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Nestle expects sales to grow this year

Reuters with CNBC.com
Key Points
  • Nestle expects organic sales to rise in 2019 after an improving performance in China and North America helped growth accelerate last year.
  • Chief Executive Mark Schneider is trying to bring the firm back up to speed by improving efficiency and focusing on growth categories.
  • Schneider told CNBC on Thursday that he felt positive about meeting the company's 2020 margin target.
Nestle chocolate products are displayed on the shelves of a Kroger supermarket in Decatur, Georgia.
Getty Images

Nestle said it expected its organic sales to rise this year after an improving performance in China and North America helped growth accelerate in 2018 after six years of slowdowns.

Demand for packaged foods has suffered from a trend towards healthier eating, and Nestle Chief Executive Mark Schneider is trying to bring the world's biggest food group back up to speed by improving efficiency and focusing on growth categories.

Organic sales grew 3.0 percent in the full year, accelerating to 3.7 percent in the final quarter, and net profit jumped 42 percent to 10.1 billion Swiss francs ($10.02 billion) benefiting from one-off items, the maker of Kitkat chocolate bars and Nespresso portioned coffee said in a statement on Thursday.

Speaking to CNBC's Julianna Tatelbaum on Thursday, Schneider said Nestle's growth was driven by its nutrition business as well as strong performance in the U.S. and China.

"We've seen slowing GDP (in China), but that has not translated into slowing consumer interest," he said. "We've seen very solid progress coming out of 2017 and 2018 so I think there's generally a lot of confidence in the market that we'll make that (2020) target."

VIDEO3:5703:57
Nestle CEO confident firm will hit 2020 margin target

Schneider added that Nestle was focusing on a review of its structural costs, which was being done in a way that would protect organic growth. He also told CNBC that the company expected a pricing increase of more than 0.5 percent in 2019.

"What we're seeing – especially after our retreat from the U.S. – is that we have put a whole lot of effort into rejuvenating our product program and that's clearly paying off. And so no matter what the overall market growth numbers are, I think we are back to gaining share in key markets and across some key confectionery subcategories, and that gives me good hope for 2019 and beyond."

"We have no plans for further portfolio adjustments in confectionery, we want to win in confectionery," he added.