Nestle nine-month report: strong organic growth continues

Vevey / CH. (nsa) «The group´s strong organic growth continued over the third quarter, reflecting good performances across most product categories. In spite of increasing input cost pressures, I remain confident that Nestle will achieve above-target organic growth and a sustainable margin improvement for 2007 as a whole, once again demonstrating the strength of the Nestlé model», said Peter Brabeck-Letmathe, Chairman and CEO of Nestle S.A. during the presentation of the nine-month results in Vevey, Switzerland. An overview in key facts:

  • Sales of 78,7 billion CHF, up 6,5 billion CHF (plus nine percent)
  • Above-target organic growth of 7,2 percent, real internal growth of 4,5 percent
  • Food and Beverages: 6,8 percent organic growth
  • Strong Nestle brands allowed price increases to mitigate rising input costs
  • Unchanged full-year outlook: above-target organic growth with sustainable margin improvement
  • New, globally-managed out-of-home business, Nestle Professional, established
  • Paul Polman, Nestle´s CFO, to head Zone Americas from February 2008
  • James Singh, Nestle´s head of Acquisitions and Business Development, to become CFO from January 2008

During the first nine months of 2007, consolidated sales of the Nestle Group amounted to 78,7 billion CHF, an increase of plus nine percent over the comparable period of 2006. Real internal growth was strong at 4,5 percent and pricing added another 2,7 percent, resulting in an organic growth of 7,2 percent. The strength of Nestle´s brands allowed the group to raise prices to offset rising raw material costs. These price increases, together with the resulting slight dip in real internal growth, reflect the group´s commitment to profitable growth regardless of market circumstances. Foreign exchange contributed plus 0,9 percent to reported sales, while acquisitions, net of divestitures, added another plus 0,9 percent to sales. The group´s Food and Beverages business achieved organic growth of 6,8 percent, consisting of real internal growth of 4,2 percent and price increases of 2,6 percent (detailed press release).