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Nestlé Q1 Sales Down 6.2%

Swiss food major Nestlé (NSRGY.PK,NSTR.L) reported that its first-quarter sales decreased 6.2% to 20.81 billion Swiss francs from 22.18 billion francs last year. Acquisitions net of divestitures reduced sales by 4.7%, foreign exchange reduced sales by 5.8%.

Organic sales growth was 4.3%, with RIG of 4.7%. Pricing temporarily decreased by 0.4%, mainly reflecting timing of promotions in North America. Organic growth was supported by strong momentum in the Americas and Zone EMENA.

The company has decided to explore strategic options, including a potential sale, for its Yinlu peanut milk and canned rice porridge businesses in China. However, the company will retain and develop its existing Nescafé ready-to-drink coffee business.

The company said it is still too early to assess the full impact of COVID-19. So it maintained its original full-year 2020 guidance for the time being. It expects continued improvement in organic sales growth and underlying trading operating profit margin. Underlying earnings per share in constant currency and capital efficiency are expected to increase.

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