Nestlé: revenue in marked decline to 20.8 billion in the 1st quarter

The food giant Nestlé experienced a decline in turnover of 6.2% in the first three months of the year compared to 20.8 billion francs a year.

Real internal growth (RIG) of 4.7% was reduced to nil by the divestments of the dermatology and ice cream businesses in the United States, as well as by currency effects.

On a like-for-like basis, organic growth stood at 4.3%, said the interim report published on Friday.

Turnover is somewhat below the average projections of analysts consulted by AWP, despite indicators of adjusted growth exceeding expectations. The RIG was thus forecast at 2.2% and organic growth at 2.8%.

Renewed objectives

Nestlé is also examining various options – including a sale – for its Chinese subsidiary Yinlu, which focuses on peanut milk and canned rice porridge. The unit, which packages and distributes the Nescafé brand in the Middle Kingdom, generated revenue equivalent to 700 million francs last year. Nescafé will remain a property of Nestlé.

While waiting to be able to quantify the impact of the pandemic on the multinational’s activities, its management renews the roadmap initially established, including an unquantified pursuit of organic growth and recurring current operating margin.

Earnings per share excluding currency effects and return on capital must also increase.