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

   
To Press Releases listVevey,Oct 23, 2003

  • Consolidated sales up 6 percent
    Organic growth (at comparable structure and constant exchange rates) increases to 4.8 percent, better than in first half of 2002
  • Acquisitions add 8.5 percent – foreign exchange reduces sales in Swiss francs by 7.3 percent
  • Real internal growth 3.4 percent as a result of recession in South America
  • Peter Brabeck, CEO of Nestlé: "Nestlé succeeded in maintaining profitable growth despite a deteriorating economic climate. I remain confident that we will yet grow our RIG figure by the end of the year and that we will achieve sales and profits above those of 2001, while once again delivering further improvement in operational performance."

Consolidated sales of the Nestlé Group reached CHF 66.2 billion during the first nine months of 2002, an increase of 6 percent over the corresponding period of the preceding year, even though exchange rates had a negative impact of 7.3 percent. In other words, at constant exchange rates sales increased 13.3 percent. At comparable structure and at constant exchange rates, sales grew 4.8 percent, composed of real internal growth of 3.4 percent and price increases of 1.4 percent, which demonstrate the Group's commitment to improve margins.

Sales by Management Responsibilities and Geographic Area
  January-September 2002
in CHF billion
January-September 2001
in CHF billion
Variation (%) January-September 2002
Real Internal Growth (%)
Food        
  - Europe 21.0 19.7  +6.4 +1.3
  - Americas 21.4 18.9 +12.8 +2.4
  - Asia, Oceania and Africa 11.2 11.5  -3.2 +2.4
Nestlé Waters  6.1  5.9  +3.7 +9.3
Other Activities *  6.6  6.4  +3.5 +7.1
Total 66.2 62.4 +6.0 +3.4
All calculations based on non-rounded sales figures
* Essentially pharmaceutical products, joint ventures and "Trinks" (Germany)

Real internal growth for the period January-September 2002 amounted to 3.4 percent. Nestlé Waters and Alcon showed continued strong internal growth, with 9.3 and 8.1 percent respectively. Europe grew at 1.3 percent, the Americas reached 2.4 percent and Asia, Oceania and Africa achieved growth of 3.7 percent. Emerging markets, both in Europe and in Asia, continued to grow strongly. Thus, in Eastern Europe, Nestlé was able to grow at 11.6 percent (with the Russian Federation achieving a RIG of 23.3 percent), mainland China showed 18.9 percent, the Philippines 6.8 percent and Southern Asia 11 percent. Conversely, real internal growth in Latin America felt the full impact of the deteriorating economic situation in several countries and was flat. North America, however, achieved a RIG of 3.8 percent.

Sales by Products Groups
  January-September 2002
in CHF billion
January-September 2001
in CHF billion
Variation (%) January-September 2002
Real Internal Growth (%)
Beverages 17.5 18.0  -2.7 +4.6
Milk/Nutrition 18.0 17.3  +3.7 +2.4
Culinary 11.3 10.9  +4.0 +4.9
Petcare  7.8  4.5 +74.2 +0.7
Chocolate/Confectionery  7.5  7.8  -3.7 +0.8
Pharma  3.9  3.9  +2.6 +8.1
Total 66.2 62.4 +6.0 +3.4
All calculations based on non-rounded sales figures

Several product groups achieved higher RIG in the course of the third quarter than during the first half of the year 2002. This is the case for beverages, culinary products as well as for chocolate and confectionery.

Price increases and other factors had a positive impact of 1.4 percent on sales. As expected, foreign exchange rates reduced the consolidated sales in Swiss francs by 7.3 percent, while acquisitions, net of divestments, contributed 8.5 percent to sales.

Outlook

In spite of the notable deterioration of the economic climate in some parts of the world, Nestlé remains confident that it will be able to improve real internal growth in the remaining three months of 2002. The Company also expects to once again achieve higher Swiss franc sales and profits for the year as a whole, in spite of the strong negative currency impact. It will also be able to deliver a further improvement in operational performance. This confidence is founded on the broad geographic spread of its business activities, its extensive product range, as well as its experience in dealing with difficult market conditions.

Contacts:
Media: François-Xavier Perroud Tel.: +41-21-924 2596
Investors: Roddy Child-Villiers Tel.: +41-21-924 3622
Related Links:
9M 2003 Sales Conference Call Presentation