Lowest Q1 sales for Nestlé in four years

Sales below expectations

With those quarterly results, Nestlé remains below
expectations: analysts had estimated sales of 22.5 billion francs and an
organic growth of 4.7% In last year’s first quarter, Nestlé’s
sales grew by 7.2%.

“The beginning of the year reflects the
cautiousness we showed in February”, says Paul Bulcke of Nestlé Belgium, while
still confirming current predictions for the entire year. This means Nestlé is
still aiming for an organic growth of 5 to 6% this year.

Once more “Europe in crisis”

Just like competitor Danone earlier this week,Nestlé points to the crisis in Europe, making the consumer spend less and cut
corners where possible.

While the American market grew by 5.1% and the region Asia-Oceania-Africa even by 6.1%, the old
continent only managed to scrape one percent extra together. Nestlé adds that
the Benelux did have a good start, as opposed to France and Germany, who are
only now starting to gain momentum.

“We also see progress in our North American
activities and are expecting a stronger dynamic in the most important growth markets”,
they say at the headquarters in Vevey.  The reference to growth markets is no
coincidence: last quarter they had a growth of 8.4%, while Nestlé only grew
0.9% in the more “mature” markets.

Nutrition biggest grower

Nestlé Nutrition was the strongest branch of
the company with a rise of 7.6% to 2.5 billion francs (about two billion euro).
Nestlé Waters made the smallest progress: only 1.8% to 1.6 billion francs
(circa 1.3 billion euro).

The other activities had a growth of 4.2% to
2.9 billion francs (about 2.39 billion euro). Nespresso was the biggest
contributor, because of a “broader geographic foot print”.