Nestlé Q1: Pandemic-fueled at-home coffee sales drive stellar results

KEY POINTS:

• Organic growth reached 7.7%, with real internal growth (RIG) of 6.4% and pricing of 1.2%. Growth was broad-based across most geographies, supported by early signs of recovery from out-of-home channels, improved pricing and market share gains.
• Foreign exchange reduced sales by 5.3% due to the continued appreciation of the Swiss franc against most currencies. Net divestitures had a negative impact of 1.0%. As a result, total reported sales increased by 1.3% to CHF 21.1 billion (3M-2020: CHF 20.8 billion).
• Portfolio management on track. The sale of Nestlé's regional spring water brands, purified water business and beverage delivery service in the U.S. and Canada was completed on March 31, 2021. The acquisition of Essentia Water was completed on March 5, 2021.
• Full-year 2021 outlook confirmed: continued increase in organic sales growth towards a mid single-digit rate. Underlying trading operating profit margin with continued moderate improvement. Underlying earnings per share in constant currency and capital efficiency expected to increase.

Nestlé said most product categories delivered strong organic growth. Coffee was the largest contributor to growth, fueled by strong demand for Nespresso, Nescafé and Starbucks products. Dairy grew at a double-digit rate, based on elevated demand for home-baking products and fortified milks. 

The food giant confirmed organic sales should grow more than 3.6% this year after strong demand for coffee, dairy and petcare products boosted growth in the first quarter.

Click here to Nestlé's full report.