Hello, everyone, and welcome to our 3 month sales conference call and webcast. For those of you whom I haven't met, I'm Stefan Kinder, the Head of Investor Relations. I will now present Nestle's 3 month sales results followed by Q and A. Now let's go. I will take the Safe Harbor statement as read and move straight into the numbers.
Our 3 month sales growth was in line with expectations and driven by both real internal growth and pricing. We achieved sales of CHF 20.9 billion. That is up 0.5% versus the same period last year. Organic growth was 4.4%. Real internal growth was 1.9%.
We delivered good results in Zone M and R, Nestle Watches and the other businesses. We are continuing to make progress in restoring momentum to Zone AOA and North America. We confirm our full year outlook. We aim to achieve organic growth of around 5% with improvements in margins, underlying earnings share in constant currencies and capital efficiency. Now let's see the details.
Here we summarize the performance in our 3 geographies. Geographies. This includes our zone managed sales as well as our globally managed businesses. As you know, on January 1, we reorganized our zones, taking the Maghreb, the Northeast Africa region, Middle East region, Turkey and Israel into Zone Europe to Fonzone M and A. Organic growth was 5.6% in the Americas, 4.5% in M and R and 2.2% in AOA.
Real internal growth was 2% in the Americas, 3.4% in M and A and minus 0.1% in AOA. While we continue to have broad based organic growth in all geographies, our rig reflects particular challenges in certain markets. I will explain in more detail in the coming slides as we discuss the zones and globally managed businesses. Now let's look at the split of our sales from another perspective. The developed markets contributed 55% of the group sales and emerging markets 45%.
Our organic growth in the developed markets was 2.5% in the 1st 3 months of the year. This acceleration reflects our ability to sustain growth in mature markets despite the weak macroeconomic environment. We have done this through innovation, premiumization and making choices to optimize our portfolio. The emerging markets, on the other hand, show a deceleration in organic growth to 6.7%. This reflects the challenges in a number of markets.
We continue to feel the slowdown in China, and the 1st 3 months were also affected by Brazil, Sub Saharan Africa and certain countries in the Middle East. Now let's look in more detail at our zones and globally managed businesses. Starting with Zone Americas. We delivered sales of CHF 5,800,000,000 organic growth of 3.7% and real internal growth of minus 0.2%. Here our growth was mainly impacted by the subdued U.
S. Business as expected and also by a slowdown in Brazil. For the U. S. Market overall, low wage growth is affecting consumer recently.
While lean cuisine and pizza remain challenged, our Stouffer's line showed some positive signs. At our last earnings call, we gave details on the actions we would take to relaunch FROZEN and we explained this would be an ongoing process. We have taken steps to reposition the brands, addressing all elements of the marketing mix to enhance their relevance to consumers. And I look forward to sharing our progress with you in future updates. Looking at the rest of North American business, we continue to see good growth in our creamers category.
Coffee Mate maintained its positive momentum, supported by the launch of a portable version, Coffee made deliver for super premium and snacks contributed. Baking also did well driven by innovations in Toll House morsels and frozen cookie dough. Pet Care contributed positively despite tough comparisons. Our innovations and line extensions in Purina 1 and Tidy Cats Litter did well. In the natural segment, our Beyond line also continues to be a growth driver.
Moving on to Latin America. While there was good organic growth, the worsening macroeconomic environment affected the zone's overall performance. Brazil had a slow start to the year, given the slowing economy and low consumer sentiment. Ambient dairy had a challenging 1st 3 months. Positive highlights were confectionery with strong performances from KitKat and from biscuits with NesFit.
Mexico, our other key market in Latin America did well with good broad based performance in most categories. Nest Coffee soluble coffee performed very well. Coffee made had very strong growth and confectionery did well contributing to the market's overall momentum. The divestiture of chilled dairy in 2014 had a positive effect as will have the very recent divestiture of ice cream. Other markets that did well in Latin America were Chile, Colombia, Ecuador and the Caribbean.
