Uptick in Nestlé’s rev­enue growth

The Star Late Edition - - BUSINESS REPORT - Corinne Gretler

NESTLÉ SA, the world’s big­gest food com­pany, re­ported first-quar­ter rev­enue growth ahead of an­a­lysts’ es­ti­mates and an uptick in pric­ing, a sig­nal of pos­si­ble im­prove­ment in a slug­gish food and bev­er­age mar­ket.

Sales rose 2.3 per­cent on an or­ganic ba­sis, the Vevey, Switzer­land-based maker of KitKat choco­late said yes­ter­day. An­a­lysts ex­pected 2 per­cent. Nestlé’s pric­ing rose 1 per­cent com­pared with 0.9 per­cent in the fourth quar­ter.

The stock rose as much as 1.1 per­cent in Zurich.

The slight im­prove­ment in pric­ing gives a glim­mer of hope the food and bev­er­age mar­ket may show some re­cov­ery, ac­cord­ing to MainFirst Bank an­a­lyst, Alain Ober­hu­ber. It comes the same day Unilever an­nounced bet­ter-than-ex­pected rev­enue growth.

In Fe­bru­ary, Nestlé’s new chief ex­ec­u­tive Mark Sch­nei­der aban­doned sales and profit fore­casts the Nescafé maker had held on to for a decade and re­placed them with a goal to jump-start rev­enue by 2020.

“The pos­i­tives are the ac­cel­er­a­tion in Europe and Asia with pric­ing get­ting bet­ter in West­ern Europe, even if it is still neg­a­tive,” said Jon Cox, an an­a­lyst at Ke­pler Cheuvreux. Sales rose 2.3%, which could sig­nal im­prove­ment in the slug­gish food and bev­er­ages sec­tor

“The neg­a­tive is the Amer­i­cas, where North Amer­ica is frag­ile, some­thing of a sur­prise given the strong macro outlook there, and Brazil con­tin­ues to suf­fer from last year’s price in­creases.”

Rev­enue in Europe, the Mid­dle East and North Africa rose 1.7 per­cent, beat­ing the 0.5 per­cent an­a­lyst es­ti­mate. In Asia, Ocea­nia and sub-Sa­ha­ran Africa, rev­enue growth was 4.5 per­cent. An­a­lysts ex­pected 2.5 per­cent.

Still, it’s Nestlé’s slow­est quar­terly rev­enue growth this cen­tury, said An­drew Wood, an an­a­lyst at San­ford C Bern­stein. A later Easter pushed choco­late or­ders into the sec­ond quar­ter from the first this year.

Nestlé con­firmed its 2017 fore­cast. – Bloomberg

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.