Shares of Nestle SA (NSRGY,NSTR.L) were declining in the morning trading after the Swiss foods giant trimmed its organic sales growth view for fiscal 2016, citing the current softer environment. This was despite recording higher sales in its first nine months of fiscal 2016 with good sales growth in all regions.
Sales for the nine-month of 2016 rose 1 percent to 65.51 billion Swiss francs from last year's 64.86 billion francs, reflecting foreign exchange impact of negative 1.7 percent.
Organic sales growth was 3.3 percent, composed of 2.5 percent real internal growth and 0.8 percent pricing. All geographies and business categories delivered positive growth in generally subdued trading environments. Zone Americas recorded sales of 18.8 billion francs, representing 4.5 percent organic growth.
During the period, developed markets' organic sales growth was 1.9 percent and real internal growth was 2.5 percent. In emerging markets, organic growth was 5.3 percent and real internal growth was 2.5 percent.
Paul Bulcke, Nestlé CEO said, "In an environment marked by deflation and low raw material prices, we continued to privilege volume growth, resulting in real internal growth at the higher end of the industry in both emerging and developed markets. Pricing remained soft but increasing."
Looking ahead, for the full year 2016, Nestle now expects organic growth of around 3.5 percent, compared to previous estimate of growth in line with last year's organic growth of 4.2 percent.
The company continues to expect improvements in margins and underlying earnings per share in constant currencies, and increased capital efficiency.
Further, Nestle noted that effective January 2017, Nestlé Professional is moving from a globally-managed business to regionally managed businesses integrated in the Zones and supported by a Nestlé Professional Strategic Business Unit.
Nestle shares were trading at 73.80 francs, down 1.14 percent.
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