TIDM76TQ
RNS Number : 6143W
Nestle SA
18 April 2019
The following amendment has been made to the 'Nestlé reports
three-month sales' announcement released on 18 April 2019 at 07:00
UK under RNS No 6003W: updated title.
Nestlé Press Release
Follow today's event live
14:00 CEST Investor call audio webcast:
https://edge.media-server.com/m6/go/Nestle-2019-Three-month-sales
Full details:
https://www.nestle.com/media/mediaeventscalendar/allevents/2019-three-month-sales
.......................................
Vevey, April 18, 2019
Nestlé reports three-month sales for 2019
-- Organic growth of 3.4%, with continued strong real internal
growth (RIG) of 2.2%. Pricing increased to 1.2%, with significant
improvement in Brazil and the United States.
-- Total reported sales increased by 4.3% to CHF 22.2 billion
(3M-2018: CHF 21.3 billion). Net acquisitions had a positive impact
of 1.2% and foreign exchange reduced sales by 0.3%.
-- Portfolio management fully on track. The strategic reviews of
Nestlé Skin Health and Herta charcuterie (cold cuts and meat-based
products) are expected to be completed by mid- and late 2019,
respectively.
-- Full-year guidance for 2019 confirmed, with continued
improvement in organic sales growth and underlying trading
operating profit margin towards our 2020 targets. Underlying
earnings per share in constant currency and capital efficiency are
expected to increase.
Mark Schneider, Nestlé CEO:
"We are pleased with Nestlé's solid organic sales growth in the
first quarter, building on our full-year 2018 momentum. 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."
He added: "The notion of business as a force for good resonates
very strongly inside Nestlé. Starting with this report, we will
highlight each quarter how Nestlé creates shared value. We will
begin by showing how Nespresso delivers on its commitment to
quality and sustainability."
Nestlé Other
Total Group Zone AMS Zone EMENA Zone AOA Waters Businesses
----------- -------- ---------- -------- ----------- -----------
Sales 3M-2019 (CHF
m) 22'183 7'510 4'703 5'389 1'773 2'808
Sales 3M-2018 (CHF
m) 21'264 6'761 4'737 5'286 1'732 2'748
---------------------- ----------- -------- ---------- -------- ----------- -----------
RIG 2.2% 0.9% 3.1% 2.3% -2.3% 6.5%
Pricing 1.2% 2.5% -1.0% 1.0% 4.3% 0.3%
Organic growth 3.4% 3.4% 2.1% 3.3% 2.0% 6.8%
Net M&A 1.2% 6.0% 0.0% -0.2% -0.5% -4.3%
Foreign exchange -0.3% 1.7% -2.8% -1.2% 0.9% -0.4%
Reported sales growth 4.3% 11.1% -0.7% 1.9% 2.4% 2.1%
---------------------- ----------- -------- ---------- -------- ----------- -----------
Group sales
Organic growth reached 3.4% in the first quarter. RIG of 2.2%
was resilient. Pricing improved to 1.2%, mainly reflecting
increases in Brazil and the United States. Organic growth was 3.2%
excluding businesses under strategic review. The growth
acceleration was largely supported by Brazil, our fourth largest
market. The United States and China, Nestlé's two leading markets,
maintained good momentum. All product categories saw positive
growth. The largest growth contributions came from Purina petcare,
dairy and infant nutrition. Organic growth for the Group was 1.2%
in developed markets and 6.3% in emerging markets.
Net acquisitions increased sales by 1.2%. The acquisition of the
Starbucks license, Atrium Innovations and other transactions more
than offset divestments, mainly Gerber Life Insurance and U.S.
confectionery. Foreign exchange had a negative impact of 0.3%.
Total reported sales increased by 4.3% to CHF 22.2 billion.
Zone Americas (AMS)
-- 3.4% organic growth: 0.9% RIG; 2.5% pricing.
-- North America saw positive organic growth, with positive RIG and pricing.
-- Latin America reported mid single-digit organic growth, with positive RIG and pricing.
