Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on NESTLE SA-REG. We currently have 7 research reports from 2 professional analysts.
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Q3 disappoints, FY guidance adjusted downwards
20 Oct 16
Nestle’s 9M update: sales grew organically +3.3% (cons. +3.6%, Q3: +2.9% – a very weak quarter) with real internal growth (RIG) up 2.5% and pricing 0.8%. On reported figures, sales were up +1%. OG by division: the Americas +4.5% (cons. +4.7%, both price and RIG driven), EMENA +2.2% (cons. +2.5%, RIG driven, negative pricing), AOA 2.8% (cons. +2.9%, RIG driven), Waters +4.2% (cons. +3.9%, RIG driven, negative pricing), Nestle Nutrition +1.3% (cons. +1%, RIG driven), Other Businesses +4.6% (cons. 4.7%, RIG driven). In Q3, the Americas and EMENA performed more softly than in Q2; other divisions improved their performance. Emerging markets slowed to 5.1% OG; developed markets remain unchanged. For the FY, Nestle expects organic top-line growth of c. 3.5% (down from around 4%) with an in margins at constant FX and including restructuring charges.
Q2 with weak OG but better margins, expects acceleration in H2
18 Aug 16
Nestlé’s H1 update: organic revenue was up +3.5% (cons. +3.7%, Q2: 3.1%) with RIG +2.8% and pricing of +0.6%. Reported figures were up 0.7% (FX:-2%, net acquisitions: -0.8%). OG by division: the Americas +5.1% (cons. +4%, both price and RIG driven), EMENA +2.6% (cons. +2.9%, RIG driven, negative pricing), AOA 2.3% (cons. +2.1%, RIG driven, negative pricing), Waters +4.2% (cons. 5.4%, RIG driven, negative pricing), Nestle Nutrition +1.3% (cons. +2.8%, RIG driven), Other Businesses +4.2% (cons. 5.1%, RIG driven). Developed markets recorded OG of +1.9% whereas emerging markets grew +5.4%. The trading operating margin for period was up +30bp (cons. +20bp) on the back of an improvement in cost and portfolio management, premiumisation and input tailwinds. All divisions improved their margins with the exception of the Americas. The group maintains its FY guidance: organic growth in line with 2015 (4.2%) with improvements in margins and EPS at constant currencies.
A decent Q1
14 Apr 16
Nestlé released its Q1 trading update. The OG stood at 3.9% (cons. +3.6%) driven strongly by real internal growth (RIG) of 3% whereas pricing stood at 0.9%. The negative FX headwinds were 2.8%. Net acquisitions stood at -1%. OG by division: the Americas +5.5% (cons. +4.2%, price and RIG driven), EMENA +3% (cons. +1.8%, RIG driven), AOA 2.3% (cons. +2.4%, RIG driven), Waters +5.3% (cons. 5.2%, RIG driven), Nestle Nutrition +2.6% (cons. +3.4%, RIG driven), Other Businesses +5.2% (cons. 5%). The developed markets grew 2.5% organically (driven uniquely by +2.9% RIG with some negative pricing). Emerging markets grew +5.6% (both RIG and price driven). The group confirmed its FY outlook (organic growth in line with 2015 with improvements in margins and EPS at constant currencies).
Disappointing FY and bearish guidance
18 Feb 16
Nestle released its FY results. Revenue grew organically by 4.2% (in line with consensus, RIG: +2.2% and pricing: +2%). On reported figures, sales were down 3.1% (FX: -7.4%). Net acquisitions stood at 0.1%. Sales OG by zone: AMS +5.5%, EMENA +3.7%, AOA +0.5%, Nestle Waters: +6.7%, Nestle Nutrition +3.1% and Others +5.3%. The operating margin was up 10bp on organic basis and down 20bp (15.1%) on a reported basis due to the strong Swiss franc. Net profit was down to CHF9.1bn due to the lower income from JVs as well as other operating expenses linked to rebate adjustments in Nestlé Skin Health in the US. The proposed dividend is CHF2.25. In Q4, sales grew organically by 4.2% (with RIG: +2.8% and pricing: 1.4%). Q4 OG by zone: AMS +4.6%, EMENA +2.5%, AOA +3.5%, Nestle Waters: +6.4%, Nestle Nutrition +2.2% and Others +4.7%. For 2016, Nestle expects a similar trading environment to FY15's with even softer pricing. The group expects to deliver organic growth in line with 2015 with improvements in margins and EPS at constant currencies.
