Nestlé posted worse than expected sales results for the first nine months of 2015 and lowered its 2015 growth forecast.
The Swiss transnational food and beverage giant reported sales of of 64.86 billion Swiss francs for the nine months of the year, down from 66.22 billion francs the previous year earlier, and shy of what analysts had forecast – of around 65.79 billion francs.
The company also cut its forecast for sales growth this year down to 4.5%, compared with an earlier forecast of “around 5%”, which makes 2015 the third successive year that the food and beverage company has failed to achieve its target annual growth rate of 5-6%.
Weak sales growth in Asia
For the first nine months of the year Nestlé saw organic growth of 4.2% (2.0% real internal growth and 2.2% pricing).
European sales climbed up 4% and sales in the Americas rose 6.2%.
However, sales growth in Asia, Oceania and Africa was only 1.1%. Growth in Asia was significantly affected by the withdrawal of Maggi noodles in India, and lackluster sales recovery in China.
Commenting on the sales results, Paul Bulcke, Nestlé CEO, said, “After a good performance in the first half of the year we were impacted in the third quarter by exceptional events, with Maggi noodles in India and a rebate adjustment in Nestlé Skin Health. Yet our real internal growth increased, reflecting broad-based positive momentum across our business and many of our markets.
“There was continued solid performance in Europe, Nestlé Waters and Nestlé Health Science. We made good progress in much of Latin America and delivered a significant improvement in North America, especially in frozen food, contrasting with slower sales recovery in China.
“On the whole, organic growth fell short of our expectations and therefore we project organic growth of around 4.5% for the full year, with improvements in margins and underlying earnings per share in constant currencies, and capital efficiency.”