Nestlé saw its net sales rise by 1.4% in its third quarter thanks to the performance of its coffee and infant formula brands.
The world’s largest food and beverage company posted net sales of CHF 22.5 billion ($22.6 billion) in the three months to the end of September, recording mid-single-digit growth in China.
For the first nine months of the year, net acquisitions increased the company’s sales by 0.1% as the acquisition of Atrium Innovations, the Starbucks license and other transactions were offset by divestments, mainly the US confectionery business.
In its Americas zone, the firm’s largest area by revenue, sales shrank by 3.1% in the first nine months of the year compared to last year, which was largely due to the sale of its US confectionery unit. However, Nestlé drew attention to the positive performance of its Coffee-Mate creamer brand as well as ice cream segment.
Nestlé CEO Mark Schneider
Meanwhile, sales grew by 3.3% from January to September in Nestlé’s Asia, Oceania and Sub-Saharan Africa area. A strong performance in China was complemented by mid-single-digit growth in Southeast Asia, with positive momentum of its Maggi, Nescafé and KitKat brands.
Nestlé has been under pressure from Third Point after the activist investor bought a 1.25% stake in the company last year. It has since sought to reposition its brand portfolio with a focus on high-growth areas.
Earlier this year, Nestlé signed a $7.15 billion deal for exclusive rights to sell Starbucks’ line of packaged coffees and last year it concluded the acquisition of nutritional health product supplier Atrium Innovations.
Speaking of the latest results, Nestlé CEO Mark Schneider said: “We are encouraged by the progress on our path of accelerated value creation. The nine-month sales show solid growth across most geographies and product categories.
“We are starting to see improved momentum in North America and in our infant nutrition category globally. Our business in China continued to grow at a mid-single-digit pace. Our growth was supported by disciplined execution and faster innovation. We have reached significant milestones in portfolio management and are particularly pleased with the early closing of the Starbucks transaction.
“We have also made good progress on our various cost reduction programmes. Our growth and efficiency initiatives put us on track to meet our full-year 2018 guidance and 2020 targets.”
Nestlé has confirmed it wants to grow sales by around 3% this year.
© FoodBev Media Ltd 2019