Nestlé's organic sales grow as volume and mix improve
Nestlé reported 4 per cent organic growth in third-quarter sales, with its volume and mix measure rising 2.8 per cent. Growth was positive across regions, and emerging markets advanced faster than developed markets. The food group maintained its annual outlook while excluding its Russian business from consolidated accounts after losing management control at the end of September.
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Quarterly sales rise as volume and mix strengthen
Nestlé, the Swiss food group, reported stronger third-quarter sales alongside an improvement in sales volumes, particularly in emerging markets. Its organic growth reached 4 per cent. The company released its quarterly and nine-month sales figures on October 22.[1], [2]
Reported quarterly sales were 22.756 billion Swiss francs, compared with 21.641 billion a year earlier. Real internal growth, the group's measure of volume and product mix, was 2.8 per cent. Pricing contributed 1.1 per cent, while currency movements had a positive sales effect of 1.5 per cent.[1]
Emerging markets and petcare lead several growth measures
Real internal growth was positive across every region and globally managed business in the quarter. Emerging markets delivered 6.8 per cent organic growth, with 4.3 per cent real internal growth and 2.5 per cent pricing. Developed markets recorded corresponding increases of 2.2 per cent, 1.9 per cent and 0.3 per cent.[1]
Petcare grew 5.3 per cent organically, including 4.3 per cent real internal growth. Coffee advanced 3.4 per cent and Food & Snacks 5 per cent. Nutrition growth was 0.3 per cent as medical nutrition strength was offset by weaker products elsewhere. The infant formula recall reduced quarterly group organic growth by 20 basis points.[1]
Annual guidance holds while Russian accounts leave consolidation
Nine-month organic growth was 3.7 per cent, including 1.9 per cent real internal growth and 1.8 per cent pricing. Retail channels grew 3.9 per cent organically and out-of-home channels 4.8 per cent in the quarter. E-commerce grew 15.3 per cent organically and accounted for 21.6 per cent of nine-month group sales.[1]
The full-year organic growth forecast at Nestlé remained of 3–4 per cent, expects its underlying trading operating profit margin to improve from last year and projects free cash flow above 9 billion francs. Its business under temporary external administration left consolidated accounts at September's end after temporary external administration removed management control. Nestlé remains legal owner of the assets; it reported no effect on quarterly or nine-month sales and a limited effect on annual underlying results.[1]
