Nestle savours the flavour of the first three quarters

Food and confectionery conglomerate Nestle SA (LON: NESN) posted steady but positive sales fundamentals as it reflected upon the first nine months of full-year 2019.

The Company reported that its total sales during the period had risen 2.9% on a year-on-year comparison, up to CHF 68.4 billion. It also stated its organic growth of 3.7% – 3.0% from real internal growth and 0.7% from pricing – had been bolstered by strong performance in the US market and progress from its Purina PetCare brand. The Group added that net acquisitions made a positive impact of 0.7% while foreign exchange weighed sales down by 1.5%

Operationally, Nestle restated the sale of its Nestle Skin Health offering on October 1, for CHF 10.2 billion, and said its strategic review of Herta charcuterie business will conclude before the year’s end.

Looking forwards, the Company said it planned to distribute around CHF 20 billion to its shareholders between 2020 and 2022, which would be largely comprised of share buybacks. For the FY19, the Group forecast organic sales growth of 3.5%, alongside an operating profit margin of at least 17.5% and an ‘increase’ in underlying EPS.

Nestle comments

Mark Schneider, CEO, commented,

“We are pleased with our nine-month results and have made further progress towards our 2020 financial goals. We continue to see good momentum in our largest market, the United States and very strong growth for Purina PetCare globally. Nestlé’s growth was supported by investment behind our brands, rapid innovation and disciplined execution. During the third quarter, the roll-out of Starbucks products continued, now reaching 34 countries. Our portfolio transformation is fully on track, as shown by the timely completion of the Nestlé Skin Health disposal. With prudent investments and a disciplined approach to acquisitions our value creation model is generating profitable growth and attractive cash returns for our shareholders.”

Investor notes

The Company’s shares dipped 1.00% or 1.06p to 105.00p per share 17/10/19 14:02 CEST. Nestle SA’s market cap is 315.63 billion CHF, their dividend yield is 2.31%.

Elsewhere in food and beverage news, there have been updates from; The City Pub Group PLC (LON: CPC), Bakkavor Group Plc (LON: BAKK), Avangardco Investments Public Limited (LON: AVGR), Loungers PLC (LON: LGRS), The Coca-Cola Co (NYSE: KO), Devro plc (LON: DVO), Greencore Group plc, (LON: GNC) and NWF Group plc (LON: NWF).

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.