SWITZERLAND – Nestle has posted 4.3% rise in revenues in the first three months as the food and drinks giant continues its focus on high-growth categories.
The company achieved 3.4% increase in organic growth while total reported sales reached US$21.9 billion (CHF 22.2 billion) for the quarter, positively impacted by net acquisitions and foreign exchange.
Nestle said its effort towards portfolio management was fully on track with strategic reviews of Nestlé Skin Health and Herta charcuterie (cold cuts and meat-based products).
The growth acceleration was largely supported by Brazil, our fourth largest market even as US and China, Nestlé’s two leading markets continued to register good momentum.
Organic growth for the group was 1.2% in developed markets and 6.3% in emerging markets, with largest growth contributions coming from Purina petcare, dairy and infant nutrition.
“We are pleased with Nestlé’s solid organic sales growth in the first quarter, building on our full-year 2018 momentum,” said Mark Schneider, Nestlé CEO.
“Our increased speed, innovation for a changing world and execution focus are clearly paying off. We confirm our outlook for the year.”
“In the quarter, we announced the launch of a new range of 24 premium coffee products under the Starbucks brand.
“The Nestlé and Starbucks teams did an outstanding job and developed these products in just 6 months.”
During the period, Nestle acquired Starbucks licence to distribute new range of coffee products following last year’s US$7.15 billion tie-up deal.
Nestle says the Starbucks deal, together with acquisition of Atrium Innovations were more than offset divestments, mainly Gerber Life Insurance and U.S. confectionery.
The results were supported by ‘good’ sales growth in North America where Purina petcare saw strong momentum in e-commerce and in premium brands, such as Purina ONE and Tidy Cats litter.
Other brands recording outstanding growth included Coffee-mate creamers, Starbucks and Nescafé and Frozen foods such as Hot Pockets and Stouffer’s brands.
Zone EMENA (Europe, Middle-East and North Africa) reported 2.1% in organic growth impacted by pricing and foreign exchange rates.
Reported sales in EMENA declined by 0.7% to US$4.61 billion (CHF 4.7 billion) with Purina petcare and infant nutrition being the main contributors to growth.
While South-East Asia saw strong growth overall, with double-digit growth in Indonesia and Vietnam, Sub-Saharan Africa reported mid-single-digit organic growth with strong contributions from NAN infant nutrition, Maggi, Nescafe, Kitkat, Purina and Bear Brand.
Nestle Waters experienced strong growth during the quarter, with organic sales rising 2%.
Growth in North America was supported by price increases to reflect rising packaging and distribution costs, and premium brands S.Pellegrino, Perrier, and Acqua Panna.