Nestlé reports sales up 3.4% in 1Q
The Company reached revenue of SFr22.2bn ($21.9bn)
Nestlé confirmed it expected organic sales growth to exceed 3 percent this year after good momentum in the United States, Brazil and China helped it post better-than-expected sales growth in the first three months.
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. 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”.
The Company reported revenue of SFr22.2bn ($21.9bn) in the first quarter, while organic sales growth stood at 3.4 percent. Both measures were ahead of analysts’ expectations for sales of SFr22.1bn and organic growth of 2.8 per cent.
Full-year guidance for 2019 is 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.
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.
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