Nestle Purina Pet Care Latin America continued with strong broad based growth supported by all markets of the region. Key brands Proplan, Dark Chao and Cat Chao all had strong performances. And finally, Nescafe Dolce Gusto continues with very good growth across Latin America. Next is Zone M and A, which as mentioned earlier includes Europe plus now the Middle East, Turkey, Israel and North Africa. The sales were CHF 3,900,000,000 and growth was solid both organically at 5.3 percent and in terms of rig at 3.9%.
Pricing was taken both in response to currency depreciation as well as in coffee and confectionery in many markets in Europe. Consumer sentiment in the zone appears to be modestly improving. I want to emphasize that all regions contributed positively to the zone's growth: Western Europe, Eastern Europe and Middle East and North Africa. Across Europe, pet care was a growth driver with FELIX, Parena 1 and Gourmet. Nescafe Dolgi Gusto grew well across the zone and continues to drive a positive momentum in many of the key markets.
Frozen Pizza sustained its strong contribution supported by successful innovations in our strong brands, Bouygues Tony and Wagner. Ambient culinary and confectionery were also good, both helped by the early Easter. In general, most of our Western European markets did well. Switzerland and Greece were more challenged. The U.
K. Showed improvement, making a positive contribution to the zone's growth. In Central and Eastern Europe, we saw good performances. In Russia, we were able to deliver good growth despite a turbulent economic environment. We adapted our prices while maintaining share.
Ukraine also did well despite the challenges there and also delivered good real internal growth. And finally, in the Middle East and North Africa, there was solid growth across the region, often in challenging environments. Coffee, culinary and confections did well. Sales in Turkey driven by soluble coffee are progressing strongly when pricing has been taken due to inflationary pressures. The challenging environments in Iraq and Yemen were compensated by the good overall growth in the Middle East.
Now turning to AOA. You will recall from the full year announcement, the drag in AOA for the last 3 months of 2014 was negative. The start of 2015 was broadly similar in line with our expectations. The main challenges were in China and also Sub Saharan Africa. In China, we continue to be affected by Yinlu's low performance.
Wafers in confectionery and coffee also remain Sufuchi showed improvement helped by the comparisons from last year and ready to drink coffee achieved strong growth. We did say that the actions taken to rebuild the business in China will take time. We are on track, renovating the portfolio, improving our communication and distribution. As one example, Yinlu recently launched a premium protein drink, Chun, which brings value to the consumers through its focus on nutrition. Sub Saharan Africa was the other region where we had particular challenge, mainly in the oil dependent economies of Nigeria and Angola.
There were severe economic and political disturbances, including elections, falling oil prices and instability in the north of Nigeria, all contributing to a slowdown. In the other AOA markets, our premium businesses grew well. Our coffee brands were highlights in with KitKat Rubies and Nescafe 3 in 1 Blend and Brew. KitKat Rubies and Nescafe 3 in 1 Blend and Brew. BARE brand milks were a highlight in Indonesia and premium noodles in South Asia and Malaysia Singapore also did well.
In our developed markets, Japan continued a solid growth. This is an excellent example prior year and ready to drink coffees are also doing well. This good performance inspired this is a good performance in spite of difficult comparisons and a sales tax increase implemented in April of last year. And finally, our business in Oceania stabilized, helped by good performance in confectionery. This market continues to feel the pressure of a very difficult trade environment.
Moving on now to Nestle Waters gives me a queue. Moving on now to our globally managed businesses starting with Nestle Waters. The growth for the quarter was broad based, helped by continued investment in our brands and positive category momentum. Sales were CHF 1,700,000,000 with organic growth of 7.3% and RIG of 7.5%. All three geographies contributed to the business' very good performance.
In the developed markets, we had mid single digit growth in both North America and Western Europe despite strong competition. The premium international brands Perrier and San Pellegrino continued their strong growth momentum in North America and France. And the local U. K. Brand Buxton also did well.
