Nestlé has reported third quarter sales up 11% to CHF 67.6 billion, reflecting 6.1% organic growth, pricing-created growth of 3.2% and 2.9% real internal growth.
11.7% organic growth was achieved in emerging markets, with a 2.4% increase in developed markets.
The company confirmed its full-year outlook: organic growth of 5% to 6%, improved margin and underlying earnings per share in constant currencies.
“Nestlé’s growth in the first nine months is in line with our expectations,” said Paul Bulcke, Nestlé CEO. “It is the result of the capabilities built over time in innovation, distribution and engaging with consumers. We delivered double-digit growth in emerging markets, where we are expanding our routes to market and enhancing our product offerings.”
“We grew in the intensely competitive developed markets in spite of a general economic malaise and low levels of consumer confidence. Our continued momentum in real internal growth, combined with some easing of input cost pressures, allows us to confirm our full-year outlook.”
North America
In North America, said the company, the trading environment remained subdued, reflecting tough economic conditions and low consumer confidence. The frozen meals and pizza categories continued to decline but Nestlé’s share performance by Stouffer’s and Lean Cuisine improved. The recent launches in pizza, Italian-style favourites and pizza dipping strips continued to perform well, said the company.
Ice cream improved, whilst there were strong performances in both soluble coffee and coffee creamers: Nescafé Clásico and Coffee-Mate Natural Bliss were highlights.
Petcare maintained the positive momentum seen by Nestlé so far this year, with good performances in the cat category from Friskies and Fancy Feast, and from Beneful for dogs. Tidy Cats also did well.
There was double-digit growth in Latin America, with good contributions from most markets and regions. Brazil and Mexico both continued to drive strong growth. The chocolate, soluble coffee and ice cream categories grew well. Petcare reported growth of more than 20%.
Europe
In Europe, Nestlé said that beverages and in petcare continued to create growth in a deteriorating economic environment.
The Great Britain region, France and Switzerland were highlights among Western Europe’s main markets. Greece and Benelux also continued to grow.
In Central and Eastern Europe, Russia, Ukraine, the Adriatic region and Romania all made a positive contribution.
There was good growth in a number of categories. In coffee, both Nescafé soluble coffee and the Nescafé Dolce Gusto system performed well. Ice cream picked up well in the third quarter, after a slow start to the season. Pizza brands Wagner and Buitoni were the highlights in the frozen business.
Asia, Oceania and Africa
In Asia, Oceania and Africa, Nestlé focused on driving deeper distribution. Total sales for the zone, including new partnerships, were up 25.9% from CHF 11.1 billion in the corresponding period of 2011.
The emerging markets delivered double-digit growth. Africa grew at twice the zone average and the Middle East also performed extremely strongly. China and Indonesia were among the other markets contributing well. The categories that were the key growth drivers were dairy, powdered beverages and ready-to-drink, particularly Nescafé, ambient culinary with Maggi and Totole, chocolate including Shark in China, and ice cream.
Among developed markets, Japan reported growth due to its coffee systems Nescafé Barista and Nescafé Dolce Gusto, and chocolate, primarily Kit Kat.
Waters
Waters saw 5.8% organic growth, 4.0% real internal growth, with growth in all regions led by North America and emerging markets. In North America Nestlé said that it continued to see dynamic growth in the premium waters Perrier and S.Pellegrino, as well as in the value brand Nestlé Pure Life. Among the regional brands, Poland Spring and Ice Mountain were highlights.
Growth in Europe was good in the third quarter, particularly in France, the UK, Poland and Hungary. Vittel, Buxton, Perrier and S.Pellegrino were key contributors.
The emerging markets grew double-digit, with high levels of growth across many markets. Nestlé Pure Life, as well as local brands such as La Vie, Erikli and Al Manhal performed well.
Nutrition
Nestlé Nutrition saw 6.6% organic growth, 2.4% real internal growth.
Infant Nutrition achieved high growth in emerging markets, driven by infant formula and cereals, both of which continued to benefit from successful innovations and multi-market roll-outs for brands such as Nestlé NAN, Lactogen, Nestum and Cerelac. Trading conditions were subdued in a number of developed markets due to category contraction.
However, innovations such as pouches for Gerber in the US and NaturNes plates in France created growth in their categories.
Performance Nutrition achieved positive growth, driven by the US and Europe. Weight Management continued to be challenged in its key market, the US.
Outlook
Nestlé concluded its report by saying that, as it expected, the tough trading environment, especially in developed markets, is continuing, but the company’s performance year-to-date is in line with its expectations.
The company said that the capabilities built over time in innovation, distribution and engaging with con.
sumers are driving its growth. This, combined with some easing of input cost pressures, allows it to confirm its guidance for the full year - organic growth of 5% to 6%, improved margin and underlying earnings per share in constant currencies.
