Nestlé reports 5.4% rise in Q1 2013 net sales

Swiss food giant Nestlé has reported a 5.4% increase in its net sales for the first quarter of 2013, driven by growth across all regions and product lines.

The company’s net sales totalled CHF21.94bn ($23.5bn) for the quarter, compared with CHF20.82bn ($22.34bn) for the same period in 2012.

Although the net sales increased in the first quarter, it is the lowest level increase since the third quarter of 2009 and is below the Nestlé’s long-term annual target of 5% to 6%.

Organic sales, including 2.3% real internal growth and 2% pricing, increased 4.3%.

Nestlé CEO Paul Bulcke said volatility is expected throughout 2013, but he reconfirmed the company’s expectations to deliver on commitments for the full year, in terms of top line, bottom line and capital efficiency.

"We are outperforming the market in Europe where consumer sentiment remains low," said Bulcke. "We are seeing progress in our North American business and we expect to see stronger momentum in key emerging markets."

He added: "Our global presence, unrivalled category diversity and our proven ability to bring innovative products and services to our consumers allow us to deliver in the short term while at the same time creating the right conditions for continued success over the long term."

The company registered growth in all regions across the world in Q1 2013, including 5.3% organic growth in the Americas, 1.5% in Europe, and 4.4% in Asia, Oceania and Africa.

The Americas regions, with growth in both North America and Latin America, reported sales of CHF6.6bn ($7.08bn) driven primarily by improved performance of pet care, dairy, chocolate, powdered beverages and culinary.

Sales in the European region totalled CHF 3.7bn ($3.97bn), with both the Western and Central and Eastern Europe generating good performance with a general improvement in market shares.

Nestlé noted that there had been a decline in its frozen food business in Europe, partially due to the horse-meat scandal, which led to the company withdrawing two chilled pasta products in Italian and Spanish grocery stores.

It said it does not expect much of a recovery this year.

With improvement in both developed and emerging markets, sales in the Asia, Oceania and Africa regions totalled CHF4.7bn ($5.04bn).

For the full-year 2013, Nestlé expects to deliver organic growth between 5% and 6%, together with an improved trading operating profit margin and underlying earnings per share in constant currency, as well as improvement in capital efficiency.

---

Image: Nestlé CEO Paul Bulcke said the company expects some volatility throughout 2013 but reconfirms its expectation to deliver its commitments for the full year. Photo: Courtesy of Nestlé.