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Nestle, the food giant whose brands include Nespresso coffee and Perrier water, saw first-quarter sales figures slump due to the strong value of the Swiss franc and a baby formula recall, but sales volumes overall edged higher.<\/p>\n
The maker of Purina dog food, Maggi bouillon cubes, Gerber baby food and Nesquik chocolate-flavoured drinks has struggled with flagging consumer demand in key markets in recent years.<\/p>\n
Nestle shook up its management last year and laid off six percent of its staff.<\/p>\n
For the first three months of the year the company reported sales of 21.3 billion Swiss francs ($24.9 billion), a drop of 5.7 percent from the period last year.<\/p>\n
The franc has appreciated considerably as investors seek a safe haven amid global uncertainty, resulting a 9.3 percentage point drag on Nestle’s sales when it converts international earnings into the Swiss currency.<\/p>\n
Excluding currency impacts and changes in business operations, known as organic sales, revenues were up by 3.5 percent.<\/p>\n
The results beat expectations of 2.5 percent organic sales growth to 21.2 billion Swiss francs, according to analysts surveyed by Swiss financial news agency AWP.<\/p>\n
Nestle’s management has been targeting another indicator, real internal growth (RIG), which reflects sales volumes.<\/p>\n
This rose by 1.2 percent in the first quarter, surpassing the 0.2 percent expected by analysts.<\/p>\n
“Our first-quarter performance demonstrates that our RIG-led growth strategy is delivering,” said Nestle’s new chief executive, Philipp Navratil.<\/p>\n
The company’s shares rose six percent, far outpacing the Swiss market that rose one percent overall.<\/p>\n
“Nestle is showing early signs of re\u2011igniting volume growth,” said analysts at Vontobel.<\/p>\n