In the emerging markets, we achieved double digit growth led by our local brands Ericley in Turkey, Almanal in the Middle East and Yunan Shan Quan in China. I hope I pronounced that right. Nestle Pure Life continued to be a growth engine with strong acceleration, particularly in North America, U. K, Brazil and certain AOA markets. Looking now at Nestle Nutrition.
With 4.3% organic growth and 1.3% RIG, Nestle Nutrition had a slow start into 2015 with tough comparisons mainly in the more volatile markets in the Middle East, Africa and Russia. Wise infant nutrition continued to deliver solid growth in infant formula and growing up milk driven by premium brands Eluma and S26. In China, our geographic expansion into smaller cities is on track, helping us achieve better distribution and higher brand awareness. The developed markets started the year with a positive contribution helped by Western Europe and the impact from portfolio rationalization. In the U.
S, pouches and cereals were a highlight. Sales continue to be affected by the decision to participate only in selective WIC contracts in the United States. Emerging markets remained a source of growth, but at a slower rate compared to prior years, again due to difficult comparisons. We saw good performances in Asia and Mexico in particular. As well as the continued positive momentum for infant serials in the U.
S, there was also strong performance in Southeast Asia. And finally, our organic fruit puree pouch line was a highlight for the meals and drinks category. Now let me move to our other businesses, which includes Nestle Professional, Nespresso, Nestle Health Science and Nestle Skin Health. Together, these businesses achieved CHF 3,300,000,000 organic growth of 8.1% and real internal growth of 5.9%. Neste Professional had a solid start to the year.
The growth was balanced across both the food and beverage businesses. Developed markets remained challenged due to difficult trading environments. Nestle Professionals' growth was driven by emerging markets in Asia, Latin America and Eastern Europe. Also, you will have seen our announcement on Daviejelle earlier this week. Nespresso continued to grow well in a competitive environment.
We are constantly leveraging our strengths by innovating our coffee offering, our machines and our services, helping to maintain our premium position in this category. For example, we introduced 3 decaffeinated corn with the same profile or aroma profiles as the 3 of the most preferred coffees of the permanent range. We also continue to increase our global presence through international expansion with 7 new boutiques opened so far in 2015. Nestle Health Science saw good sales growth in all three of its business areas: Consumer Care, Medical Nutrition and Novel Therapeutic Nutrition. Europe and AOA performed well.
Highlights we spoke about during our full year conference such as Vida Flow, Boost and Meritin continued to drive growth. Nestle Skin Health grew well throughout all businesses with strong performance in the Americas and Asia. Growth in the prescription business was helped by the U. The expansion in the U. S.
Launch of Benzaq for the treatment of acne. The U. S. Medical aesthetic business acquired last year contributed strongly and benefited from the launch of Restylane soap. This slide now highlights the performance across our product categories.
Our product categories. Starting with Powdered and Liquid Beverages. The slowdown in RIG was driven by several factors. Cocoa Beverages started the year with tough comparisons with sub Saharan Africa particularly affected. Our position as market leader in soluble coffee in many countries means we are often the 1st movers in terms of pricing.
In the 1st 3 months of this year, the pricing taken impacted our rig in some markets. We covered waters in the previous slide. Mid products and ice cream, they faced further challenges versus last year. The key reasons are the drivers I mentioned during our review of the zones. Yinlu remained slow in China.
Dairy in Brazil had a difficult start to slowing environment and the Middle East was affected by Iraq and Yemen. Ice cream had a slow start. However, please keep in mind that January through March is not necessarily indicative for Ice Cream's performance in a year. Nutrition and Health Science continue to benefit from the good performance of Nestle Health Science and Nestle Skin Health. Looking at prepared dishes and cooking aids, the improvement from prior year came from slightly better performance in Stouffers and good performance from pizza in Europe.
We also saw a strong start for ambient culinary sales in Maggi and chilled showed improvement in France and U. S. The growth in confectionery reflects both the Easter campaign and pricing taken in Latin America and Eastern Europe in response to inflation. RIG has been helped by strong KitKat performance and improvements in Sufuchi against easier comparisons. The successful launch of Le Resette de la Telier, which we spoke about during the last call, continues with its expansion into new markets.
