Nestlé has raised its full-year organic growth guidance to the top-end of a previously-flagged range as the third-quarter print for that metric beat market expectations.
Announcing third-quarter and nine-month results this morning (21 October), the KitKat maker now predicts organic growth of 3% for the year, compared to a prior estimate of 2-3%, amid what it said was a “broad-based” improvement across the business in the latest quarter.
Organic sales climbed 4.9% (consensus +2.8%) in the quarter, producing a figure for the nine months of 3.5%. Year-to-date sales came in at CHF61.9bn (US$68.3bn), which on a reported basis represented a decline of 9.4%. Divestitures and foreign exchange reduced sales by 12.9%, Nestlé explained.
In other areas of the guidance, the Maggi noodles brand owner said “the underlying trading operating profit margin is expected to improve [and] underlying earnings per share in constant currency and capital efficiency are expected to increase”.
CEO Mark Schneider said: “Nestlé has remained resilient in a difficult and volatile environment. Strong organic growth was broad based and supported by sustained momentum in the Americas, Purina PetCare and Nestlé Health Science, as well as the acceleration of our coffee business in the third quarter.”
Nestlé said strategic reviews of its waters business in North America and the Yinlu peanut milk and canned rice porridge businesses in China are “fully on-track” and are expected to be completed “early” next year.
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Elsewhere in today’s results, sales based on real internal growth (RIG), which excludes M&A and pricing, rose 3.3% over the nine months. Pricing growth wa ;0.2%. Organic growth was 3.9% in developed markets, based entirely on RIG, while emerging markets improved to 2.8%.