NESTLE NOM. 
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* Sales of CHF 79.5 billion, 3.8% organic growth in third quarter
* Real internal growth up to 1% for nine months, 2% real internal
growth in third quarter
* 2009 share buyback increases from CHF 4 billion to CHF 7 billion
due to solid operational performance
* Full-year outlook unchanged: volume-driven organic growth
acceleration and EBIT margin improvement in constant currencies
Paul Bulcke, CEO of Nestlé: "The increased momentum of real internal
growth in the third quarter, coming on top of high growth in 2008,
once again proves the strength of Nestlé's strategy. In these
challenging times, we have been streamlining our structures and
product portfolio and, at the same time, we continue to invest in
innovative technologies and expand our R&D capabilities around the
world. In addition, we have increased spending in product innovation
and consumer-facing brand-support. All this allows me to confirm my
expectation that volume-driven organic growth will further accelerate
and that the EBIT margin in constant currencies will improve for the
full year."
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Full details in Events
In the first nine months of 2009 the Group achieved organic growth of
3.6%. Real internal growth reached 1.0% having accelerated throughout
the year and across most segments of the business. Divestitures, net
of acquisitions, had a negative impact of -0.6% on Group sales, as
did the currency effect of -5.2% due to the strength of the Swiss
franc compared to most other currencies. These two factors
contributed to a reduction in Nestlé Group sales of -2.2%, to CHF
79.5 billion.
Organic growth for Nestlé's food and beverage business was 3.5%. Real
internal growth accelerated in the third quarter to reach 0.7% for
the nine months from 0.1% at the half year. This improvement was
evident in each region, resulting in organic growth of 4.4% in the
Americas, 0.9% in Europe and 6.5% in Asia, Oceania and Africa for
Nestlé's total food and beverage businesses.
The nine-month sales and the first half EBIT margin improvement
demonstrate Nestlé's ability to deliver solid performance on top of
strong growth in 2008, whilst continuing to invest in longer-term
strategic priorities. Emerging markets enjoyed 7.5% organic growth.
Popularly Positioned Products, a business model now well established
in emerging markets, delivered double-digit growth as the roll-out in
developed countries gathered pace.
Sales by operating segment
+-------------------------------------------------------------------+
| | | | | Real |
| | | | | Internal |
| | Jan-Sept | Jan-Sept | Jan-Sept | Growth |
| | 2009 | 2009 | 2009 | (bps) |
| | Sales | Organic | Real | Jan-Sept |
| | in CHF | Growth (%) | Internal | 2009 |
| | millions | | Growth (%) | Vs. |
| | | | | Jan-June |
| | | | | 2009 |
|-------------------+----------+------------+------------+----------|
| Food & Beverages | | | | |
| * Zone Americas | 23 393 | + 6.4% | + 2.3% | +40 |
|-------------------+----------+------------+------------+----------|
| * Zone Europe | 16 514 | 0.0% | - 1.5% | 0 |
|-------------------+----------+------------+------------+----------|
| * Zone Asia, | 11 713 | + 5.8% | + 3.0% | +80 |
| Oceania, Africa | | | | |
|-------------------+----------+------------+------------+----------|
| Nestlé Waters | 7 220 | - 1.8% | - 2.3% | +140 |
|-------------------+----------+------------+------------+----------|
| Nestlé Nutrition | 7 479 | + 2.0% | - 1.5% | +90 |
|-------------------+----------+------------+------------+----------|
| Other Food & | 7 390 | + 6.2% | + 2.8% | +40 |
| Beverages | | | | |
|-------------------+----------+------------+------------+----------|
| Total Food & | 73 709 | + 3.5% | + 0.7% | +60 |
| Beverages | | | | |
|-------------------+----------+------------+------------+----------|
| Pharma | 5 838 | + 5.9% | + 5.5% | +40 |
|-------------------+----------+------------+------------+----------|
| Group Total | 79 547 | + 3.6% | + 1.0% | +50 |
+-------------------------------------------------------------------+
All calculations based on non-rounded figures.
Globally managed Nestlé Professional activities have been taken out
of the Zones and included in "Other Food & Beverages".
Zone Americas: sales of CHF 23.4 billion, 6.4% organic growth and
2.3% real internal growth. In North America, the real internal growth
of petcare, ice cream, soluble coffee and chocolate accelerated in
the third quarter, but slowed for frozen food. Brazil continued to
build on the positive momentum, mainly due to growth in the ambient
dairy category. Mexico and the rest of the region also showed
improvement in the third quarter.
