Peter
Brabeck-Letmathe, Chairman and CEO, said: "Nestlé is off to a strong
start, not least with an excellent performance of our food and beverage
business. These encouraging figures reflect the acceleration of our move towards
nutrition, health and wellness across our main food and beverages brands, as
well as the strong performance of our globally-managed Nestlé Nutrition unit which
achieved its long-term target of 10% organic growth. Input costs remain high, but
our strong brands enable us to continue to adjust prices. We therefore expect
the Group to reach its objectives of organic growth between 5 and 6%, as well
as continued improvement of the EBIT margin in constant currencies in 2007. The
acquisition of Gerber has further accelerated the transformation process and
will give Nestlé undisputed global leadership in nutrition, health and
wellness."
Vevey, 23 April 2007 - In the first quarter of
2007, the Nestlé group reached consolidated Swiss franc sales of 24.3 billion,
up 6.4% over the same period last year. Reported sales benefited from a strong organic
growth of 7.4%, of which 5.7% were from real internal growth and 1.7% from
price increases. Food and beverages delivered 7.1% organic growth, consisting
of 5.3% real internal growth and 1.8% price increases. The net currency effect reduced
reported group sales by 1.5%, whereas acquisitions, net of divestments, had a
slight positive impact of 0.5%.
|
Sales by Management Responsibilities
|
||||
|
|
Jan.-March 2007 |
Jan.-March. 2006 |
Real
internal growth
Jan.-March
2007
|
Organic growth
Jan.-March 2007
|
|
|
in CHF million
|
%
|
%
|
|
|
Zone Europe
|
6 497
|
6 217
|
+1.6
|
+1.9
|
|
Zone Americas
|
7 393
|
7 235
|
+4.4
|
+7.2
|
|
Zone Asia, Oceania and Africa
|
3 846
|
3 642
|
+8.1
|
+10.3
|
|
Nestlé Waters
|
2 322
|
2 116
|
+9.5
|
+10.0
|
|
Nestlé Nutrition
|
1 632
|
1 349
|
+7.0
|
+10.0
|
|
Other food and beverages *
|
805
|
627
|
+19.3
|
+20.6
|
|
Total food and beverages
|
22 495
|
21 186
|
+5.3
|
+7.1
|
|
Pharma
|
1 756
|
1 609
|
+10.8
|
+12.1
|
|
Total
|
24 251
|
22 795
|
+5.7
|
+7.4
|
* Mainly Joint ventures managed on a
worldwide basis and Nespresso
All calculations based on non-rounded
figures
Food
and beverages sales by geography
In the first quarter of
2007, the organic growth of Nestlé's total food, beverage and nutrition
business (including globally-managed businesses such as Nestlé Waters, Nestlé
Nutrition and Nespresso, as well as food and beverages joint ventures) amounted
to 3.4% in Europe, 8.6% in the Americas and 10.8% in Asia,
Oceania and Africa.
Zone Europe experienced organic growth of 1.9%. Demand in Western
Europe continued to be weak, although the Nescafé Dolce Gusto launch is
showing promising early results and the recovery of the UK confectionery business was reflected in market share gains. Eastern Europe delivered
double-digit organic growth, with Russia doing particularly well and all
product categories achieving double-digit growth there. Across the Zone, there
were good performances in confectionery, soluble coffee, ice cream and chilled
culinary products.
Zone Americas delivered a strong performance with organic
growth of 7.2%. PetCare, confectionery, soluble coffee, culinary and
ready-to-drink beverages did particularly well, and there were market share
gains in most categories. There was some buying ahead of price increases,
notably in PetCare and dairy-related categories.
Zone Asia, Oceania and Africa achieved organic growth of
10.3%, with strong double-digit performances in the emerging markets of Asia, including
China, as well as in Africa and the Middle East. Higher demand in Asia was partly in advance
of expected price increases resulting from higher milk and green coffee costs. This
performance reflects good growth across most product categories, notably culinary,
shelf-stable dairy and powdered beverages.
Nestlé Waters achieved 10.0% organic growth, with North America and the emerging markets delivering double-digit growth. Strong performances
by Nestlé Pure Life and the regional American brands such as Poland
Spring and Ozarka contributed to marked share gains in that market. France and Italy, as well as some of the smaller markets, contributed to positive organic growth in Europe, with Nestlé Aquarel, S.Pellegrino and Perrier all performing
well. The performance of Nestlé Waters reflects its success in positioning its product
range as a healthy choice for the whole family.
