Nestlé savours best quarter in decade

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

The Swiss group has weathered the COVID-19 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.

“Our confidence level to get to an organic growth rate of more than four per cent (this year) has certainly increased on the back of our first-quarter performance,” chief executive Mark Schneider said Thursday.

Nestlé’s e-commerce business also fared well in the first quarter, with sales up 40 per cent, and its health science business benefitted as people bought more vitamins and supplements. Demand for fortified milks boosted dairy too.

“What a blowout — 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.”

Shares in Nestlé, up just over two per cent so far this year, ended the day 2.9-percent higher.

The maker of Kitkat chocolate bars and Maggi soups confirmed its full-year guidance for higher organic sales growth, which strips out currency swings and acquisitions/divestments, than the 3.6 per cent achieved last year.

Schneider said he wanted to see how the COVID-19 recovery played out in the second quarter before revisiting a full-year guidance that might now seem conservative.

He cautioned against excessive margin expectations as input costs were on the rise.