Monday 20 January 2020

Sluggish growth means tough 2012 for Nestle

Emma Thomasson

NESTLE, the world's biggest food group, warned 2012 would be a tough year due to sluggish growth in the developed world, as emerging market demand and price rises helped first-quarter underlying sales growth hold up better than expected.

The Swiss maker of Nescafe coffee, KitKat chocolate bars and Maggi soup reported a slight deceleration in quarterly organic sales growth that still beat forecasts as price hikes contributed more to growth than analysts expected.

"As anticipated, 2012 is already confirming itself to be a challenging year," said chief executive Paul Bulcke.

Emerging markets -- which already make up more than 40pc of Nestle sales -- grew 13pc compared with just 3.1pc for developed countries, with volume growth down 0.4pc in the Americas and only rising 0.2pc in Europe.

"A strong set of figures, although we see the outlook statement as somewhat subdued," said Kepler analyst Jon Cox.

Nestle said high commodity prices were still a headwind for the first half of the year but predicted a "likely improved raw material environment" in the second half.

That meant Nestle's forecast for improved margins in constant currencies would be more weighted to the second half of the year, investor relations head Roddy Child-Villiers told an analysts' call.

Irish Independent

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