Nestle kept its annual sales growth forecast after third-quarter organic sales rose 4%, helped by stronger volumes and demand across emerging markets, the company's chief executive said.
The company still expects annual organic growth of 3% to 4%. Its chief executive said the improvement extended across regions and businesses, although consumers remained cautious in the United States and growth remained subdued in China.
The remarks came in an interview on CNBC International's Squawk Box Europe, published Oct. 22. They set out the company's assessment of its performance and turnaround efforts.
Nestle's real internal growth, a measure of sales growth from volumes and changes in product mix, reached 2.8%. The chief executive linked that increase to more consumption of its products and better execution, including faster product launches and better marketing.
“This is more consumers eating more Nestle and drinking more Nestle products,” he said.
Emerging markets drove growth throughout the year. China remained difficult, with subdued demand in the categories where Nestle competes, although the chief executive said the company had completed its business turnaround there.
He expected growth in China to remain in the low single digits. Elsewhere, he cited Asia, Africa, Oceania and Latin America, including Brazil and Mexico, as sources of stronger growth driven by volumes.
In the United States, sales to retailers and sales to consumers were broadly aligned. Consumers still sought value and faced stretched budgets toward the end of the month, requiring products at suitable prices.
Price increases were easing as increases in input costs slowed. The company was offering different brands and price points to suit household budgets, applying an approach developed in emerging markets more widely.
Nestle kept its annual margin guidance unchanged. The chief executive declined to give a margin forecast for 2027 and said the company would seek savings before passing costs to consumers.
The company removed its Russian business from its consolidated accounts as of Sept. 30. He declined further comment, leaving the financial and margin effects unaddressed in the interview.
Nestle's medium-term ambition remains consistent organic growth of 4%, with half coming from real internal growth, and a margin approaching 17%. Portfolio changes were intended to support those goals.
The chief executive left open the possibility of acquisitions but had no specific transaction to announce. He said the company would periodically review its businesses and make changes where needed.
Nestle's marketing strategy focuses spending on fewer brands and larger partnerships. Its NBA relationship covers 21 markets, combining a global agreement with local campaigns. The chief executive said that approach made spending more efficient than separate deals in each market.