Nestlé publishes disappointing Q3 numbers and lowers and its FY guidance
16 Oct 15
Nestle released its 9M trading statement. Organic growth stood at 4.2% (cons. at 4.7%, 3.6% in Q3) with pricing at 2.2% and RIG at 2% (cons. at 2.1%). FX impacted by -6.7% whereas net acquisitions added 0.4% to sales. On a reported basis, sales were down -2.1% for 9M and -5.7% in Q3. Organic growth by operating segment in Q3: Zone AMS +7%, Zone EMENA +4.7%, Zone AOA -3.1%, Nestlé Waters +9.8%, Nestlé Nutrition +2.4% (tough comparable coupled with slightly lower growth on a global basis) and Other (Nestlé professional, Nespresso, Nestlé Skin Science & health) +0.3%. The weaker than expected results are linked to AOA's poor performance in Q3 (withdrawal of Maggie Noodles and slower pace of recovery in China) as well as a one-off charge linked to a more conservative approach to the Nestlé Skin Health prescription drug rebate policy in the US. The company revised downward its full-year guidance to 4.5% OG (around 5% previously vs. 4.5% in FY14).
Panmure Research - Consumer Staples 11-09-15
11 Sep 15
The consumer staples sector continues to trade on well above average historic and market average multiples despite a lack of earnings growth over 2014-15. This has been due to being perceived as ‘low risk' and cash generative with the ability to continue to pay and grow dividends. However cashflow cover of dividends has declined, and a further round of emerging market currency devaluations could have a severe impact on the ability to grow dividends unless they can grow earnings in the developed world. In the short term the performance of the sector is likely to be overshadowed by the potential interest rate increase in the US. We would have an in-line weighting in the UK consumer staples sector. Within that we remain positive on the tobacco subsector and Hilton Foods Group and retain the Sell rating on Associated British Foods. We move PZ Cussons from Sell to Hold
Increasing price target from 815p to 835p
08 Dec 16
Following our 2 November 2016 note “The valuation genie is out of the bottle”, a great deal of new information has been disclosed about MPE (particularly on the non-core assets), while the company has re-based the dividend, announced a special dividend and announced the sale of major associate PT Agro Muko for US$100m. We now take all this new information into account and update our forecasts accordingly. As a result, we are increasing our price target from 815p/share to 835p/share.
New packing facility; Highly significant for underpinning future growth
06 Dec 16
HFG has announced plans to expand its packing capability in Australia, by constructing (at an expected investment cost of A$115m financed through bank facilities) a new meat processing facility in Queensland, in order to supply Woolworths, the leading grocery retailer in Australia. This is a highly significant development as the new Queensland plant, alongside HFG’s two existing dedicated retail packed meat facilities in Melbourne and Bunbury (both operated as a joint venture with Woolworths) should mean that HFG supplies the bulk of Woolworth’s c.1,000 stores with their red meat needs over time. In short, this development should underpin growth at HFG for many years to come from 2020 onwards, which, in turn, should result in a higher and more stable earnings stream over time, supporting a continued rerating of HFG’s valuation multiple, in our view. We reiterate our BUY.
06 Dec 16
600 Group* (SIXH): Interim results: order book showing signs of improvement (CORP) | Real Good Food* (RGD): Commodity volatility impacts numbers (CORP) | Minds + Machines* (MMX): .vip goes live in China (CORP | Imaginatik* (IMTK): Interims (CORP) | iomart* (IOM): Quality business as usual (CORP) | Fulcrum (FCRM): Upgrades continue (BUY)
Using their loaf
30 Nov 16
Finsbury Foods has been transformed by a series of acquisitions that has contributed to revenue and earnings nearly doubling over the last three years. Record levels of capital investment continue to improve the Group’s competitive position, whilst exposure to growth segments of the food market is helping likefor-likes. Profit growth is expected to slow in the current year in the absence of acquisitions but underlying trading remains resilient despite some cost headwinds, whilst debt reduction is accelerating. The rating is undemanding and the recent share price weakness has created a buying opportunity.
Small Cap Breakfast
07 Dec 16
Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December. ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m. RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m