Food maker Nestle Chief Executive Paul Bulcke attends the company’s annual general meeting in Lausanne April 19, 2012. — Reuters picZURICH, April 20 — Nestle, the world’s biggest food group, reported forecast-beating first-quarter organic sales growth of 7.2 per cent today as emerging market demand and price rises helped offset sluggish growth in the developed world.
The Vevey-based maker of Nescafe coffee, KitKat chocolate bars and Maggi soup had been expected to post underlying sales growth of 6.6 per cent, according to a Reuters poll of analysts, down from 7.5 per cent growth in 2011.
“In many developed markets where consumer confidence is low, the trading environment is subdued whilst in most emerging markets, conditions remain dynamic and rich in growth opportunities,” Chief Executive Paul Bulcke said in a statement.
Sales to emerging markets recorded growth of 13 per cent compared with just 3.1 per cent in developed countries.
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, allowing it to confirm a full year outlook of five to six per cent organic growth.
It also made its standard forecast for improved margin and underlying earnings per share in constant currencies.
Sales rose 5.6 per cent to 21.4 billion Swiss francs (RM71.9 billion), meeting analysts average forecast, with 4.4 per cent of the rise in underlying sales coming from price increases and 2.8 per cent from volume.
French rival Danone reported better-than-expected like-for-like sales growth of 6.9 per cent in the first three months as its key Russian and US markets returned to growth.
Nestle shares have risen almost six per cent this year compared with an increase of 8.8 per cent for the European food and beverage index.
Nestle did not comment on a deal it is expected to seal this month to buy Pfizer’s infant nutrition business for up to US$10 billion to boost its business in China and extend its lead in the world of formula milk for babies. — Reuters