Pet Care shows good organic growth. However, rig was affected by the factors we mentioned. Now that would wrap up our business review. Summary. In summary, I would describe organic growth of 4.4 percent for the 1st 3 months to be a solid start to 2015.
The growth is broad based coming from both emerging and developed markets despite some very different dynamics in the operating environment. The economic outlook in many of our markets remains challenging, but we will continue to focus on driving performance by doing the right things for the long term. We continue our full year outlook that is we aim to achieve organic growth of around 5% with improvements in margins, underlying earnings per share in constant currencies and capital efficiency. That brings us to the end of the presentation. We will now open the lines for Q and A.
Now let's take the first question. The first question is from John Cox at
The first one is really on that frozen category in North America. It seems to be that Stufers is sort of turning around and doing a bit better. I wonder if you could just give us a bit more color. You mentioned Lean Cuisine, but also maybe you could talk a little bit about Hot Pockets, DiGiorno and then the pizza business as well and how things are going in terms of the relaunch there? That's the first question.
2nd question just on confectionery. Just right at the tail end there, you talked about the expansion of the premium chocolate brand into other markets. Can you just give us some details there which markets you're moving into? Thank you.
Okay. So first on U. S. Frozen. Look there are complex dynamics in the U.
S. Food and business consumption also as illustrated yesterday by our Chairman at the AGM. And we said before, it's not an overnight fix. We are committed to fix the business. Reminder, frozen is a sizable category and it's important for us as well as for the retailers with the assets that have been invested into that category.
We have leading positions. And as we said before, we're looking at all elements of the marketing mix. We're making our products more relevant to the consumer. We're changing the product ingredients. We're changing the packets.
We're changing the communications. So we're really addressing all elements of the marketing mix. But again, I want to reiterate, it's a process throughout the year. So at the moment, it's really too early to say that the new measures we've been taking have had a large effect already now in the Q1. We're launching, for example, for lean cuisine that the products are hitting the shelves as we're speaking.
So we're going to to see the effects of that probably towards the middle of the year and especially in the second half. So we have seen a slight easing in reiterate that the improvements will really be seen in the second half. Now for premium confectioneries, your second question, it's we have a premium business already in Switzerland with Cahier and I talked about Le Resette de la Telier. That's really in the countries of Switzerland, France and we introduced it this year also in Spain. Okay.
So the next question is from Celine Panuti from JPMorgan. Good morning, Celine. Go ahead please.
All right. Good morning. My first question will be on China. I don't know whether you can share with us numbers on the country, but otherwise can you say sequentially whether China was better or worse versus Q4? And I would say China in the zone as well as the China total business, if you could comment on that?
And I think you had said that the destocking would still have an impact in Q1. Is that the case? And can we expect that that would be behind us then from Q2 onwards? So that would be my first question. My second question is on the milk's performance, which you highlighted had some impact from Brazil and I think Middle East.
But can you I mean, is it something that we should continue to see as subdue throughout the year? Or was there a specific impact of comp? Thank you for that.
All right. Let me start with China. China is a big market with many parts. And China as a market is still slightly positive. So in the geography to your question, it's slightly positive.
The challenge categories highlighted in the full year conference call were still difficult. They were not worse and we expect gradual recovery. Like Sufuchi improved, but due to easy comps as well. Inlu, shark wafers and coffee are still slow and everything we said at the full year earnings call is still very relevant here. On the other hand, RTD had a very strong growth.
In the geography, among the globally managed businesses, we had good growth in infant. We had an acceleration in water, Nestle Health Science and we had good growth in skin health. So the actions were taken to reconnect with the consumer. I gave an example before on Linglu. They're now also being rolled out and we're going to see progress as we move through the year.
