Nestlé nine-month sales: Confectionery the slowest growing segment

By Oliver Nieburg contact

- Last updated on GMT

Confectionery sales flat for Nestlé in first nine months. ©iStock/robtek
Confectionery sales flat for Nestlé in first nine months. ©iStock/robtek

Related tags: Chinese new year, Organic growth

Nestlé has posted flat confectionery revenues for the first nine-months of 2017 while all other business segments grew.

The Swiss giant yesterday reported its Nine-Month Sales results (January to September).

Nestlé’s overall revenues for the nine-months dropped -0.4% on the same period last year to CHF 65.3bn ($66.5bn), representing +2.6% organic growth and +1.8% real internal growth.

Recovery in Europe

The KitKat owner’s global confectionery revenues rose +0.8% on a like-for-like basis to CHF 5.98bn ($6bn).

Nestlé said this represented 0% organic growth and +1.4% real internal growth.

Nestlé’s six other categories - including water, nutrition and pet care - recorded between +2.3% and +3.5% organic growth.

“However, [confectionery] still bears some impact from the timing of Chinese New Year, and the flat organic growth represents a meaningful improvement since the half year when growth was actually negative,”​ said François Roger, CFO of Nestlé, during the company’s earnings call.

He added confectionery returned to growth in the third quarter in Zone EMENA (Europe, Middle East & North Africa), driven by increased volumes.

Reviewing the brand mix

Nestlé said last month​ the company remains committed’ to global confectionery, despite plans to offload its US confectionery business, including brands such as Crunch and Butterfinger.

Pablo Zuanic, senior equity analyst at SIG previously suggested​ Nestlé may move in a new direction and decide to get out of confectionery entirely after appointing CEO Mark Schneider from health care group Fresenius in January this year.

Marco Settembri, Nestlé CEO of Zone EMENA, said at last month’s Nestlé’s Investor Seminar, the firm’s confectionery business in Europe still has room to grow.

However, he hinted the company may review its high number of confectionery brands in the region, which he said was “not sustainable”.

Nestlé yesterday reaffirmed full-year 2017 sales guidance for the group of +2-4% organic growth, likely to be in the lower half of the range.

Related topics: Manufacturers, Nestlé

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