Nestle HQ

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Revenues have fallen at Nestlé in the first nine months of 2023 as falling volumes and currency headwinds outweighed higher prices at the Swiss food giant.

Organic growth in the period reached 7.8% thanks to an 8.4% increase in prices, while real internal growth (RIG) - the group’s measure of volume and mix - fell 0.6%.

Total reported sales declined 0.4% to CHF 68.8bn (£63.1bn) as currency translation pushed down the topline figure by 7.4%.

Nestlé confirmed its full-year outlook of between 7% and 8% organic sales growth and underlying trading operating profit margin between 17% and 17.5%.

CEO Mark Schneider said the group’s diversified portfolio and differentiated offerings helped deliver “strong” organic growth in the first nine months of the year.

“Growth was driven by pricing as we continued to navigate historic inflation levels,” he added. “The recovery of our volume and mix is underway.

“We are seeing the benefits of our portfolio optimization initiatives and increasing marketing investments behind our billionaire brands. These steps underpin our confidence that real internal growth, the sum of volume and mix, will turn positive in the second half of the year and again become the main driver of growth going forward.”

Shares in the group fell 2.1% to CHF 100.16 on the back of the update.

Morning update

Deliveroo reports ‘clear progress’ in Q3

Deliveroo has reported an increase to gross value transaction (GTV) and revenues in the third quarter but orders declined slightly.

GTV rose 5% in the three months to £1.7bn, while orders fell 1% to 69.7 million and revenues increased 3% to £487m.

In the UK & Ireland, the group boosted GTV by 9% to £1bn as orders jumped 3% to 38.8 million and revenues rose 7% to £297m.

However, internationally all three measures declined.

Deliveroo expected GTV growth to be lower single digits percentage growth in constant currency terms and forcast adjested EBITDA to be in the range of £60-80m.

CEO and founder Will Shu said he was “really pleased” with the results, especially the continued progress on service towards “a seamless delivery experience”.

“We’ve also made clear progress in promoting value within the app, which remains so important given the tough consumer backdrop,” he added.

“We continue to deliver strong performance in UKI and I’m encouraged by the improving growth trends in key international markets. My confidence in our ability to drive growth and deliver on our goals for profitability and sustainable cashflow generation has never been stronger, and I’m excited to share more at our Capital Markets Event on 29 November.”

Science in Sport CEO steps down

Science in Sport CEO Stephen Moon has stepped down from his role at the performance nutrition group and has been placed in garden leave with immediate effect.

Chairman Dan Wright has taken the helm in his place.

Wright thanked Moon for leading the company for more than a decade.

“He has been instrumental in Science in Sport and PhD becoming leading sports nutrition brands, culminating in the completion of the world-class supply chain facility in Blackburn that is pivotal for the next phase of profitable growth,” he added.

Moon said it had been “a privilege” to serve as CEO.

“Over my tenure, the business has grown from humble beginnings to a world class manufacturing facility, with a global omni-channel presence underpinned by two market leading brands.

“This could not have been delivered without the hard work and dedication of a talented workforce that I have had the pleasure to lead over this period. The business is set up to leverage the investment made in the Blackburn facility, which I believe will deliver continued high levels of growth and profitability over the long term.”

McBride warns of ongoing volatility

Embattled own label household products manufacturer McBride has warned of further volatility in commodity markets as a result of unrest in the Middle East.

The group also said in the trading update that a volatile inflationary environment had continued to persist as labour and energy costs continued to put pressure on the business even as raw material amd packaging costs stabilised.

“However, the continued effect of increases in the cost of living on consumers has meant that demand levels continue to be driven by a shift towards private label products across all markets and as a result, the favourable trading environment and momentum of the second half of FY23 has continued into the first quarter of FY24,” McBride added.

First quarter volumes were 8% higher overall year on year, with private label growth of 10.8%.

It helped McBride trade about £8m ahead of internal forecasts at an EBITA level.

Pernod Ricard experiences ‘soft’ start to year

Pernod Ricard has flagged a “soft” start to the year as organic sales declined 2% and revenues fell 8% to €3bn as the spirits group was hit by currency headwinds and lapped strong numbers from a year ago.

Net sales in the US and China both fell by 8% in the first quarter, while Europe registered a 1% uplift.

The group highlighted the UK as being “stable”, with a “strong” share in the on-trade.

Pernod Ricard guided that organic net sales growth for the year would be at the upper end of the 4-7% range.

CEO Alexandre Ricard said: “As expected we experienced a soft start to the year, yet I am encouraged we have largely offset declines in US and China this quarter, thanks to our good performance in other markets.”

Record harvest for Gusbourne

English wine producer Gusbourne has announced its biggest yield on record with the 2023 harvest.

Following the warm growing season of 2022, the vines emerged from winter in “great health” as good weather during the flowering period led to an abundance of fruit.

Interim CEO Mike Paul said: “2023 will mark Gusbourne’s biggest yield to date, but what is crucially important is that the vineyard team have maintained the high quality of the fruit which is the building block for our award winning wine.

“The winemaking team, led by Mary Bridges our head winemaker, are delighted with the potential for an amazing 2023 vintage. The resulting wines will be bottled during 2024, further adding to our inventory levels for sale in future years.”

Morning shares

The FTSE 100 declined by another 1.1% to 7,504.79pts this morning.

Deliveroo opened down 1.7% to 120.3p on the back of the Q3 statement, while McBride soared 21.3% to 39.6p as the market focused on the profit uplift rather than volatility warnings.

Pernor Ricard shares also rose 3.4% to €163.95.

Naked Wines and Nichols were also among the risers, up 2.8% to 47.5p and 1.8% to 906p respectively.

Fallers included Tate & Lyle, down 3.2% to 624.3p, and DS Smith, down 2.7% to 268.9p.

Yesterday in the City

The FTSE 100 sank 1.1% to 7,588pts yesterday as inflation remained stubbornly sticky at 6.7%.

After jumping in the early going, Just Eat Takeaway ended the day down 3% to 1,008p as the market sourced on the EBITDA upgrade.

Cake Box shares also fell 0.8% to 143.9p despite it showing continued recovery in its full-year trading update.