Manufacturing & Supply Chain

Nestle’s first quarter growth beats expectations

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Nestle’s first quarter growth beats expectations

April 14
10:06 2016
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downloadThe world’s biggest food company, Nestle has confirmed its full-year outlook after first-quarter underlying sales growth of 3.9% beating analysts’ estimates, driven mostly by growth in volumes rather than pricing.

Nestle’s first-quarter growth rate is still the slowest since 2009. Nestle has struggled to get consumers interested in frozen goods and convenience meals.

But it said today it managed to gain market share in most of its categories and businesses.

“As anticipated, the first quarter continued the positive momentum in real internal growth, with softer pricing,” the maker of Nescafe instant coffee and Pure Life bottled water said in a statement.

The company is also trying to push into newer areas like medical nutrition and skincare, which promise faster growth.

It confirmed its full-year outlook for organic growth, which strips out currency swings, acquisitions and divestitures, to be in line with 2015.

Sales at the group based in Vevey on Lake Geneva rose to 20.9 billion Swiss francs ($21.6 billion), in line with forecasts in a Reuters poll.

Organic growth slowed to 3.9%, down from 4.2% last year, but the figure beat a 3.7% forecast in the poll.

Nestle reported 3% volume growth in the quarter, slightly better than rival Unilever which had underlying volume growth of 2.6%.

The company said its volume growth accelerated compared to last year, thanks to strong performances in Europe, Southeast Asia and Africa.

It managed to boost prices as well but that growth was slower than a year earlier.

Sales in the group’s Asia, Oceania and Africa (AOA) zone accelerated to 2.1%, from 0.5% in 2015, recovering from a Maggi noodle recall in India last year.

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