Nestle sales growth eases as global economy cools

Swiss foods giant Nestle sees smaller rise in sales as pace of global economic growth slows

Associated Press
Nestle sales growth eases as global economy cools
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FILE - In this Feb. 19, 2010 file photo people are standing behind a Nestle logo during a press conference of the food and drinks giant Nestle in Vevey, Switzerland. Swiss food and drink giant Nestle SA on Thursday Oct. 18, 2012 posted an 11 percent increase in sales of dozens of its household name brand products for the first nine months of 2012. The world's biggest food and drink company's sales rose to 67.6 billion Swiss francs (US $73.3 billion) through September, up from 60.9 billion francs during the same period in 2011. With 11.7 percent growth in emerging markets and 2.4 percent growth in developed markets, the maker of Nescafe, Jenny Craig and Haagen-Dazs said in a statement issued before the opening of the Zurich exchange Thursday that it expects organic sales growth of 6.1 percent this year and 2.9 percent real internal growth. (AP Photo/Keystone, Dominic Favre, File)

GENEVA (AP) -- Nestle SA, the world's biggest food and drink company, on Thursday said its sales growth slowed to 11 percent in the first nine months of 2012 as demand eased both in developed economies and emerging markets, where high growth is starting to cool off.

The maker of Nescafe instant coffee, Jenny Craig weight loss products and Haagen-Dazs ice cream said sales rose to 67.6 billion Swiss francs ($73.3 billion) through September, up from 60.9 billion francs in the same period last year.

With 11.7 percent growth in emerging markets and 2.4 percent growth in developed markets, the company, based in Vevey, Switzerland, said it expects organic sales - which exclude products of newly-acquired businesses - to grow 6.1 percent this year.

That is a slowdown in growth from the first six months of the year, when sales grew 12.9 percent in emerging markets and 2.6 percent in developed markets. Organic growth in sales was 6.6 percent.

Thursday's figures sent shares in the company slumping soon after the Zurich exchange opened. They closed down by 1.69 percent at 61.20 francs ($66.31), but are still up 13 percent since the start of the year.

The company said it kept up strong growth but at a slower pace because of a global economy that has been weighed down by Europe's chronic debt crisis and sluggish American growth. It also maintained its full-year outlook, despite the tough trading conditions.

"We grew in the intensely competitive developed markets in spite of a general economic malaise and low levels of consumer confidence," said Nestle Chief Executive Paul Bulcke.

He said the success in less-developed markets is due to the company "expanding our routes to market and enhancing our product offerings".

With that success and lowered costs for its raw materials, he added that Nestle's "continued momentum in real internal growth, combined with some easing of input cost pressures, allows us to confirm our full-year outlook."

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