Destocking, we're really your question on destocking, we're really coming to the tail end of that process right now. For milks, I would like Now, ambient dairy is slow in the large markets China, Brazil and Middle East. And these are the 3 markets I also talked about in my speech. As far as ice cream is concerned, I would say that the 1st 3 months of the years are not necessarily indicative for what's going to happen in the latter part of the year. And then lastly, creamers, is coffee made and that is doing well.
That is in North America, that is growing year over year at 5% compounding growth on growth and has a very strong growth now also in Mexico. So it's very different it's a very different picture across that category. Okay. So the next question is from Patrick Schrendeman from ZKB. Patrick, please go ahead.
Good morning, Stefan. I just was wondering why the acquisition effect was lower than expected at 0.6%. Just I would have assumed that Gauterna itself should have a positive impact of 1.8%. That's my first question. And secondly regarding the Easter effect bearing in 'nineteen this effect, would you say it would be a fair assumption that quarter 2 organic growth could be a little bit lower than quarter 1?
Thank you.
Okay. So the M and A impact what's in there is skin health as a positive, but you also got to keep in mind that we divested Juicy Juice, Nestle Corea, PowerBar and Water HD last year as an offsetting result. So these things balance each other out. In terms of Easter, yes, Easter was 2 weeks earlier this year than last year. It is broadly in line with our expectation and then it clearly helped as you can see from the figures in Zone M and A and especially in confectionery and culinary.
But we do not usually carve out these one off events in one specific quarter and we don't guide too much on them. It's a beauty of being a diversified company. So it did have an impact, but I would not dare to give you a number right now.
So if you would say it could be possible to have in quarter 2 similar organic growth as in quarter 1?
Again, a quarterly guidance is not usually something we do. We would refer back to a full year guidance of organic growth around aiming of 2 or 4 organic growth of around 5%. And that's what we're really building towards.
Okay, great. Thanks.
The next question is from James Targett from Berenberg. Good morning, James. Please go ahead.
Good morning. A couple of questions for me. Just firstly on water. You've had a couple of strong quarters of growth even on a pretty tough comp this quarter. Just wanted to see if there are any timing issues or whether you're comfortable that this level of growth could continue?
And then secondly, just back on frozen in the U. S. Mr. Brabaugh made some comments yesterday in the AGM about having found the right solution for the business in 2015. Does this just refer to the communication and innovation that you spoke of?
Or is there something more there? Thanks.
Okay. Thanks, James. On water, look, we have broad based growth in all geographies and brands. And the growth is really, of course, driven by our strategy of with our 3 tiered brands hierarchy, but it's really growing categories also. So this is we see a good sustained growth in Waters.
This is for that question. And we have focused our choices on premiumization, value added products and portfolio strengthening. North America is strong. Europe is doing much better. So overall, this is a very strong performance in Waters and we see that sustaining.
As to the comments of Mr. Brabeck from yesterday, no, he referred to the plans that we have in place and that both Paul Bulky and Van Link Martello have talked about at the full year and also on the roadshows. He did not mean to say anything different than that.
Okay.
Next question is from Warren Ackerman from Societe Generale. Good morning Warren. Please go ahead.
Good morning Stefan. It's Warren here. Two questions from me as well. First one is on coffee. I'd like to get some more color on coffee.
Can you say Stefan what soluble coffee did in the quarter? And then just on espresso, you talk about a competitive market. Can you tell us exactly where the competition is coming from? And perhaps a quick update on how virtual line is doing in the U. S?
That's the first question. And then secondly, I guess the beat today on organic seems to be driven by pricing overall. Can you maybe outline where you've taken most pricing in the quarter? And then looking out for the year, given much lower dairy prices, should we expect pricing to come off? And if so, maybe an idea of kind of how quickly just looking at dairy cost coming down very significantly?
Thank you.
All right. So I'll take the first one on coffee. The soluble accelerate the soluble organic growth accelerates driven also by higher pricing. And in coffee, we are the category leader in many markets. And as such, we are often the 1st movers in pricing.
