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Nestlé first-quarter sales: continuation of strong momentum

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Vevey, Switzerland
  • Sales of CHF 20.3 billion, 6.4% organic growth, 4.9% real internal growth
  • Growth in developed markets, double-digit growth in emerging markets
  • Market share gains in all three Zones
  • Full-year outlook unchanged: organic growth of 5-6% combined with margin increase in constant currencies

Paul Bulcke, Nestlé CEO: “We achieved growth in all categories in the first three months of 2011, maintaining last year’s momentum. We continue to invest for the future, particularly in R&D and consumer-facing marketing, while addressing the challenge of higher input costs by accelerating the pace of innovation as well as ensuring the appropriate balance between savings from Nestlé Continuous Excellence and pricing. In view of the strong start to the year, we are able to reconfirm our guidance for 2011 as a whole.”

Vevey, 15 April 2011 – In the first three months of 2011, sales amounted to CHF 20.3 billion, consisting of 6.4% organic growth, including 4.9% real internal growth. Sales were impacted by -9.8% from foreign exchange and by -5.9% from divestitures (mainly Alcon) net of acquisitions (mainly Kraft Pizza). For the continuing business, sales in Swiss francs were down 1.2%.

The first quarter organic sales development of +6.4% reflects strong, broad-based growth, building on the momentum in 2010. The organic growth was 4.3% in the Americas, 3.9% in Europe and 13.8% in Asia, Oceania and Africa. Developed markets grew 3%, while emerging markets achieved around 12% organic growth.

Business Review

Zone Americas

Sales of CHF 6.4 billion, 3.7% organic growth, 1.2% real internal growth

  • The North American market remained subdued but our market share performance was good in most categories. The trends in frozen food have improved, halting the decline seen in 2010. New launches, Market Creations by Lean Cuisine and Farmers’ Harvest by Stouffer’s, have been well received. In petcare, Purina entered the ultra-premium category with Purina One Beyond. Nescafé and Coffee-mate grew in the first quarter, but chocolate’s growth was impacted by tough comparisons with the same period last year which saw the launch of Wonka. Volumes in ice cream were impacted by price increases, but our market shares were up.
  • Latin America continued to grow well, with all regions contributing. Brazil enjoyed double-digit growth in a number of categories, but the late Easter season held back growth in its large chocolate business. Mexico continued to perform well, whilst the Austral-American and Bolivarian regions achieved double-digit growth, as did the regional petcare business.
  • There were good performances in most categories in the Americas. Soluble coffee, ambient culinary, powdered beverages and chilled culinary all grew double-digit, and there was high single-digit growth in both ambient and chilled dairy, as well as in biscuits.

Zone Europe

Sales of CHF 3.7 billion, 2.3% organic growth, 1.9% real internal growth

  • Western Europe achieved positive real internal growth and organic growth as well as market share gains in most categories, building on good momentum in 2010 and a strong innovation pipeline. France and Italy were particularly strong, whilst Switzerland and the Iberian region also performed well. Growth in the Great Britain region was impacted by Easter being later in 2011 than in 2010 and by consumers’ reduced levels of disposable income.
  • The Central and Eastern European region was accretive to the Zone’s growth. Improving momentum in the region seen already in the second half of 2010 continued into 2011. The Ukrainian and the Adriatic regions were particular highlights. The Russian market for confectionery, an impulse category, continued to be subdued though growth was double-digit in most of the other categories there.
  • The Zone’s performance was broad-based by category. Soluble coffee, petcare, chilled culinary and frozen pizza were highlights. The chocolate business was the only major category not to report positive real internal growth as Easter is later this year.