Nestlé reveals its profitable start to the year

Nestlé has reported that its first-quarter sales are up by 0.5%- higher than the leading food company had originally anticipated.

The international Swiss retailer said that its early sales rose to 20.9bn Swiss Francs, or $14.6bn. This was achieved through an increase in both prices and volume. Currency exchange rates, particularly the strength of the currency, reduced reported sales by 4.5%.

The chocolate, baby food and bottled water supplier is leading the market as the largest food company (by revenue) and joins celebratory sales uplift.

The group cites sales growth of 0.2p, and an organic growth that was up by 4.4p in the first three months of the year. Nestlé is predicting a sales increase of around 5% this year- a more promising result after the company‘s slow growth last year across its Western Europe and North American markets.

The rising value of the Swiss Franc has contributed to the deflation of the Swiss market. The Franc‘s growth was an aftermath of the country‘s central bank scrapping its de facto currency peg with the euro earlier this year, resulting in a 16% rise.

Nestlé reported an increase of 2.5% in its developed markets and a 6.7% increase in the retailer‘s emerging markets. Total bottled water sales rose by 7.4%, while confectionary was up by 7.5%.

Chief Executive Paul Bulcke said the growth in sales was in line with the expectations:

“Our full-year outlook is confirmed: we aim to achieve organic growth of around 5pc with improvements in margins, underlying earnings per share in constant currencies and capital efficiency”. 

By Natalie Whitmore


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