Corporate earnings

Nestle says 1Q sales up 5.6%

By Nestle

• Nestlé first-quarter sales: 7.2% organic growth, full-year outlook confirmed
• Sales of CHF 21.4 billion, 7.2% organic growth, 2.8% real internal growth
• 3.1% organic growth in developed markets, 13.0% organic growth in emerging markets
• Full-year outlook unchanged: organic growth of 5-6%, improved margin and underlying earnings per share in constant currencies

Paul Bulcke, Nestlé CEO: “As anticipated, 2012 is already confirming itself to be a challenging year. In many developed markets where consumer confidence is low, the trading environment is subdued whilst in most emerging markets, conditions remain dynamic and rich in growth opportunities. Our past and present investments, and continuing innovation, have enabled us to deliver good growth in the first quarter. This, together with the pricing effect for the rest of the year and a likely improved raw material environment in the second half, allows us to confirm our full-year outlook of delivering 5-6% organic growth together with an improvement in the year-end margin and underlying earnings per share in constant currencies.”

Vevey, Switzerland— In the first three months of 2012, sales increased by 5.6% to CHF 21.4 billion. Organic growth was 7.2%, composed of 2.8% real internal growth and pricing of 4.4%. Acquisitions net of divestitures, added 3% to sales, whilst foreign exchange had a negative impact of 4.6%.
Business Review

Our three geographies contributed positively to the first quarter’s growth: the Americas achieved organic growth of 6.8%, Europe delivered 3.4% and Asia, Oceania and Africa 12.2%. Our business grew 13.0% in emerging markets and 3.1% in developed markets. This performance reflects the contrasting market conditions in the developed and emerging worlds: the trading environment in many developed markets with low consumer confidence is sluggish whilst conditions in most emerging markets remain dynamic and rich in growth opportunities.
Zone Americas

Sales of CHF 6.5 billion, 6.2% organic growth, -0.4% real internal growth

• The North American market continued to be impacted by weak consumer sentiment with declining growth in a number of categories where pricing was higher, including frozen food. From a growth perspective soluble coffee was our strongest category, and we gained share also in pizza and chocolate. Nescafé performed well, and Coffee-Mate Natural Bliss, launched in April 2011, continued to build good momentum in the liquid coffee whitener segment. Petcare also grew and gained market share with strong performances in Friskies, Purina ONE Beyond and Beneful Baked Delights.