Nestle to post strong organic growth in 2008
March 13, 2008
by FoodBusinessNews.net Staff
VEVEY, SWITZERLAND — Nestle S.A. has announced full-year organic growth for 2008 will be close to 2007 levels and well above the long-term goal of 5% to 6% growth.
"The group’s organic growth is off to a very strong start in 2008," said Peter Brabeck-Letmathe, chairman and chief executive officer. "This demonstrates the benefits of Nestle’s strategic reorientation to nutrition, health and wellness, reflected in the strong underlying momentum in our business, but also our strategy to respond immediately to exceptional cost evolutions in the commodity markets. We expect our raw material cost pressures to abate somewhat in the course of the year and foresee price increases to trend lower in the second half of 2008, resulting in a full-year organic growth rate close to the level reached in 2007, clearly above our long-term target."
Nestle posted organic growth of 7.4% in 2007.
Pricing actions taken at the end of 2007 have contributed to a strong pricing element in organic growth so far in 2008. In addition, the company sped up its internal growth momentum and had a successful early Easter season and an additional sales day in February. This has resulted in very strong organic growth during the first two months of 2008 to be reflected in first-quarter sales results.
The company said it expects an improvement in the EIBT margin and in constant currencies during full-year 2008.
"The Nestlé model, combined with our ongoing ambitious share buy-back program, will deliver strong earnings per share growth, resulting in industry-outperforming, long-term shareholder value creation," Mr. Brabeck-Letmathe said.