Nestlé Group: Strong Organic Growth For the First Nine Months of 2003

 

- Strong organic growth of 5.4 percent

- Constant currency sales up by 6.8 percent

- Sales in Swiss francs stood at CHF 64.6 billion, down by 2.4 percent due to an adverse foreign exchange impact of 9.2 percent

 

 

Vevey, October 23, 2003 -  Consolidated sales of the Nestlé Group reached CHF 64.6 billion during the first nine months of 2003. At constant exchange rates, sales grew by 6.8 percent, composed of real internal growth of 2.3 percent and price increases of 3.1 percent, as well as a contribution from acquisitions, net of divestitures, of 1.4 percent. This strong pricing demonstrates the Group's commitment to protect EBITA margins. The negative exchange rate impact improved somewhat from 12.6 percent in the first half to 9.2 percent for the first nine months, but nevertheless resulted in a 2.4 percent dip in consolidated Swiss franc sales.

 

 

 

Zone Europe achieved organic growth of 2.3 percent. Eastern Europe reached 10.0 percent growth, outperforming more mature Western Europe, which delivered 1.6 percent.

 

Zone Americas achieved organic growth of 5.9 percent. In Latin America, the strength of the Group's brands allowed it to increase prices in line with its strategy to preserve margins in the face of the region's difficult economic conditions. Organic growth for the region as a whole stood at 10.6 percent. North America performed well, with 3.4 percent.

 

Zone Asia, Oceania and Africa achieved organic growth of 4.2 percent. In spite of the disruption caused by SARS, Greater China grew by 8.0 percent, whilst Africa, recovering from the slowdown caused by the troubles in Ivory Coast, grew by 12.9 percent. The important Japanese market also saw the first signs of a recovery.

 

Nestlé Waters did well in all its key markets around the world, including in the very competitive USA, and enjoyed 10.9 percent organic growth. Alcon achieved 9.4 percent organic growth.

 

 

Product categories such as soluble coffee and frozen & chilled culinary products performed well in the first nine months of the year, whilst ice cream and water benefited from the exceptionally hot European summer. Chocolate, on the other hand, was handicapped both by the hot weather and the price increases earlier in the year in response to higher cocoa prices.

 

 

Nestlé is confident that it will achieve an organic growth rate of between 5 and 6 percent for 2003 as a whole. Furthermore the various cost-efficiency initiatives, as well as GLOBE, are on track to reach their targets for 2003. The Group expects the currency impact to stabilize in the final quarter and looks forward to an EBITA margin improvement for the full year.