Nestlé reports 9-month organic growth of 2.6%

24 Oct 2017

Nestlé has reported 9-month organic growth of 2.6%, with 1.8% of real internal growth and pricing of 0.8%. Total reported sales decreased by 0.4% to CHF65.3 billion (9M-2016: CHF65.5 billion).

Nestlé has reported 9-month organic growth of 2.6%, with 1.8% of real internal growth and pricing of 0.8%. Total reported sales decreased by 0.4% to CHF65.3 billion (9M-2016: CHF 65.5 billion), reduced by net divestments of 2.6% (mainly due to the creation of the Froneri joint venture) and negative foreign exchange effects of 0.4%. Organic growth was 0.8% in developed markets and 5.1% in emerging markets. The company confirmed its sales guidance for 2017, and now expects organic growth for the full year to be around the level of the nine-month period.

The underlying trading operating profit margin for 2017 is set to improve by at least 20 basis points in constant currency, in line with Nestlé’s expectations. The company says its structural savings initiatives are progressing faster than originally planned, leading to an additional increase of CHF400-500 million in restructuring and related expenses in 2017. As a result, trading operating profit margin will decrease by 40-60 basis points in constant currency. Nestlé expects underlying earnings per share in constant currency and capital efficiency to increase.

“Our sales results for the nine-month period are in line with our expectations communicated in July,” said Mark Schneider, Nestlé CEO. “Organic sales growth continued to benefit from industry-leading volume growth, which illustrates our ability to innovate and meet consumer demand. Pricing remained soft. Zone AOA saw further improvement in organic growth. As expected, Western Europe returned to positive organic growth, with significant contributions from coffee and confectionery.”

“Improving our efficiency is a key priority. We have identified further opportunities to accelerate our margin improvement, leading to a further increase in restructuring and related expenses in 2017. Consequently, we now expect our trading operating profit margin to decrease by 40-60 basis points. The development of our underlying trading operating profit margin is fully in line with our expectations for 2017.”