Zone Europe: sales of CHF 16.5 billion, 0% organic growth and -1.5%
real internal growth. Germany, France, Switzerland, the Iberian
region and Italy saw a rise in real internal growth. The Great
Britain region delivered a strong performance, although the third
quarter was weaker. Eastern Europe presented a mixed picture with
weaker third-quarter real internal growth in Russia and the Czech and
Slovak Republics, while Poland and the Ukraine enjoyed stronger
growth. By category, sales volumes were good in soluble coffee,
chilled culinary, powdered beverages and petcare.
Zone Asia, Oceania and Africa: sales of CHF 11.7 billion, 5.8%
organic growth and 3.0% real internal growth. All the emerging
regions contributed to improved volumes, although real internal
growth in Oceania and Japan was unchanged. There was strong real
internal growth in China, the Philippines, South Asia and Africa. The
Middle East continued to improve. By category, real internal growth
in ambient dairy improved and remained strong in ambient culinary,
soluble coffee, powdered beverages and chocolate.
Nestlé Waters: sales of CHF 7.2 billion, -1.8% organic growth and
-2.3% real internal growth. Real internal growth for the third
quarter improved, mainly due to an acceleration in Europe where the
business benefited from renewed brand support. The category as a
whole was weak in North America, but the Nestlé business gained
market share. The emerging markets business enjoyed strong growth.
Nestlé Pure Life continued to achieve double-digit growth in the
emerging markets and North America.
Nestlé Nutrition: sales of CHF 7.5 billion, 2.0% organic growth and
-1.5% real internal growth. Infant nutrition's real internal growth
improved in all three zones, benefiting from a strong innovation and
renovation pipeline and increased marketing support. NaturNes
continued to build market share in Europe. Healthcare Nutrition
achieved good momentum in its core areas in the wake of recent
rationalisation measures, and performed particularly well in Zone
Asia, Oceania and Africa. Jenny Craig was affected by weak
discretionary spend in the US. Performance nutrition saw good
acceleration in all three zones.
Other Food and Beverages: sales of CHF 7.4 billion, 6.2% organic
growth and 2.8% real internal growth. Nespresso continued to deliver
double-digit growth. Growth was positive in both the joint ventures,
Cereal Partners Worldwide and Beverage Partners Worldwide. As a
newly-created, globally-managed business, Nestlé Professional
delivered slightly improved growth momentum, in spite of weak
out-of-home consumption.
Pharma: sales of CHF 5.8 billion, 5.9% organic growth, 5.5% real
internal growth. Alcon and the joint ventures as a whole achieved
good growth.
Sales by product segment
+-------------------------------------------------------------------+
| | | | | Real |
| | | | Jan-Sept | Internal |
| | Jan-Sept | Jan-Sept | 2009 | Growth |
| | 2009 | 2009 | Real | (bps) |
| | Sales | Organic | Internal | Jan-Sept |
| | in CHF | Growth | Growth | 2009 |
| | millions | (%) | (%) | Vs. |
| | | | | Jan-June |
| | | | | 2009 |
|-----------------------+----------+----------+----------+----------|
| Powdered and liquid | 13 952 | + 9.8% | + 5.3% | + 60 |
| beverages | | | | |
|-----------------------+----------+----------+----------+----------|
| Water | 7 224 | - 1.9% | - 2.3% | +140 |
|-----------------------+----------+----------+----------+----------|
| Milk products and ice | 14 883 | + 0.7% | - 0.2% | +110 |
| cream | | | | |
|-----------------------+----------+----------+----------+----------|
| Nutrition | 7 481 | + 2.0% | - 1.5% | + 90 |
|-----------------------+----------+----------+----------+----------|
| Prepared dishes and | 12 379 | 0.0% | - 0.5% | - 50 |
| cooking aids | | | | |
|-----------------------+----------+----------+----------+----------|
| Confectionery | 8 177 | + 4.0 % | - 1.6% | - 30 |
|-----------------------+----------+----------+----------+----------|
| PetCare | 9 613 | + 8.8% | + 3.2% | + 50 |
|-----------------------+----------+----------+----------+----------|
| Total Food & | 73 709 | + 3.5% | + 0.7% | +60 |
| Beverages | | | | |
|-----------------------+----------+----------+----------+----------|
| Pharmaceutical | 5 838 | + 5.9% | + 5.5% | +40 |
| products | | | | |
|-----------------------+----------+----------+----------+----------|
| Group Total | 79 547 | + 3.6% | + 1.0 % | +50 |
+-------------------------------------------------------------------+
All calculations based on non-rounded figures.
