1st Quarter Results
April 25 2005 - 3:01AM
UK Regulatory
RNS Number:4479L
Nestle SA
25 April 2005
Nestle: First-Quarter Performance
Confirms Full-Year Target
* Organic growth of 4.6 percent
* Pricing increase of 2.0 percent, compensating higher raw material costs
* Solid start to the year, full-year target of 5 to 6 percent organic
growth maintained
Peter Brabeck-Letmathe, Chairman and CEO of Nestle, said: "Our satisfactory
first quarter growth is in line with our expectations. It allows me to confirm
our full-year organic growth target of between 5 and 6 percent. While the first
quarter, as expected, still showed some upward pressure in raw material prices,
we were able to compensate this through price increases. I therefore believe
that we will be able to reach our target of an improved constant-currency EBITA
margin for the full year."
Vevey, 25 April 2005 - In the first quarter of 2005, the Nestle Group's
consolidated Swiss franc sales amounted to CHF 20.5 billion, an increase of 0.3
percent over the same period last year. Reported sales were once again affected
by a foreign exchange impact of -3.3 percent. Organic growth stood at 4.6
percent, consisting of real internal growth of 2.6 percent and price increases
of 2.0 percent. Divestments, net of acquisitions, reduced reported sales by 1.0
percent.
Sales by Management Responsibilities and Geographic Area
Jan.-March Jan.-March Real internal growth Organic growth
2005 2004 Jan.-March 2005 Jan.-March 2005
in CHF million % %
Zone Europe 6 953 6 886 -0.9 +0.7
Zone Americas 6 355 6 302 +5.1 +7.3
Zone Asia, Oceania and Africa 3 488 3 472 +1.9 +5.1
Nestle Waters 1 811 1 810 +3.9 +3.5
Other Activities * 1 857 1 939 +7.7 +9.1
Total 20 464 20 409 +2.6 +4.6
* Mainly pharmaceutical products, Nespresso, joint ventures managed on a
worldwide basis and Eismann (until August 2004)
All calculations based on non-rounded figures.
Zone Europe achieved organic growth of 0.7 percent, with real internal growth of
-0.9 percent com-pensated by a 1.6 percent increase in pricing. Organic growth
in Germany and Great Britain was posi-tive while France remained negative.
Eastern Europe enjoyed strong organic growth but was held back somewhat by
Russia, where chocolate distribution is being reorganized. Zone Americas
maintained its strong performance with organic growth once again above 7
percent. Nestle Purina North America and Dreyer's showed particularly high
growth rates. Zone Asia, Oceania and Africa experienced 5.1 percent organic
growth; while many emerging markets and Oceania enjoyed strong levels of organic
growth, there were weaker performances from Japan, the Philippines, as well as
Africa. Nestle Waters had a slow start to the year, in spite of excellent growth
in North America, since the main selling season in Europe has yet to begin.
Alcon and Nespresso continued their outstanding sales development.
Sales by Product Group
Jan.-March Jan.-March Real internal growth Organic growth
2005 2004 Jan.-March 2005 Jan.-March 2005
in CHF million % %
Beverages 5 080 5 019 +3.9 +4.7
Milk/Nutrition/Ice Cream 5 295 5 338 +0.9 +4.1
Prepared Dishes and Cooking 3 896 3 938 +2.2 +3.9
Aids
Chocolate/Confectionery 2 399 2 428 -0.3 +1.9
PetCare 2 437 2 385 +4.5 +6.4
Pharma 1 357 1 301 +7.6 +8.4
Total 20 464 20 409 +2.6 +4.6
All calculations based on non-rounded figures.
Among the product groups, Beverages had a good start to the year, with 4.7
percent organic growth. Soluble coffee had a strong performance as did
ready-to-drink beverages. Milk products, Nutrition and Ice cream enjoyed 4.1
percent organic growth. Real internal growth of shelf-stable dairy was held back
by a strong increase in pricing to offset the cost of higher milk prices.
Chilled dairy performed in line with the industry as a whole, with good growth
outside Europe but negative developments in France and Spain. Nutrition had a
strong performance, particularly in infant and healthcare nutrition, as did Ice
cream in the US. In Europe, markets are launching the new season's ice cream
products in time for the decisive coming months. Prepared dishes and cooking
aids achieved 3.9 percent organic growth with stronger performances in
traditional culinary products and frozen food, the latter particularly in the
US. In Europe, the launch of "Hot Pockets" is meeting with encouraging success.
PetCare enjoyed 6.4 percent organic growth, predominantly driven by US sales.
Chocolate and confectionery had organic growth of 1.9 percent, held back by a
weak performance in Sugar confectionery and distribution issues in Russia.
On 18 April 2005, Moody's Investors Service changed the rating outlook of Nestle
S.A. from negative to stable and affirmed the Company's Aaa senior long-term
debt ratings, reflecting past and future improvements in Nestle's financial
situation. Nestle is the only consumer goods company with an Aaa debt rating
and, in Moody's eyes, benefits from excellent competitive positions, a large
degree of finan-cial flexibility, a solid financial policy and strong liquidity.
The implementation of GLOBE is continuing unabated and CHF 16 billion of the
Group's sales are now covered. Major markets such as the UK, Germany, Russia and
India have already implemented GLOBE in 2005 or are in the process of doing so,
bringing the total number of GLOBE users to about 43,000 worldwide.
On the strength of Nestle's solid first-quarter performance and in view of
on-going product launches and price increases implemented over the past weeks,
the Company can confirm that it expects to achieve its stated targets for the
full year, specifically an EBITA margin improvement at constant cur-rencies as
well as organic growth of between 5 and 6 percent.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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