And that can have an impact on rig and it does. Nescafe Dolce Gusto is a growth engine for us with double digit growth still. It's doing very well. Soluble ex without Nescafe Dolce Gusto is driven by Black Cup. And we continued innovations with good traction, the Microgrine soluble coffee in Japan, the Barista Gold Style, the mixes, new white forming cappuccino, virtual identity launch proceeds well.
Japan, the cafe and Nescafe and Harayuku. So overall, this category performs well, but again, pricing taken as a market leader with a slight impact on rig. And for Nespresso, you asked about the virtual line. That is completely on track with expectations. And we alluded to that before, we do see competition coming in.
But we believe due to the reasons I gave before, we have a very clear positioning in espresso with our premium product offer, with machines, with the service. So we're competing and we believe we're on a good track there as well. Your organic and pricing question, the pricing is driven by what you would expect it to be. So it's Latin America. It's the 2 countries in Eastern Europe that drove pricing.
And it's to a smaller effect actually also due to the fact that in Western Europe, the negative pricing eased very slightly. So these are the effects that hit pricing. Now going forward, we don't guide on pricing. Pricing is a very local decision. It depends on your brand strength in the market, on the strength of your competitors' brands.
It also depends on the retail situation in any given market and also on the overall commodities basket. So sometimes the commodity volatility is reflected in pricing. Very often, we try to offset it in other lines of the P and L with efficiencies, with delaying certain parts or finding solutions to commodity volatility in other parts of the P and L.
Thank you, Stefan.
The next question is from Alain Oberhuber from MainFirst. Good morning, Alain.
The lean cuisine and the Stouffer's? And then the question in there is, how is Hot Pocket doing? And my second question is on the currency impact for the year. If we look at the current environment of currencies, what could be the impact that comes from currency is based on today?
So I understood your first question when prepared was more on the categories, right? I hope I understood that question right. So the pizza category is close to flat. And the overall frozen category in the United States, we see with a very slight negative of about minus 2. But the pizza category particularly is flat.
And everything we said about the frozen category in the United States that we said we make products more relevant to the consumer, we change our offering, we change the packaging, we change certain parts of the contents, we talked about concepts like gluten free and so on. That all applies to pizza as well. And interestingly, we do see a very good performance of our frozen pizza in Europe right now where innovation and premiumization drives a very good performance. On currency, we don't usually guide on currency. There is an impact for the year, but clearly the U.
S. Dollar has also recovered.
Could you end on Hot Pocket, Stefan? Just coming back what did Hot Pocket do?
Hot Pocket as a category is actually slightly up. The growth in 2014 was impacted by the SNAP product. You know SNAP, that's the American Food Stamp Program. Hot Pocket was impacted in 2014 by the SNAP reduction and some voluntary withdrawal of certain SKUs we had the topic there. However, the fundamental performance is positive and we improved recipes and we increased velocity.
Great. Thank you very much.
Okay. Next question is from Jean Philippe Bertsch from Vontobel. Good morning, Jean Philippe. Good morning, Stefan. Please go ahead.
To come back to Peter's private comments yesterday about accelerating the adjustments of the portfolio then you always as well explicitly mentioning Jorge Paulo Lehmann. So should we read as well that you would take some more aggressive said that the growth in the U. S. Was strong as well. Said that the growth in the U.
S. Was strong as well mid single digits. Have you seen in that region signs of a slowdown towards the end of the quarter due to these droughts and as well due to the negative press in that region? And the third one a very short one on the buyback. Are you confirming that you would complete the program of the €8,000,000,000 at the end of this year?
Okay. So for the first one on Mr. Brawick's comments from yesterday. I would actually say we've said many times in the past that Nestle is the ant company. And we often said that we believe in order to create value on the long run, we need to grow and improve profitability.
And this is what we're doing on the long term. And that really is I think the view we got to give you. But in terms of cost cutting, yes, of course, we're doing our homework as well. We've announced the new Nestle Business Excellence organization under Chris Johnson. You know that we've taken the Globe system and we've put that together with the shared business and we put that together with the continuous excellence program in order to share, to standardize and to simplify operations and really to leverage Nestle's size into more of a strength.