Nestlé Nutrition reached its longer-term 10.0% organic
growth target for the first time. The globally-managed business achieved strong
growth around the world due to a continued focus on value-added innovation
across its infant nutrition products and a particularly strong performance of Healthcare
Nutrition. This reported organic growth does not include any contribution from
Jenny Craig, or the recently announced acquisitions of Novartis Medical
Nutrition and Gerber.
Other Food and Beverage activities achieved outstanding
organic growth of 20.6%, with Nespresso achieving over 30% organic growth.
There were also strong performances from Beverage Partners Worldwide and Cereal
Partners Worldwide.
Sales by Product Group
|
||||
|
|
Jan.-March 2007 |
Jan.-March 2006 |
Real
internal growth
Jan.-March
2007
|
Organic
growth
Jan.-March
2007
|
|
|
in CHF million
|
%
|
%
|
|
|
Powdered
and liquid beverages
|
4 019
|
3 758
|
+7.3
|
+8.9
|
|
Nestlé
Waters
|
2 322
|
2 116
|
+9.5
|
+10.0
|
|
Milk
products and ice cream
|
4 340
|
4 236
|
+4.1
|
+6.5
|
|
Nestlé
Nutrition
|
1 632
|
1 349
|
+7.0
|
+10.0
|
|
Prepared
dishes and cooking aids
|
4 380
|
4 280
|
+3.1
|
+3.3
|
|
Chocolate,
confectionery and biscuits
|
2 870
|
2 659
|
+4.5
|
+7.3
|
|
PetCare
|
2 932
|
2 788
|
+4.9
|
+7.6
|
|
Pharmaceutical
Products
|
1 756
|
1 609
|
+10.8
|
+12.1
|
|
Total
|
24 251
|
22 795
|
+5.7
|
+7.4
|
All calculations based on non-rounded
figures
Among
the product groups, Powdered and liquid beverages achieved 8.9% organic
growth. Nescafé achieved high single-digit
growth in the Americas and Zone Asia, Oceania and Africa. In Europe, growth was
driven by the value-added mixes segment, while the Nescafé Dolce Gusto
launch has got off to a good start. In Asia, Nescafé Protect continued to do well.
Milk products and ice cream achieved 6.5% organic growth. Milk products' organic
growth was heavily influenced by price increases to offset significantly higher
milk costs. CoffeeMate performed well in the US. Ice cream had a strong
start to the year, with good performances from super premium brands such as Häagen-Dazs
and Mövenpick, as well as the successful roll-out of nutritionally enhanced
products.
Prepared dishes and cooking aids achieved 3.3% organic
growth. Maggi had a very strong start to the year in Africa and Asia, which saw the launch of new products inspired by traditional Chinese medicine. In North America, Lean
Cuisine showed good results. Europe experienced a slow start to year.
Chocolate, confectionery and biscuits reported 7.3% organic
growth. All three Zones contributed to this performance, with the Americas achieving double-digit growth. The category capitalized on a successful Easter
season, which came earlier this year than last, and is also benefiting from
increasing consumer interest in lighter, wafer-based snacking alternatives and
darker chocolate. Nestlé launched around 50 new dark chocolate products
worldwide during the first quarter of 2007.
PetCare achieved 7.6% organic growth. The Americas were particularly strong with continued momentum from 2006 launches of products
such as Beneful Prepared Meals and ONE Organics, as well as
positive early signs from 2007 launches. There was also growth in Europe, with Friskies continuing to make progress.
Nestlé's pharma activities started the year
well, with 12.1% organic growth. There were double-digit performances from the
main constituent, Alcon, as well as from the two joint ventures with L'Oréal,
Galderma and Laboratoires Innéov.
Outlook
In view of the strong start to the year, Nestlé can
reconfirm its targets for the full year: organic growth of between 5 and 6% and
an EBIT margin improvement at constant currencies, and this in spite of continued
significant input price pressures, mainly in agricultural raw materials.
Contacts: Media: François-Xavier
Perroud Tel.: +41-21-924 2596
Investors: Roddy
Child-Villiers Tel.: +41-21-924 3622