Sales Sales Organic Net Foreign Reported
3M-2019 3M-2018 RIG Pricing growth M&A exchange growth
--------- --------- ---- ------- ------- ---- --------- --------
CHF 7.5 CHF 6.8
Zone AMS bn bn 0.9% 2.5% 3.4% 6.0% 1.7% 11.1%
--------- --------- --------- ---- ------- ------- ---- --------- --------
Organic growth accelerated to 3.4%, with resilient RIG of 0.9%
and a significant pricing contribution of 2.5%. Net acquisitions
increased sales by 6.0%, largely related to the acquisition of the
Starbucks license. Foreign exchange increased sales by 1.7%.
Reported sales in Zone AMS increased by 11.1% to CHF 7.5
billion.
North America maintained good sales development in the first
quarter. Pricing increased to reflect cost inflation. The largest
contributor to growth was Purina petcare, which saw strong momentum
in e-commerce and in premium brands, such as Purina ONE and Tidy
Cats litter. North America recorded mid single-digit growth in
Nestlé Professional and in the beverages category, comprising
Coffee-mate creamers, Starbucks and Nescafé. Frozen food returned
to positive growth led by the Hot Pockets and Stouffer's
brands.
Latin America reported mid single-digit growth, with positive
contributions in most markets and categories. Brazil posted
double-digit growth, supported by both positive pricing and RIG.
Mexico saw mid single-digit growth, as strong demand for Nescafé
Origins helped to maintain good momentum in coffee. Latin America
recorded high single-digit growth for the dairy, confectionery, and
Purina petcare categories.
Zone Europe, Middle-East and North Africa (EMENA)
-- 2.1% organic growth: 3.1% RIG; -1.0% pricing.
-- Western Europe posted strong RIG. Organic growth was impacted by negative pricing.
-- Central and Eastern Europe reported mid single-digit organic
growth, with strong RIG and positive pricing.
-- Middle East and North Africa saw mid single-digit organic
growth, with strong RIG and positive pricing.
Sales Sales Organic Net Foreign Reported
3M-2019 3M-2018 RIG Pricing growth M&A exchange growth
--------- --------- ---- ------- ------- ---- --------- --------
CHF 4.7 CHF 4.7
Zone EMENA bn bn 3.1% -1.0% 2.1% 0.0% -2.8% -0.7%
----------- --------- --------- ---- ------- ------- ---- --------- --------
Organic growth was 2.1%, with strong RIG of 3.1%. Pricing
declined by 1.0%, as deflationary trends in Western Europe
persisted. Net acquisitions had no impact on sales. Foreign
exchange negatively impacted sales by 2.8%. Reported sales in Zone
EMENA declined by 0.7% to CHF 4.7 billion.
Zone EMENA reported strong RIG despite a low-growth environment
in Western Europe. The Purina petcare and infant nutrition
categories were the main contributors to growth across the Zone,
especially in Central and Eastern Europe, and the Middle East and
North Africa. Coffee saw flat RIG with negative pricing resulting
from lower green coffee prices. Confectionery posted a good
quarter, with double-digit growth for KitKat and strong demand for
the recently launched Yes! snack bar. Frozen pizza brands Wagner
and Buitoni moved to positive growth, while vegetarian products
posted high single-digit growth.
Zone Asia, Oceania and sub-Saharan Africa (AOA)
-- 3.3% organic growth: 2.3% RIG; 1.0% pricing.
-- China maintained mid single-digit organic growth, with positive RIG and pricing.
-- South-East Asia saw mid single-digit organic growth,
supported by strong RIG and positive pricing.
-- South Asia had low single-digit organic growth, with a
balanced contribution of RIG and pricing.
-- Sub-Saharan Africa reported mid single-digit organic growth, with positive RIG and pricing.
-- Japan and Oceania posted negative organic growth as both RIG and pricing declined.
Sales Sales Organic Net Foreign Reported
3M-2019 3M-2018 RIG Pricing growth M&A exchange growth
--------- --------- ---- ------- ------- ----- --------- --------
CHF 5.4 CHF 5.3
Zone AOA bn bn 2.3% 1.0% 3.3% -0.2% -1.2% 1.9%
--------- --------- --------- ---- ------- ------- ----- --------- --------
Organic growth was 3.3%, with RIG of 2.3% and pricing of 1.0%.
Net acquisitions and foreign exchange reduced sales by 0.2% and
1.2% respectively. Reported sales in Zone AOA increased by 1.9% to
CHF 5.4 billion.
