5 billion.Organic growth for Nestlé's food and beverage business was 3.5%. Realinternal growth accelerated in the third quarter to reach 0.7% forthe nine months from 0.1% at the half year. This improvement wasevident in each region, resulting in organic growth of 4.4% in theAmericas, 0.9% in Europe and 6.5% in Asia, Oceania and Africa forNestlé's total food and beverage businesses.The nine-month sales and the first half EBIT margin improvementdemonstrate Nestlé's ability to deliver solid performance on top ofstrong growth in 2008, whilst continuing to invest in longer-termstrategic priorities. Emerging markets enjoyed 7.5% organic growth.Popularly Positioned Products, a business model now well establishedin emerging markets, delivered double-digit growth as the roll-out indeveloped countries gathered pace.Sales by operating segment+-------------------------------------------------------------------+| | | | | Real || | | | | Internal || | Jan-Sept | Jan-Sept | Jan-Sept | Growth || | 2009 | 2009 | 2009 | (bps) || | Sales | Organic | Real | Jan-Sept || | in CHF | Growth (%) | Internal | 2009 || | millions | | Growth (%) | Vs. || | | | | Jan-June || | | | | 2009 ||-------------------+----------+------------+------------+----------|| Food & Beverages | | | | || * Zone Americas | 23 393 | + 6.4% | + 2.3% | +40 ||-------------------+----------+------------+------------+----------|| * Zone Europe | 16 514 | 0.0% | - 1.5% | 0 ||-------------------+----------+------------+------------+----------|| * Zone Asia, | 11 713 | + 5.8% | + 3.0% | +80 || Oceania, Africa | | | | ||-------------------+----------+------------+------------+----------|| Nestlé Waters | 7 220 | - 1.8% | - 2.3% | +140 ||-------------------+----------+------------+------------+----------|| Nestlé Nutrition | 7 479 | + 2.0% | - 1.5% | +90 ||-------------------+----------+------------+------------+----------|| Other Food & | 7 390 | + 6.2% | + 2.8% | +40 || Beverages | | | | ||-------------------+----------+------------+------------+----------|| Total Food & | 73 709 | + 3.5% | + 0.7% | +60 || Beverages | | | | ||-------------------+----------+------------+------------+----------|| Pharma | 5 838 | + 5.9% | + 5.5% | +40 ||-------------------+----------+------------+------------+----------|| Group Total | 79 547 | + 3.6% | + 1.0% | +50 |+-------------------------------------------------------------------+All calculations based on non-rounded figures.Globally managed Nestlé Professional activities have been taken outof the Zones and included in "Other Food & Beverages".Zone Americas: sales of CHF 23.4 billion, 6.4% organic growth and2.3% real internal growth. In North America, the real internal growthof petcare, ice cream, soluble coffee and chocolate accelerated inthe third quarter, but slowed for frozen food. Brazil continued tobuild on the positive momentum, mainly due to growth in the ambientdairy category. Mexico and the rest of the region also showedimprovement in the third quarter.Zone Europe: sales of CHF 16.5 billion, 0% organic growth and -1.5%real internal growth. Germany, France, Switzerland, the Iberianregion and Italy saw a rise in real internal growth. The GreatBritain region delivered a strong performance, although the thirdquarter was weaker. Eastern Europe presented a mixed picture withweaker third-quarter real internal growth in Russia and the Czech andSlovak Republics, while Poland and the Ukraine enjoyed strongergrowth. By category, sales volumes were good in soluble coffee,chilled culinary, powdered beverages and petcare.Zone Asia, Oceania and Africa: sales of CHF 11.7 billion, 5.8%organic growth and 3.0% real internal growth. All the emergingregions contributed to improved volumes, although real internalgrowth in Oceania and Japan was unchanged. There was strong realinternal growth in China, the Philippines, South Asia and Africa. TheMiddle East continued to improve. By category, real internal growthin ambient dairy improved and remained strong in ambient culinary,soluble coffee, powdered beverages and chocolate.Nestlé Waters: sales of CHF 7.2 billion, -1.8% organic growth and-2.3% real internal growth. Real internal growth for the thirdquarter improved, mainly due to an acceleration in Europe where thebusiness benefited from renewed brand support. The category as awhole was weak in North America, but the Nestlé business gainedmarket share. The emerging markets business enjoyed strong growth.Nestlé Pure Life continued to achieve double-digit growth in theemerging markets and North America.Nestlé Nutrition: sales of CHF 7.5 billion, 2.0% organic growth and-1.5% real internal growth. Infant nutrition's real internal growthimproved in all three zones, benefiting from a strong innovation andrenovation pipeline and increased marketing support. NaturNescontinued to build market share in Europe. Healthcare Nutritionachieved good momentum in its core areas in the wake of recentrationalisation measures, and performed particularly well in ZoneAsia, Oceania and Africa. Jenny Craig was affected by weakdiscretionary spend in the US. Performance nutrition saw goodacceleration in all three zones.Other Food and Beverages: sales of CHF 7.4 billion, 6.2% organicgrowth and 2.8% real internal growth. Nespresso continued to deliverdouble-digit growth. Growth was positive in both the joint ventures,Cereal Partners Worldwide and Beverage Partners Worldwide. As anewly-created, globally-managed business, Nestlé Professionaldelivered slightly improved growth momentum, in spite of weakout-of-home consumption.Pharma: sales of CHF 5.8 billion, 5.9% organic growth, 5.5% realinternal growth. Alcon and the joint ventures as a whole achievedgood growth.Sales by product segment+-------------------------------------------------------------------+| | | | | Real || | | | Jan-Sept | Internal || | Jan-Sept | Jan-Sept | 2009 | Growth || | 2009 | 2009 | Real | (bps) || | Sales | Organic | Internal | Jan-Sept || | in CHF | Growth | Growth | 2009 || | millions | (%) | (%) | Vs. || | | | | Jan-June || | | | | 2009 ||-----------------------+----------+----------+----------+----------|| Powdered and liquid | 13 952 | + 9.8% | + 5.3% | + 60 || beverages | | | | ||-----------------------+----------+----------+----------+----------|| Water | 7 224 | - 1.9% | - 2.3% | +140 ||-----------------------+----------+----------+----------+----------|| Milk products and ice | 14 883 | + 0.7% | - 0.2% | +110 || cream | | | | ||-----------------------+----------+----------+----------+----------|| Nutrition | 7 481 | + 2.0% | - 1.5% | + 90 ||-----------------------+----------+----------+----------+----------|| Prepared dishes and | 12 379 | 0.0% | - 0.5% | - 50 || cooking aids | | | | ||-----------------------+----------+----------+----------+----------|| Confectionery | 8 177 | + 4.0 % | - 1.6% | - 30 ||-----------------------+----------+----------+----------+----------|| PetCare | 9 613 | + 8.8% | + 3.2% | + 50 ||-----------------------+----------+----------+----------+----------|| Total Food & | 73 709 | + 3.5% | + 0.7% | +60 || Beverages | | | | ||-----------------------+----------+----------+----------+----------|| Pharmaceutical | 5 838 | + 5.9% | + 5.5% | +40 || products | | | | ||-----------------------+----------+----------+----------+----------|| Group Total | 79 547 | + 3.6% | + 1.0 % | +50 |+-------------------------------------------------------------------+All calculations based on non-rounded figures.The slight difference in the figures for water and nutrition betweenthe "Sales by operating segment" and "Sales by product" tables is dueto the fact that some water and nutrition products are also sold bymanagement segments other than Nestlé Waters and Nestlé Nutrition.Powdered and liquid beverages: sales of CHF 14.0 billion, 9.8%organic growth and 5.3% real internal growth. All segmentscontributed to the acceleration in real internal growth, with strongresults for billionaire brands Nescafé, Nesquik, Nespresso andNestea, which accounted for 80% of this product group's sales.Nesquik in North America and Europe and Milo in Asia benefited fromtheir health and wellness profiles. Nescafé enjoyed strong growth inall three zones. Nescafé Dolce Gusto reached organic growth of over50%, taking strategic market positions in the 16 countries where ithas so far been rolled out. Nespresso delivered 28% organic growth.Milk products and ice cream: sales of CHF 14.9 billion, 0.7% organicgrowth and -0.2% real internal growth. Real internal growth forambient dairy continued to build momentum during the year, driven bya strong range of Popularly Positioned Products with brands such asNido. Coffee-mate, primarily in the US, continued to achieve almostdouble-digit growth. The ice cream business increased its leadershipposition in the US, its biggest market, with strong communicationaround nutrition-focused innovations, particularly in thesuper-premium segment. In Europe, the performance was stronger in theNorth with successful launches of Nestlé Extrême All Natural incountries such as Germany and Switzerland, but weaker in the South.Prepared dishes and cooking aids: sales of CHF 12.4 billion, 0%organic growth and -0.5% real internal growth. In Europe, the doughsegment and frozen pizza business delivered growth, with Herta alsoperforming well, whilst ambient culinary and frozen meals wereweaker, particularly due to lower out-of-home consumption. In the US,Hot Pockets and Stouffer's family packs performed well, but demandwas weaker for its single serve offerings and for Lean Cuisine. Gooddemand in Africa, Asia, Eastern Europe and Latin America continued todeliver double-digit growth for Maggi in emerging markets.Confectionery: sales of CHF 8.2 billion, 4.0% organic growth and-1.6% real internal growth. There was some softness in the growth ofbiscuits and sugar confectionery, but the chocolate businesscontinued to make good progress. Kit Kat continued to perform welloverall. Demand was weak in Russia, while many emerging marketsdelivered strong growth with products such as Nestlé Classic tabletsin Turkey, Munch in India and Sahne Nuss in Chile. Core brands gainedmomentum in the US.PetCare: sales of CHF 9.6 billion, 8.8% organic growth and 3.2% realinternal growth. Strong growth for the nine months in petcarereflected continued innovation and renovation of key brands such asFriskies, Beneful, Dog Chow, Bakers, ONE and Gourmet, whichoutperformed the category in all regions. New product launches, suchas Chef Michael's dry and wet dog food, also contributed to thestrong performance.Share buybackBased on Nestlé's solid operational performance, the Board ofDirectors has agreed to increase the 2009 share buyback programmefrom CHF 4 billion to CHF 7 billion. This change will allow thecompany to complete its current CHF 25 billion share buybackprogramme earlier than initially contemplated. The Board of Directorsexpressed satisfaction at Nestlé's current credit rating whichallowed easy access to financial markets at attractive pricing duringthe financial crisis, and reaffirmed its decision to maintain thecompany's current credit quality for the foreseeable future.2009 outlookThe nine-months performance is in line with earlier guidance, withgrowth momentum increasingly driven by real internal growth. TheGroup therefore continues to expect volume-driven organic growth tofurther accelerate as well as an EBIT margin improvement in constantcurrencies for the full year.Contacts Media RobinTickle Tel.: +41 (0)21 92422 00 Investors RoddyChild-Villiers Tel.: +41 (0)21 924 3622 --- End of Message ---Nestlé S.A.Avenue Nestlé 55 Vevey WKN: 887208; ISIN: CH0012056047; Index: SLCI, SMI, SPI, SMIEXP;Listed: Main Market in SIX Swiss Exchange;
Datum: 22.10.2009 - 07:29 Uhr
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