The Vevey, Switzerland-based company said Thursday it had
sales of 60.9 billion francs ($67.84 billion) through September, down from 70.4
billion francs ($78.42 billion) during the same period in 2010.
The maker of Nescafe, Jenny Craig and Haagen-Dazs said the
results were affected by a sharp rise in the value of the franc and the
disposal of its stake in Alcon. Nestle sold its stake in the firm to
pharmaceutical company Novartis last year for a net profit of some $45 billion.
Nestle shares were down 1 percent at 51.05 francs ($56.43)
on the Zurich exchange.
Discounting the currency and disposal effects, Nestle raised
its long-term organic growth outlook based on what it called strong organic
growth of 7.3 percent. That included 13.1 percent organic growth in emerging
markets and 4 percent in developed markets.
Chief executive Paul Bulcke said the company now expects to
do slightly better than its long-term organic growth range target of 5-6
percent, and is focused on developing products that can build market share.
“In spite of raw materials and financial markets, we hope to
slightly outperform our organic growth target,” said Bulcke, speaking from
Paris since France is Nestle’s second-biggest market, behind the United States.
Chief financial officer Jim Singh conceded that the strength
of the Swiss franc was weighing on earnings but he insisted that Nestle
“maintained a solid growth momentum” with more than 60 percent of Nestle’s
brands gaining market share around the world.
A more detailed look at the nine-month figures show that
Nestle saw sales fall across all areas and product groups compared with a year
ago.
In North America, the company’s biggest market, Nestle said
tough economic conditions and higher pricing weighed on demand, but new lines
like DiGiorno Pizza Combos, Lean Cuisine snacks, and Dreyer’s Smoothies helped
compensate.
PetCare and frozen pizza saw accelerated growth and market
share gains, the company said, and Coffee-mate had strong growth due to new
varieties of Cafe Collections and the launch of Coffee-mate Natural Bliss. It
said Nescafe also performed well.
In Europe, Nestle said its rollout of Nescafe Dolce Gusto
and Maggi Juicy Roasting helped make up for the tough environment. It said
France was a particular highlight but there was also good growth in Italy,
Switzerland and the Benelux countries. And despite the economic crisis, Greece,
Spain and Portugal did well too.
In August, the company posted a drop in half-year earnings,
blaming volatile markets, rising commodity prices and particularly the strength
of the Swiss franc for dragging down profits.
Analysts at Zuercher Kantonalbank said Thursday’s results
met their predictions and particularly welcomed the stronger-than-expected 12.6
percent sales growth at Nestle’s coffee and chocolate drinks unit.