Nestle SA Reg Shs. Ser. B Spons (ADR)(OTCMKTS:NSRGY) reported a good organic growth in Latin America. It was supported by pricing that was reflective of inflationary circumstances. The consumer sentiment was strong and markets outperformed in 4Q. All of the Brail segments posted growth.
Nestle reported double-digit growth in coffee. It can be largely attributed to sales of Nescafé Dolce Gusto. The other products including KitKat in confectionery, Nescau in Cocoa, Nesfit in biscuits, Ninho in growing-up milks and other contributed significantly in market’s performance. The changes announced in fiscal legislation in Mexico affected consumer sentiment. Nescafé Dolce Gusto and Carnation, Nido, and Nescafé 3in1 mixes were some of the leading growth drivers.
The other highlights
In Latin America, Petcare posted a broad-based growth. The segment has transformed into a meaningful-sized business for Nestle SA in the Latin America. Pro Plan and Dog Chow were most demanded products in Petcare segment. Nestle SA successfully introduced Revena natural dog food in Brazil. As per trading operating profit, the margin in zone surged by 60 basis points to 18.8%. The margin expansion was backed by several factors including lower restructuring costs and ongoing structural and operational gains in pricing. These factors were able to offset rise in input costs.
Performance in other zones
Talking about zone Asia, Africa, and Oceania, the management of Nestle SA said that it is evident that with organic growth of 2.6% in FY2014, laid by pricing, these zones have faced tougher challenges. The performances were particularly weak in Oceania and China. Also, the Middle easy failed to repeat the performance of last year. The emerging markets where Nestle SA performed well are Turkey, Africa, South Asia, the Philippines and Indochina region. The products that performed well in China market are Nestle Professional and Nestle waters. It is a part of infant nutrition.