Swiss franc and European price war hold Nestlé back

Swiss franc and European price war hold Nestlé back

Swiss food concern Nestlé's turnover growth in the first 9 months of 2014 has failed to live up to the expectations. Price pressure and a strong Swiss franc have affected the group which owns brands like Nescafé, KitKat and Vittel.

4.5 % organic growth

The largest food manufacturer in the world managed a 66.2 billion Swiss franc (54.8 billion euro) turnover in the past 9 months, 3 % lower than in the same period last year. The reasons for the drop sound familiar: low consumer faith has limited Nestlé's price hike options in Europe, while a strong Swiss franc has had a huge negative impact.

 

The underlying numbers are positive however: excluding exchange rate fluctuations (- 7.5 %) and purchases (- 0.1 %), it has managed a 4.5 % organic growth, slightly below analysts' expectations at + 4.7 %. All regions have contributed to the positive numbers: Europe grew 1.4 %, North and South America 5.1 % and Asia, Oceania and Africa grew 6.5 %.

 

"In a volatile global trading environment where there are no tailwinds, we achieved good broad-based growth", CEO Paul Bulcke said. The company will stick to its previously-stated turnover growth forecast (+ 5 %) for 2014 and a profit increase (excluding exchange rate fluctuations).

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