Nestle stays on track

Nestle has revealed growth of just under 4% for the third quarter, the same percentage as for its confectionery business. The strongest division was drinks with an almost 10% organic growth.

Paul Bulcke, CEO of Nestle, says, “We have been streamlining our structures and product portfolio and, at the same time, we continue to invest in innovative technologies and expand our R&D capabilities around the world. This allows me to confirm my expectation that volume-driven organic growth will further accelerate.”

Organic growth for Nestle’s food and beverage business was 3.5%. Real internal growth accelerated in the third quarter to reach 0.7% for the nine months from 0.1% at the half year. This improvement was evident in each region, resulting in organic growth of 4.4% in the Americas, 0.9% in Europe and 6.5% in Asia, Oceania and Africa for Nestle’s total food and beverage businesses. In North America, the real internal growth of ice cream and chocolate accelerated in the third quarter. Eastern Europe presented a mixed picture with weaker third-quarter real internal growth in Russia while Poland and the Ukraine enjoyed stronger growth.

The confectionery division saw sales of 8.2 billion Swiss Francs (€ ), 4.0% organic growth and -1.6% real internal growth. There was some softness in the growth of biscuits and sugar confectionery, but the chocolate business continued to make good progress. Kit Kat continued to perform well overall. Demand was weak in Russia, while many emerging markets delivered strong growth with products such as Nestle Classic tablets in Turkey, Munch in India and Sahne Nuss in Chile. Core brands gained momentum in the US.
The nine-months performance is in line with earlier guidance, with growth momentum increasingly driven by real internal growth.

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