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| Nestle sales growth hits seven-year low, hit by China slowdown | Nestle sales growth hits seven-year low, hit by China slowdown |
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| Nestle, the world’s biggest food company, said deflation and a slowdown in China led to its weakest first-half sales growth in seven years. | Nestle, the world’s biggest food company, said deflation and a slowdown in China led to its weakest first-half sales growth in seven years. |
| The maker of hundreds of household name brands including Kit-kat and Cheerios warned of Brexit-induced price hikes in the UK as the pound remains in a relative slump after the 23 June vote. | The maker of hundreds of household name brands including Kit-kat and Cheerios warned of Brexit-induced price hikes in the UK as the pound remains in a relative slump after the 23 June vote. |
| “I’m confident we hit the bottom in the second quarter,” Francois-Xavier Roger, chief financial officer, said on Thursday. Nestle is “well-positioned” to reach its full-year forecast, he said. | “I’m confident we hit the bottom in the second quarter,” Francois-Xavier Roger, chief financial officer, said on Thursday. Nestle is “well-positioned” to reach its full-year forecast, he said. |
| Revenue increased 3.5 per cent on an organic basis in the first half, missing analysts’ expectations of 3.7 per cent growth. Nestle needs growth of about 5 per cent for the Swiss company to reach its full-year target of growth near last year’s level, which was 4.2 per cent, the CFO said. | Revenue increased 3.5 per cent on an organic basis in the first half, missing analysts’ expectations of 3.7 per cent growth. Nestle needs growth of about 5 per cent for the Swiss company to reach its full-year target of growth near last year’s level, which was 4.2 per cent, the CFO said. |
| While deflation will remain in western Europe, the outlook for other markets is better as some commodity prices have been increasing lately, according to Roger. | While deflation will remain in western Europe, the outlook for other markets is better as some commodity prices have been increasing lately, according to Roger. |
| Nestle has been raising prices in Brazil and Russia ahead of planned increases in the UK. | Nestle has been raising prices in Brazil and Russia ahead of planned increases in the UK. |
| Its stock rose as much as 1.3 per cent to 79.40 Swiss francs, approaching a record after initially declining in early trading in Zurich. | Its stock rose as much as 1.3 per cent to 79.40 Swiss francs, approaching a record after initially declining in early trading in Zurich. |
| Paul Bulcke, Nestle’s outgoing chief executive officer, is on track to report sales growth below his average long-term target rate for a fourth year. Earlier this year, Nestle announced it didn’t expect sales growth to meet that goal, which is 5 per cent to 6 per cent. | Paul Bulcke, Nestle’s outgoing chief executive officer, is on track to report sales growth below his average long-term target rate for a fourth year. Earlier this year, Nestle announced it didn’t expect sales growth to meet that goal, which is 5 per cent to 6 per cent. |
| In June, Nestle appointed Fresenius’s Ulf Mark Schneider as successor to Bulcke. He’s joining next month and will take the CEO role on 1 January. Schneider’s background is in the medical industry, supporting Nestle’s shift towards nutrition and health in a quest for faster growth. | In June, Nestle appointed Fresenius’s Ulf Mark Schneider as successor to Bulcke. He’s joining next month and will take the CEO role on 1 January. Schneider’s background is in the medical industry, supporting Nestle’s shift towards nutrition and health in a quest for faster growth. |
| Faced with more demanding consumers asking for fresh, healthy products, makers of packaged foods are reformulating recipes, cutting sugar, salt and fat. But Nestle are instead seeking solace in higher-margin “premium” products and health foods. | Faced with more demanding consumers asking for fresh, healthy products, makers of packaged foods are reformulating recipes, cutting sugar, salt and fat. But Nestle are instead seeking solace in higher-margin “premium” products and health foods. |
| Kraft Heinz this month reported a 4.7 percent drop in second-quarter net sales and said it would try to improve the quality of its products to win over increasingly health-conscious customers. | Kraft Heinz this month reported a 4.7 percent drop in second-quarter net sales and said it would try to improve the quality of its products to win over increasingly health-conscious customers. |
| To accelerate its push into high-margin health foods, Nestle recruited their new CEO from German healthcare group Fresenius, its first external hire in nearly a century. | To accelerate its push into high-margin health foods, Nestle recruited their new CEO from German healthcare group Fresenius, its first external hire in nearly a century. |
| © Bloomberg | © Bloomberg |