Nestle Lifts 2020 Guidance Following 3Q Sales Growth -- Update
October 21 2020 - 3:49AM
Dow Jones News
-Nestle increased its organic sales growth of around 3% in the
full year
-Sales fell in the first nine months partly due to currency
effects
-Portfolio review is on track, expected to be finalized in early
2021
By Giulia Petroni
Nestle SA raised its full-year guidance for organic sales growth
on Wednesday after reporting 4.9% growth in the third quarter.
The Swiss food-and-beverage giant's sales in the first nine
months were down 9.4% to 61.91 billion Swiss francs ($68.24
billion) compared to the previous-year period, largely due to
foreign exchange currency effects. A company-compiled consensus had
forecast sales at CHF62.09 billion.
Organic sales growth in the nine months was 3.5%, with real
internal growth of 3.3%, boosted by a strong performance in the
Americas and demand for pet food and health products, the company
said.
Nestle raised its guidance for the full year, saying it now
expects organic sales growth at around 3%. It had previously
targeted organic growth in the range of 2% to 3%.
Demand for at-home consumption products was strong throughout
the period, while the out-of-home products' performance remained
negative. E-commerce increased, reaching 12.3% of the total group's
sales.
Nestle said Purina PetCare was the largest contributor to the
company's growth, boosted by premium brands Purina Pro Plan, Purina
ONE and Felix.
Health Science posting double-digit growth, reflecting an
increased demand for products supporting people's immune systems
during the pandemic. Confectionary and water registered a sales
decrease mainly due to their exposure to out-of home channels,
according to the company.
It also said it expects underlying trading operating profit
margin to improve, and underlying earnings per share at constant
currencies and capital efficiency to increase.
The strategic reviews of part of the North American waters
business as well as of the peanut milk and porridge business in
China are on track and expected to be completed early next year,
Nestle said.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
October 21, 2020 03:34 ET (07:34 GMT)
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