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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  Nestlé S.A.    NESN   CH0038863350

NESTLÉ S.A.

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Nestle shrugs off COVID-19 impact thanks to pet food and health nutrition

10/21/2020 | 02:10pm EST
FILE PHOTO: Logo of Nestle is seen in Konolfingen

ZURICH (Reuters) - Nestle raised its guidance for 2020 organic sales growth to around 3% and reaffirmed its ambition to return to mid-single digit growth after strong demand for pet food, coffee and health products boosted quarterly growth.

Chief Executive Mark Schneider told analysts on a call the new full-year guidance was "cautious" after the world's biggest food group posted organic growth of 4.9% in the third quarter.

"It's very hard to predict where exactly COVID is going to turn next and what the measures are going to be in key markets for us," he said. "With COVID around us, you will see rollercoaster movements here in the numbers going forward."

Nestle had previously expected organic growth of 2-3% for this year.

Schneider said the company was working hard to reach its mid-term target of mid-single digit organic growth, initially set for this year. "I feel good about our ability to be there in a reasonable amount of time."

The maker of Nescafe coffee and Kitkat chocolate has weathered the pandemic better than some peers as its focus on high-growth categories helped offset a slump in food sales to restaurants and cafes.

In contrast, French peer Danone announced an extensive review this week that could lead to disposals after its like-for-like sales fell 2.5% in the third quarter.

Unilever is due to release a trading statement on Thursday.

LOCKDOWN BOOST

Shares in Nestle, up 2.5% so far this year, was down 0.2% at 1436 GMT, outperforming the food sector index which was 1.1% weaker.

Kepler Cheuvreux analyst Jon Cox said Nestle remained his preferred pick in food, while Vontobel's Jean-Philippe Bertschy called it a "must-have stock", set to emerge a winner from the pandemic.

Demand for food and drinks consumed at home remained strong during lockdowns, while sales of products consumed outside home and on the go - about 15% of Nestle's sales - fell 26.4% in the third quarter, Nestle said.

"The trend towards more in-home consumption, which favours us, I think, is here to stay, and that bodes well for next year," Schneider said.

To boost growth, Nestle wants to keep developing its portfolio, notably expanding its health science business recently bolstered by the $2 billion Aimmune Therapeutics acquisition. It intends to double the unit's sales to 4 billion Swiss francs ($4.42 billion) by 2021/2022 versus 2017 levels.

It has been ditching underperformers and put North American waters and its Chinese Yinlu peanut milk brand under strategic review.

While the Americas region posted the strongest growth rate, Asia was only slightly positive dragged down by China, where Nestle's out-of-home business, infant nutrition, Yinlu and its sweets brand Hsu Fu Chi are struggling.

($1 = 0.9044 Swiss francs)

(Reporting by Silke Koltrowitz, editing by John Revill and Emelia Sithole-Matarise)

By Silke Koltrowitz


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AIMMUNE THERAPEUTICS, INC. -0.29% 34.49 End-of-day quote.3.05%
DANONE S.A -3.16% 50.84 Real-time Quote.-28.96%
NESTLÉ S.A. -2.14% 101.46 Delayed Quote.-1.05%
UNILEVER N.V. -2.01% 48.66 Delayed Quote.-3.06%
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Financials
Sales 2020 84 945 M 93 072 M 93 072 M
Net income 2020 11 697 M 12 816 M 12 816 M
Net Debt 2020 30 184 M 33 071 M 33 071 M
P/E ratio 2020 25,0x
Yield 2020 2,69%
Capitalization 283 B 309 B 310 B
EV / Sales 2020 3,68x
EV / Sales 2021 3,65x
Nbr of Employees 291 000
Free-Float 93,5%
Chart NESTLÉ S.A.
Duration : Period :
Nestlé S.A. Technical Analysis Chart | NESN | CH0038863350 | MarketScreener
Technical analysis trends NESTLÉ S.A.
Short TermMid-TermLong Term
TrendsBearishBearishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 117,02 CHF
Last Close Price 101,46 CHF
Spread / Highest target 28,1%
Spread / Average Target 15,3%
Spread / Lowest Target -7,35%
EPS Revisions
Managers
NameTitle
Ulf Mark Schneider Chief Executive Officer & Director
Paul Bulcke Chairman
Magdi Batato Executive Vice President-Operations
François-Xavier Michel Marie Roger Chief Financial Officer & Executive Vice President
Stefan Palzer Chief Technology Officer
Sector and Competitors
1st jan.Capitalization (M$)
NESTLÉ S.A.-1.05%316 901
MONDELEZ INTERNATIONAL, INC.3.74%81 720
DANONE S.A-28.96%40 432
THE KRAFT HEINZ COMPANY1.46%39 442
GENERAL MILLS, INC.14.56%37 511
THE HERSHEY COMPANY0.54%30 759