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Nestlé sales growth slows – but CEO reconfirms expectations

By Caroline Scott-Thomas+

18-Apr-2013

Nestlé has reported slower sales growth in the first quarter of 2013 hit by unrest in the Middle East and a cold start to spring, which affected sales of ice cream and bottled water.

The food and nutrition giant reported sales growth of 4.3% in Q1 to reach CHF21.9bn (about €18bn). The company has a growth target for 2013 of 5% to 6% – but it missed this goal in four out of seven categories: beverages, water, milk and ice cream, and prepared dishes.

Nestlé CEO Paul Bulcke said in a statement: “The start to the year reflects the caution we expressed in February. We continue to expect some volatility throughout 2013 but reconfirm our expectation to deliver on our commitments for the full year.”

Nestlé was also affected by ongoing weakness in Europe, where sales grew just 1% in the quarter, but Bulcke defended the company’s performance in the region.

“We are outperforming the market in Europe where consumer sentiment remains low,” he said. “We are seeing progress in our North American business and we expect to see stronger momentum in key emerging markets.

“Our global presence, unrivalled category diversity and our proven ability to bring innovative products and services to our consumers allow us to deliver in the short term while at the same time creating the right conditions for continued success over the long term.”

Petcare was the company’s best-performing category, with 7.9% growth; nutrition and healthcare was up 6.3%; and confectionery was up 5.8%. Emerging markets now account for 45% of the company’s sales.

In the Middle East, there were supply shortages after a factory that supplied the region was destroyed in Syria.

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