Money Matters - Simplified

Nestle’s Q1 sales rise 4.4%

The strongest sales were registered by the food and beverages division, which amounted to 24.3 billion Swiss francs, and accounted for 90 percent of the total sales.

Backed by strong growth in the emerging economies, Nestle AG, the world’s biggest nutrition and food company, reported 4.4 percent increase in first quarter sales.

Headquartered in Vevey, Switzerland, Nestle reported total sales of 26.3 billion Swiss francs, or $24.6 billion.

In a statement Paul Bulcke, Nestle’s chief executive officer said, “Our strong sales performance in the first quarter confirms we are capturing opportunities in our different growth pillars, both in emerging and developed markets, even in a global economic environment which remains challenging.”

Strong sales
The maker of Nescafe coffee, Kit Kat chocolate witnessed growth in all the segments for the first quarter ended March 31.

The organic growth in the foods and beverages increased 6.1 percent, which includes the real internal growth of 4.5 percent.

Further, the organic growth of foods and beverages was 4.6 percent in Americas, 5.1 percent in Europe, and 11.2 percent in Asia, Africa, and Oceania.

Most of the growth came from increase in sales. The strongest sales were registered by the food and beverages division, which amounted to 24.3 billion Swiss francs, and accounted for 90 percent of the total sales.

Nestle also stuck to its forecast of seeing higher growth in all the divisions in 2010, and it is anticipating earnings before interest and taxes (EBIT) margin in constant currencies improve.

Sales in the Americas jumped to 7.63 billion Swiss francs from 7.49 billion Swiss francs in the same period a year earlier.

The sales in Europe amounted to 5.34 billion Swiss francs, up from 5.24 billion posted in the same quarter last year.

In Africa, Asia and Oceania, sales increased to 4.12 billion Swiss francs, which is 10 percent up from 3.74 billion Swiss francs reported a year earlier.

Nestle anticipating higher growth in 2010
Nestle also stuck to its forecast of seeing higher growth in all the divisions in 2010, and is anticipating earnings before interest and taxes (EBIT) margin improvement in constant currencies.

It also maintained that its input cost will only rise 2 percent in 2010, despite speculations that commodity prices will rise in the latter part of the year.

“We continue to increase investment in our brands, our innovation and new manufacturing and distribution capabilities, and will further drive our efficiency programmes across the world. I therefore reconfirm our outlook for 2010, both top and bottom line improvement,” added Bulcke.