Nestlé Results Boosted by Emerging Markets

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.

4/15/2011 --- In the first three months of 2011, Nestlé 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.

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."

Nestlé noted that the first quarter of 2011 saw a number of high-impact events ranging from civil unrest and natural disasters to extreme volatility in raw material prices. Nonetheless, the company’s strong momentum, both in organic growth and drive for improved efficiency and effectiveness, enables it to confirm full-year guidance: to achieve the Nestlé Model of organic growth between 5% and 6% and a margin improvement in constant currencies.

Sales of CHF 1.5 billion were reported for Nestlé Waters, 4.4% organic growth, 5.0% real internal growth. The business grew in Europe and North America and achieved double-digit organic growth in emerging markets, a performance reflected by market share gains in all its major markets. This is the result of continued growth in the retail market in Europe and North America, as well as a return to growth in the Home and Office Delivery market. Both the S. Pellegrino premium brand and the Nestlé Pure Life value-priced brand enjoyed double-digit organic growth. There were also strong performances from Perrier, Vittel and a number of regional brands, including Ozarka and Ice Mountain in North America, and Hepar in France.
 
Nestlé Nutrition had sales of CHF 1.9 billion, 8.9% organic growth, 7.3% real internal growth. Infant Nutrition had a good start to the year, building on its momentum from 2010, achieving double-digit organic growth. Asia, Africa, Russia and Latin America all grew strongly, as did the United States and France amongst developed markets. All divisions contributed well, with infant cereals continuing to grow double-digit. The division's big brands, Nestlé, Nan and Gerber, all performed well, and the business gained share globally. Jenny Craig, the weight management business, had a tough start to the year in the US due to continued weak levels of discretionary spend. The European roll-out is building momentum, with France particularly strong and a good consumer response in the UK. Performance Nutrition has started the year well, benefiting from innovation and increased brand support.