Consumer giant Nestlé (NESN) posted first quarter organic growth ahead of expectations after a strong performance in the US and Brazil.
The world’s largest consumer group posted organic growth of 3.4%, with continued volume growth of 2.2% and a pricing increase of 1.2%.
Total reported sales increased by 4.3% to CHF22.2 billion (£16.9bn) as acquisitions, notably the global Starbucks license and Atrium Innovations, had a net positive impact of 1.2% and foreign exchange reduced sales by 0.3%.
The growth acceleration was largely driven by Brazil, its fourth largest market, while the US and China, Nestlé’s two leading markets, maintained “good momentum”.
Organic growth in its EMENA division was 2.1% despite a low-growth environment in Western Europe, with volume growth of 3.1% and a pricing decline on 1%.
Overall organic growth for the Group was 1.2% in developed markets and 6.3% in emerging markets.
All product categories saw positive growth. The largest growth contributions came from Purina petcare, dairy and infant nutrition.
Nestlé CEO Mark Schneider commented: “We are pleased with Nestlé’s solid organic sales growth in the first quarter, building on our full-year 2018 momentum. Our increased speed, innovation for a changing world and execution focus are clearly paying off. We confirm our outlook for the year.”
“In the quarter, we announced the launch of a new range of 24 premium coffee products under the Starbucks brand. The Nestlé and Starbucks teams did an outstanding job and developed these products in just 6 months.”
“The notion of business as a force for good resonates very strongly inside Nestlé. Starting with this report, we will highlight each quarter how Nestlé creates shared value. We will begin by showing how Nespresso delivers on its commitment to quality and sustainability.”
Nestlé also said its portfolio management efforts are “fully on track”, with the strategic reviews of Nestlé Skin Health and Herta charcuterie (cold cuts and meat-based products) expected to be completed by mid- and late 2019, respectively.
The group confirmed full-year guidance for 2019, with continued improvement in organic sales growth and underlying trading operating profit margin towards its 2020 targets. Both underlying earnings per share in constant currency and capital efficiency are expected to increase.
Nestlé shares rose 0.8% on the results up to CHF95.81.