Zone AOA saw solid growth in the first quarter, with a slight
slow-down due to Japan and Oceania. China maintained mid
single-digit growth, with strong contributions from the illuma
organic infant nutrition range, Nescafé ready-to-drink coffee, and
culinary, in particular Totole. South-East Asia saw strong growth
overall, with double-digit growth in Indonesia and Vietnam,
particularly with Bear Brand, NAN and Nescafé. South Asia posted
low single-digit growth. There was strong growth in NAN infant
nutrition, Maggi in culinary products and KitKat in confectionery,
partly offset by negative sales development in dairy. Sub-Saharan
Africa posted mid single-digit growth. Japan had negative RIG due
to unfavorable comparables, as well as softness in the coffee
category. Oceania saw positive RIG and negative pricing in a
deflationary environment. Purina petcare had strong growth in the
Zone.
Nestlé Waters
-- 2.0% organic growth: -2.3% RIG; 4.3% pricing.
-- North America reported positive organic growth as strong
pricing was partially offset by negative RIG.
-- Europe saw slightly negative organic growth. Positive pricing
was fully offset by negative RIG.
-- Emerging markets posted high single-digit organic growth,
with strong pricing and positive RIG.
Sales Sales Organic Net Foreign Reported
3M-2019 3M-2018 RIG Pricing growth M&A exchange growth
--------- --------- ----- ------- ------- ----- --------- --------
Nestlé CHF 1.8 CHF 1.7
Waters bn bn -2.3% 4.3% 2.0% -0.5% 0.9% 2.4%
------------ --------- --------- ----- ------- ------- ----- --------- --------
Organic growth was 2.0%. Pricing increased by 4.3%, RIG declined
by 2.3%. Net acquisitions reduced sales by 0.5%. Foreign exchange
increased sales by 0.9%. Reported sales in Nestlé Waters increased
by 2.4% to CHF 1.8 billion.
In North America growth was supported by 2018 price increases to
reflect significant cost inflation in packaging and distribution.
Our premium brands S.Pellegrino, Perrier, and Acqua Panna posted
strong growth, with particularly strong demand for the newly
launched S.Pellegrino Essenza. Poland Spring and Zephyrhills made
good contributions to growth. The ReadyRefresh direct-to-consumer
business grew at a mid single-digit rate. Our mainstream brand
Nestlé Pure Life posted negative growth.
Emerging markets accelerated to high single-digit growth. Europe
saw slightly negative sales development, impacted by the United
Kingdom and Germany.
Overall, the international premium brands posted high
single-digit growth, supported by a strong pipeline of
innovations.
Other Businesses
-- 6.8% organic growth: 6.5% RIG; 0.3% pricing.
-- Nespresso reported mid single-digit organic growth, with very
strong momentum in the Americas.
-- Nestlé Health Science saw mid single-digit organic growth, all from RIG.
-- Nestlé Skin Health posted double-digit organic growth, with
strong RIG and slightly negative pricing.
Sales Sales Organic Net Foreign Reported
3M-2019 3M-2018 RIG Pricing growth M&A exchange growth
--------- --------- ---- ------- ------- ----- --------- --------
CHF 2.8 CHF 2.7
Other Businesses bn bn 6.5% 0.3% 6.8% -4.3% -0.4% 2.1%
----------------- --------- --------- ---- ------- ------- ----- --------- --------
Organic growth of 6.8% was driven by strong RIG of 6.5% and
pricing of 0.3%. Net acquisitions reduced sales by 4.3%, mainly due
to the disposal of Gerber Life Insurance, which more than offset
the consolidation of Atrium Innovations in Nestlé Health Science.
Foreign exchange negatively impacted sales by 0.4%. Reported sales
in Other Businesses increased by 2.1% to CHF 2.8 billion.
Nespresso maintained mid single-digit organic growth. North
America and emerging markets saw double-digit growth, while sales
in Europe were flat. Growth continued to be supported by the Vertuo
system. Nestlé Health Science grew at a mid single-digit rate, with
double-digit growth in medical nutrition and geographic expansion
in emerging markets. Innovation provided additional growth
momentum, with strong demand for Compleat Organic Blends, the only
organic, real food tube-feeding formula. Nestlé Skin Health posted
double-digit growth.
