From January to the end of March 2024, the Nestlé food group generated sales of CHF 22.1 billion. This is around six percent less than in the same period of the previous year, when CHF 23.5 billion was recorded. According to the company, currency effects reduced sales by 6.7 percent. Organic growth was 1.4 percent. Real internal growth was minus two percent and was impacted by subdued consumer demand, particularly in North America, and temporary supply shortages of vitamins, minerals and nutritional supplements.
Mark Schneider, Nestlé CEO, commented on the first quarter 2014 results as follows: "We had expected a slow start and see a strong rebound in RIG in the second quarter with reliable delivery for the remainder of the year. A wide range of growth initiatives across the Group are now starting to deliver. In North America, we have stepped up our innovation intensity and commercial activities, primarily in frozen food, which lost ground in the first quarter. The integration plan for Nestlé Health Science’s vitamins, minerals and supplements business is on track, with the turning point expected in the second quarter and strong growth thereafter. Nestlé’s top priorities remain to execute with excellence, leverage our science and nutrition expertise and drive growth with our billionaire brands. We reiterate our 2024 guidance and look ahead with confidence."
In terms of regions, organic growth was driven by Europe and the emerging markets, which more than offset the decline in sales in North America. Organic growth in the industrialised countries was minus 0.4 percent, with negative real internal growth and positive price adjustments. In the emerging markets, organic growth reached over four percent, led by price adjustments, with slightly negative real internal growth. In the North America region, the company generated sales of CHF 5.8 billion, a decline of just under eight percent. The Zone recorded market share gains in petcare and coffee products and losses in frozen pizza and coffee creamers. In Europe, sales totalled CHF 4.6 billion, down five percent on the previous year. Growth was balanced across all regions and categories. The Zone recorded market share gains in pet food and infant formula and a slowdown in the loss of market share in water products. In Asia, Oceania and Africa, reported sales fell by 9.4 percent to CHF 4.2 billion. The regions with the largest contributions to growth were Central and West Africa, India and the Philippines. Affordable offers ensured growth in these markets. The Zone recorded gains in market share in confectionery, coffee and pet food, while it suffered losses in dairy products. Reported sales in Latin America rose by 1.5 percent to CHF 3.1 billion. Growth was led by Brazil. Mexico recorded growth in the low single-digit range. Market share gains were achieved in pet food, infant and baby food and portioned coffee. Dairy products lost ground as a result of portfolio optimisation. On 1 March 2024, the group completed the acquisition of a majority stake in Grupo CRM, a Brazilian premium chocolate manufacturer. In China, sales fell by just under six percent to CHF 1.2 billion. Growth was driven by the continued momentum in the out-of-home channels and in e-commerce. The region recorded market share gains in soluble coffee, confectionery and pet food, but losses in infant and baby food.
The food company confirms its outlook for the current financial year and expects organic sales growth of four percent and a slight increase in the underlying operating profit margin.
Executive Vice President and Chief Executive of Zone Europe Marco Settembri will take his well-deserved retirement after more than 36 years with Nestlé. He will leave the Executive Board on 30 June 2024. Guillaume Le Cunff, currently CEO of Nespresso, will take over as Head of Zone Europe on 1 July 2024 and become a member of the Executive Board. He has been with Nestlé since 1998 and initially held management positions in Internal Audit and Finance before joining Nespresso in 2007. In 2020, Guillaume Le Cunff was appointed Global CEO of Nespresso, where he drove geographic expansion and organic growth. He launched initiatives such as Reviving Origins, a programme to support coffee-growing regions affected by conflict or natural disasters.
