Nestle quarterly sales reach decade high

Business | 22 Apr 2021 6:05 pm

Coffee drinkers, pet owners and home bakers helped to drive the biggest rise in quarterly sales at Nestle for 10 years, as the world's biggest food group outshone Danone and set a high bar for Unilever, Reuters reports.

The Swiss group has weathered the pandemic well so far, as consumers have bought more packaged foods and tried to brighten up lockdowns with Starbucks at-home coffee or making treats with Carnation evaporated milk.

Nestle's ecommerce business also fared well in the first quarter, with sales up by 40 percent, and its health science business benefitted as people bought more vitamins and supplements. Demand for fortified milks boosted dairy too.

"What a blow out,“ the strongest quarterly number since 2011," Kepler Cheuvreux analyst Jon Cox said, pointing to a recovery in emerging markets, while Bernstein analyst Bruno Monteyne described the figures as an "amazing beat.''

The maker of KitKat chocolate bars and Nespresso coffee confirmed its full-year and medium-term sales guidance.

The company expects organic sales growth, which strips out currency swings and acquisitions/divestments, to increase this year versus the 3.6 percent achieved in 2020.

Organic sales leapt by 7.7 percent in the first quarter versus 4.3 percent in

the same period last year, easily beating a forecast for 3.3 percent growth in a company-compiled consensus https://www.nestle.com/investors/analysts-consensus and a 3.3 percent drop in sales posted by peer Danone this

week.

Unilever is due to post its first-quarter update on April 29.

The Americas, and also Asia where the pandemic struck first last year, showed particularly strong growth, while Europe saw a 4.4 percent rise.

Coffee was the largest contributor to growth, with Nespresso portioned coffee up more than 17 percent, dairy rising almost 16 percent and petcare around 9 percent, Nestle said.

The group's out-of-home business, which sells food and drinks to restaurants, hotels and cafeterias, struggled, although not as badly as earlier in the pandemic. Sales were down by 11.6 percent in the quarter, after falling over 30 percent last year.

The infant nutrition business returned to growth in China, but was under pressure elsewhere as birth rates fell.

Nestle said it had made further progress in reshaping its portfolio, as it expands in health and wellness foods and pulls out of underperforming businesses.

It recently sold its North American water brands to One Rock Capital Partners for US$4.3 billion and also offloaded its Yinlu peanut milk business in China.

Schneider has said the focus will be more on acquisitions this year. The group recently bought premium water brand Essentia in the United States.

 



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