just On Call - Nestle eyes improvements in North America business
Nestle said the the North America business continued to be price disadvantaged in the nine-month period
Nestle has said that it is seeing improving momentum in its North America business, despite competition in the region hitting nine-month sales at its waters division.
Nestle Waters this morning (20 October) reported an 11.8% slide in nine-month sales to CHF5.08bn (US$5.64bn). The Perrier water producer said its brands had come under price pressure from competitors during the period in North America.
Speaking on the firm's interim call this morning, Nestle's head of investor relations, Roddy Child-Villiers, said the the North America business introduced price increases in the second quarter, which impacted both volumes and shares.
However, he added: "We continue to see good growth for Perrier and S. Pellegrino in the US. We have also now seen a few improving quarters of momentum in the US, in particular with our home and office delivery business, which is benefiting from an improved value proposition with Nestle Pure Life."
In addition, Child-Villiers said the waters division had performed well in Europe.
"The European water market continued to perform well, in a subdued market, gaining share in all regions," he said. "The emerging market business continued to deliver double-digit growth, and international brands were key, with Hépar, Vittel, Perrier and S.Pellegrino all performing well."
Separately, Child-Villiers said that currencies and rising commodity costs remained a major headwind on its reported numbers.
Nonetheless, he reiterated that Nestle expects to "slightly over-perform" against its long-term organic growth range of 5% to 6% for the full year.
"We continue to strive for improvement in constant currencies," he said. "There is no question that consumer sentiment has turned down in Europe, and has turned down in the US. Equally the emerging market currencies are weaker than the US dollar and Swiss Franc, so I think our guidance ... is about being sensitive to the environment we are in."
Nestle's share price was down 0.19% to CHF51.45 at 1408 BST today.
To listen to Nestle's conference call, click here.
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