The slight difference in the figures for water and nutrition between
the "Sales by operating segment" and "Sales by product" tables is due
to the fact that some water and nutrition products are also sold by
management segments other than Nestlé Waters and Nestlé Nutrition.
Powdered and liquid beverages: sales of CHF 14.0 billion, 9.8%
organic growth and 5.3% real internal growth. All segments
contributed to the acceleration in real internal growth, with strong
results for billionaire brands Nescafé, Nesquik, Nespresso and
Nestea, which accounted for 80% of this product group's sales.
Nesquik in North America and Europe and Milo in Asia benefited from
their health and wellness profiles. Nescafé enjoyed strong growth in
all three zones. Nescafé Dolce Gusto reached organic growth of over
50%, taking strategic market positions in the 16 countries where it
has so far been rolled out. Nespresso delivered 28% organic growth.
Milk products and ice cream: sales of CHF 14.9 billion, 0.7% organic
growth and -0.2% real internal growth. Real internal growth for
ambient dairy continued to build momentum during the year, driven by
a strong range of Popularly Positioned Products with brands such as
Nido. Coffee-mate, primarily in the US, continued to achieve almost
double-digit growth. The ice cream business increased its leadership
position in the US, its biggest market, with strong communication
around nutrition-focused innovations, particularly in the
super-premium segment. In Europe, the performance was stronger in the
North with successful launches of Nestlé Extrême All Natural in
countries such as Germany and Switzerland, but weaker in the South.
Prepared dishes and cooking aids: sales of CHF 12.4 billion, 0%
organic growth and -0.5% real internal growth. In Europe, the dough
segment and frozen pizza business delivered growth, with Herta also
performing well, whilst ambient culinary and frozen meals were
weaker, particularly due to lower out-of-home consumption. In the US,
Hot Pockets and Stouffer's family packs performed well, but demand
was weaker for its single serve offerings and for Lean Cuisine. Good
demand in Africa, Asia, Eastern Europe and Latin America continued to
deliver double-digit growth for Maggi in emerging markets.
Confectionery: sales of CHF 8.2 billion, 4.0% organic growth and
-1.6% real internal growth. There was some softness in the growth of
biscuits and sugar confectionery, but the chocolate business
continued to make good progress. Kit Kat continued to perform well
overall. Demand was weak in Russia, while many emerging markets
delivered strong growth with products such as Nestlé Classic tablets
in Turkey, Munch in India and Sahne Nuss in Chile. Core brands gained
momentum in the US.
PetCare: sales of CHF 9.6 billion, 8.8% organic growth and 3.2% real
internal growth. Strong growth for the nine months in petcare
reflected continued innovation and renovation of key brands such as
Friskies, Beneful, Dog Chow, Bakers, ONE and Gourmet, which
outperformed the category in all regions. New product launches, such
as Chef Michael's dry and wet dog food, also contributed to the
strong performance.
Share buyback
Based on Nestlé's solid operational performance, the Board of
Directors has agreed to increase the 2009 share buyback programme
from CHF 4 billion to CHF 7 billion. This change will allow the
company to complete its current CHF 25 billion share buyback
programme earlier than initially contemplated. The Board of Directors
expressed satisfaction at Nestlé's current credit rating which
allowed easy access to financial markets at attractive pricing during
the financial crisis, and reaffirmed its decision to maintain the
company's current credit quality for the foreseeable future.
2009 outlook
The nine-months performance is in line with earlier guidance, with
growth momentum increasingly driven by real internal growth. The
Group therefore continues to expect volume-driven organic growth to
further accelerate as well as an EBIT margin improvement in constant
currencies for the full year.
Contacts Media Robin
Tickle Tel.: +41 (0)21 924
22 00
Investors Roddy
Child-Villiers Tel.: +41 (0)21 924 36
22
--- End of Message ---
Nestlé S.A.
Avenue Nestlé 55 Vevey
WKN: 887208; ISIN:
CH0012056047; Index: SLCI, SMI, SPI, SMIEXP;
Listed: Main Market in SIX Swiss Exchange;
Copyright © Hugin AS 2009. All rights reserved.NESTLE NOM. : Nestlé 9-month sales: 3.6% organic growth based on increased real internal growth momentum
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