20 June, 2008 - Nestle Nutrition doubled its sales between 2005-2007 to over CHF 10 billion (EUR 6.1 billion) thanks to a combination of organic growth and robust acquisition, investors were informed this week. In a bullish statement, the company said it expected the performance of the Nutrition division to spearhead Nestle's bid to become the world leader in its field of health and wellness, with sales from its infant nutrition segment alone estimated to rise to CHF 8 billion (EUR 4.9 billion) in 2008.
The Swiss-based company said organic sales within Nestle Nutrition had grown by CHF 1 billion (EUR 617 million) during the two-year period.
This healthy growth had been augmented by three successful strategic takeovers that had brought in a further CHF 4 billion (EUR 2.4 billion) into the company. Jenny Craig, a weight management company, had added CHF 0.5 billion (308.9 million) , Novartis Medical Nutrition a further CHF 1.2 billion (EUR 741 million) while The Gerber takeover had boosted sales by CHF 2.3 billion (EUR 1.4 billion).
By the end of 2007, Nestle Nutrition’s sales had soared to CHF 10.3 billion, with almost three quarters of revenue coming from infant nutrition.
At an Investors’ Seminar held at the firm’s Swiss base, Nestle chiefs said its 10/20 policy was on target – whereby the company aimed to deliver “sustainable organic” growth of 10% and EBIT of 20% or more.
Nestle has high expectation of the performance of it entire infant nutrition division in 2008 with sales rising to CHF 8 billion compared to under CHF 5 billion two years ago. – with strong growth expected across its infant formula and its infant meals and drinks more than trebling compared to 2006.
Infant Nutrition
The company explained the process of continuous “innovation/renovation” in the infant formula section of the firm had seen sales rise by CHF 800 from CHF 2.3 billion in 2000 to CHF 3.1 billion in 2007. Bosses predicted 2008 sales would increase year-on-year by a further CHF 400 million, reaching CHF 3.5 billion.
(All Sources: Nestle)
Gerber
Within this sector of the company, Nestle announced the integration of Gerber into was proceeding well, said Nestle with “early stabilisation” programmes complete and “fully operation implementation on track.
US sales growth had been maintained “despite a challenging economic environment”. Performance in other markets had been strong, said the company, with Mexico posting YTD sales growth of 20%, double-digit growth in Poland while Russia was “growing rapidly off a small base”.