Nestle: consumer demand to remain weak in 2014

GENEVA (AP) - Nestle, the world's biggest food and drinks maker, said Thursday it expects 2014 to be just as challenging as last year amid falling growth in emerging markets and weaker prices in Europe.

The maker of Nescafe, Perrier, Jenny Craig and Haagen Dazs is a major buyer of food commodities such as wheat, sugar, and milk and its results are a good indicator of the strength of consumer demand around the world.

Nestle's shares fell 1.49 percent to close at 66.10 Swiss francs on the Zurich exchange Thursday.

Nestle, based in Vevey, Switzerland, said that after a weak 2013, it expects an improvement only in the second half of 2014. Organic sales, which do not reflect acquisitions and currency fluctuations, are expected to grow about 5 percent next year.

Its net profit in 2013 fell to 10 billion francs ($11.1 billion), from 10.6 billion francs in 2012. In 2011, it made a profit of 9.5 billion Swiss francs.

"The macro-environment in 2013 was one of soft growth, minimal in the developed world and below recent levels in the emerging markets," CEO Paul Bulcke said. "Last year was challenging and 2014 will likely be the same."

He said this year would likely again see improvement "weighted to the second half." Nestle, like other food companies, is facing slowing demand in emerging markets and in Europe, where many customers are adjusting to government austerity measures.

In 2013, Nestle's overall sales grew by 2.7 percent to 92.2 billion francs, kept back by the impact of shifting foreign exchange rates. It said organic sales growth was 4.6 percent.

Nestle's aim every year for 5-6 percent organic growth and improvements in its trading operating profit margin, underlying earnings per share and capital efficiency.


(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Top Stories

  • Spy Gadgets
    A big collection of equipment that would make James Bond envious is on display in Seattle
ATTENTION COMMENTERS: We've changed our comments, but want to keep you in the conversation.
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.
comments powered by Disqus
Sign up for breaking news e-mail alerts from MyNorthwest.com
In the community
Do you know a student who stands out in the classroom, school and community?
Help make their dreams come true by nominating them for a $1,000 scholarship and a chance to earn a $10,000 Grand Prize. Brought to you by KIRO Radio and Comprehensive Wealth Management.

Do you know an exceptional citizen who has impacted and inspired others?
KIRO Radio and WSECU would like to recognize six oustanding citizens this year. Nominate them to be recognized and to receive a $2,000 charitable grant.