Our business as a force for good
Creating Shared Value is fundamental to how we do business at
Nestlé. We believe that our company will be successful in the long
term by creating value for both our shareholders and for
society.
This is well illustrated by Nespresso. Creating shared value is
at the heart of Nespresso's consumer proposition. Nespresso's
success is based on delivering an extraordinary coffee experience,
which is the result of its commitment to quality and sustainability
all the way from the coffee farm to the recycling of capsules.
Overall sustainability of portioned coffee. Nespresso is one of
the most sustainable ways of enjoying high quality R&G coffee.
The precision-consumption system uses only the exact amount of
water, energy and coffee needed to brew one cup, reducing wasted
resources.
Coffee and farming communities. The Nespresso AAA sustainable
quality program was established in 2003 and involves significant
investment. 460 Nespresso agronomists work closely with 100,000
coffee farmers to increase quality and yields and drive
environmentally and socially responsible farming practices. Greater
productivity of high-quality coffees benefits farmer incomes and
contributes to sustainable livelihoods. Master Origin, a range of
the world's finest coffee crafts from six different countries
(Mexico, Colombia, Indonesia, Ethiopia, India, Nicaragua) is a
great example of this collaboration with purpose.
Aluminum and recycling. Aluminum was chosen as the capsule
material because it perfectly preserves the aromas and flavors of
the highest quality Nespresso coffees. It guarantees in-cup quality
for consumers and is 100% recyclable. Since 1991, Nespresso has
been investing in recycling infrastructure to cover 53 countries
and provide 92% of Nespresso consumers with recycling options. Both
the aluminum and the coffee grounds are recovered and re-used.
Nespresso's unique and holistic approach creates the
highest-quality coffee experience for consumers and benefits our
environment as well as coffee farming communities around the
world.
Outlook
Full-year guidance for 2019 confirmed, with continued
improvement in organic sales growth and underlying trading
operating profit margin towards our 2020 targets. Underlying
earnings per share in constant currency and capital efficiency are
expected to increase.
Contacts
Media Christoph Meier Tel.: +41 21 924 2200
Investors Luca Borlini Tel.: +41 21 924 3820
Annex
Three-month sales overview by operating segment
Nestlé Other
Total Group Zone AMS Zone EMENA Zone AOA Waters Businesses
----------- -------- ---------- -------- ----------- -----------
Sales 3M-2019 (CHF
m) 22'183 7'510 4'703 5'389 1'773 2'808
Sales 3M-2018 (CHF
m) 21'264 6'761 4'737 5'286 1'732 2'748
---------------------- ----------- -------- ---------- -------- ----------- -----------
RIG 2.2% 0.9% 3.1% 2.3% -2.3% 6.5%
Pricing 1.2% 2.5% -1.0% 1.0% 4.3% 0.3%
Organic growth 3.4% 3.4% 2.1% 3.3% 2.0% 6.8%
Net M&A 1.2% 6.0% 0.0% -0.2% -0.5% -4.3%
Foreign exchange -0.3% 1.7% -2.8% -1.2% 0.9% -0.4%
Reported sales growth 4.3% 11.1% -0.7% 1.9% 2.4% 2.1%
---------------------- ----------- -------- ---------- -------- ----------- -----------
Three-month sales overview by product
Milk Prepared
Powdered products Nutrition dishes
Total & liquid & ice & Health & cooking
Group beverages Water cream Science aids Confectionery Petcare
------ ---------- ----- --------- --------- ---------- ------------- -------
Sales 3M-2019
(CHF m) 22'183 5'538 1'679 3'124 3'833 2'928 1'858 3'223
Sales 3M-2018
(CHF m) 21'264 5'013 1'631 2'991 3'766 2'841 2'003 3'019
--------------- ------ ---------- ----- --------- --------- ---------- ------------- -------
RIG 2.2% 0.8% -2.1% 2.1% 5.7% 2.6% 1.1% 2.9%
Pricing 1.2% 0.5% 4.5% 2.1% 0.5% -0.3% 0.9% 2.6%
Organic growth 3.4% 1.3% 2.4% 4.2% 6.2% 2.3% 2.0% 5.5%
--------------- ------ ---------- ----- --------- --------- ---------- ------------- -------
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END
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