Nestlé on track for another successful year

Nestlé has said it is confident about its long term prospects Keystone

The world's largest food group, Nestlé, says sales over the first nine months of the year increased 4.9 per cent over the same period last year.

The sales totalled SFr62.4 billion ($38.1 billion) for the period.

Nestlé also reported that it was considering a possible initial public offering of a minority stake in Alcon, its wholly-owned eye care business.

The group said real internal growth between January and September was 4.2 per cent, ahead of the four per cent trend target. Commenting on the result, Nestlé chief executive Peter Brabeck-Letmathe said: “I am pleased to report that Nestlé is on track to reach its real internal growth objective and close the year with higher sales and profits.”

In a statement, the company said its bottled water activities and Alcon continued their strong growth performance with near double digit increases in real internal growth.

Good news for emerging markets

Emerging markets in general continued to deliver growth above the group’s four per cent target and there was a good performance from many industrialised countries, the statement added.

Nestlé said it believed that an IPO would highlight the intrinsic value of Alcon for Nestlé shareholders and increase the financial flexibility of both Nestlé and Alcon.

Additionally, it would strengthen the AAA credit rating of Nestlé and allow for the further development of its core food, nutrition and beverage businesses, the company said.

“Alcon has grown to become the worldwide leader in eye care. Given the size and growth profile of the business, we believe that value can be enhanced for Nestlé’s shareholders and for Alcon by separating the two operations,” Brabeck said.

The company announced that if an offering were to take place, it would not be until next year at the earliest.

Schöller group deal

In another development, Nestlé said that negotiations to acquire Germany’s Schöller group had now been successfully completed. Under an agreement, Nestlé is to acquire 100 per cent of Schöller, which includes ice cream, frozen food and frozen bakery businesses.

Nestlé also reported that it was launching a corporate capital venture fund of up to SFr200 million, to be managed by an independent management team, in order to better access new science and technology opportunities.

Commenting on the outlook for the group, Nestlé said the nature of its business and its unmatched breadth of activities, geographically as well as product-wise, suggested that it was less subject to cyclical phenomena than many other business areas.

As a result an in combination with the group’s long-standing experience in handling difficult market conditions, Nestlé remains confident about the long-term prospects for the company, the statement said.

swissinfo with agencies