Nestle satisfied with nine-month performance

Nestle satisfied with nine-month performance

Thursday, 17.10.2019

Nestle is continuing to transform its portfolio to focus on strategic segments such as coffee, nutrition, nutritional health or pet products. (Keystone)

Nestle recorded a 2.9% increase in sales to 68.37 billion francs in the first nine months of the year. The food giant said Thursday an organic growth of 3.7%, in line with expectations, with an evolution focused in particular by the United States and animal products.

"We are pleased with our nine-month performance and have made further progress towards our 2020 financial goals," CEO Mark Schneider said in a statement. Main market veveysan group, the United States have experienced a steady dynamic over the nine months. Brazil has also followed a favorable trend.

Overall sales were impacted by negative currency effects of 1.5%. The $ 68.37 billion announced is slightly below consensus forecasts of analysts consulted by AWP, which anticipated 68.75 billion.

Key data for observers, organic growth was 3.7% year-over-year, as expected, despite a small slowdown in the third quarter, and real internal growth (RIG) at 3.0%, exceeding 2.8% expected.

The group confirms its objectives for the entire year, with organic growth expected at 3.5% and an operating margin of 17.5% or more.

In addition, Nestle reports that the Starbucks coffee line, which is a strategic product for the group, is now available in 34 countries, including Switzerland (Coop).

20 billion for shareholders

The Board of Directors has also decided to distribute an amount of up to CHF 20 billion to shareholders during the period 2020 to 2022. At the same time, the dividend policy will be maintained.

The distribution is expected to be mainly in the form of share buyback programs as of January 2020. A portion of the total amount could also be allocated in the form of one or more special dividends between 2020 and 2022.

The group is continuing to transform its portfolio to focus on strategic segments such as coffee, nutrition, nutritional health or pet products. Investments in these sectors are continuing, while the review for Herta (deli) products, whose option of a sale was mentioned by observers, is likely to continue until the end of the year.

The group announces a restructuring of Nestle Waters. The related activities will be integrated as of January 2020 in the three geographical zones of the group. A new Strategic Business Unit (SBU) is created to "better respond to changing consumer tastes".

Nestle announces the appointment of Guillaume Le Cunff, currently President of Nestle USA, as the new CEO of Nespresso, effective January 1st. He will succeed Jean-Marc Duvoisin, who will take up new positions within the group. (AWP)