The idea here again is to free up the resources in the markets to focus on what they have to do in terms of innovation, in terms of growth and enable them to do that well. That is our view on that. For the drought in California, first a short reminder maybe on March 17 Nestle has published the latest creating shared Value report. You can see this on the web or you can get a paper copy here from us. It's a very comprehensive document with many KPIs where we provide a lot of facts on what we're doing in the overall area of creating shared value.
And you know that is one of the key topics and there is also one of the topics where our Chairman is very active. And so we are concerned with water. And we are concerned with water. And we are also particularly concerned also with the drought in California. But we also feel we're part of the solution.
We contribute to improve the water footprint. We continue to improve the operational efficiency. And what is the category actually with the lowest water usage versus other beverages? And lastly, from the amount of water we're withdrawing, we're water neutral. So we're always withdrawing as many as much water from our resources as it gets naturally replenished over time.
And finally, we believe the best way to save water is to drink it. But this is obviously a very wide, very, very, very complex topic. And I would invite you to reach out to our media relations and to our public relations team if you or we can set that up for you. If you want to have a more in-depth discussion, we're happy to do that. Now for the share buyback, the share buyback is we're now €2,500,000,000 into the €8,000,000,000 program.
We said we aim to buy back €8,000,000,000 Swiss billion by the end of the year, but we also said it's depending on market conditions. Good. That gets me to the next question from Robert Walschmidt. Robert, good morning. Please go ahead.
Good morning. Could I ask 2 questions if I may? Firstly, in terms of the Waters business, can you quantify the amount of the business which is now in emerging markets as a percent of the division? And then secondly, in terms of the U. S.
Overall, is the U. S. In positive growth? And if it is, is it driven by pricing only? Thank you.
Okay. So the first question, the emerging markets for Waters are around a quarter of the business, about 20%. And for the U. S. Overall, sorry, what could you repeat your question?
I didn't understand that very well.
Yes. So your organic sales growth in the U. S, is it positive? And then alongside that, if it is positive, is it driven exclusively by price? Or is there positive rig as well?
So the growth in the U. S. Is positive. It's driven by rig and of course partly by pricing. Okay.
Good. Next question from Adam Spielman from Citibank. Good morning, Adam.
Good morning. In fact, my question
was a very specific question and it's already been asked. So thank you and answers indeed. So thank you very much.
That was easy. Next question is from Alain Erskine, UBS. Alain, good morning.
Good morning, Stefan. Just one question for me. If I kind of triangulate the growth rates of the Nutrition business and the Nutrition category, If I got my mind right, it looks like Neste Health Science and Skin Care were up 15% in the quarter. So could you just give us a little bit more color as to what drove that growth? And was there any sort of one off factors in there that would prevent us from sort of extrapolating that kind of growth rate into the balance of the year?
Thank you.
Okay. Look, SkinnyFit performance was good in Q1 and it was in line with our expectation. But we do not carve out the contribution of each businesses to the group's organic growth. So what I can tell you both did well and both contributed to growth and there were no particular one offs. In terms of the full year, I would come back to our overall guidance on the group level that we aim for 5%.
Thank you.
Okay. Next question is John Reville from The Wall Street Journal. Good morning, John.
Good morning, Stefan. A couple of points.
You guys referred to Europe as being quite a
good the European zone has been quite a good performance. But in actual numbers, sales have actually gone down. So I was wondering, how much of that is just is it pure currency translation? I mean, how much of a currency is the strong franca drag there? Or is it something else?
And also you mentioned that the consumer mood is moderately improving in Europe. I just wondered if you could tell me where it's doing better and where it's struggling a little bit on sort of consumer confidence in Europe and how sustainable you think that is? That's my first kind of point about Europe. And then secondly, just a bit more color on China please. You say China is kind of improving, but then also you mentioned that China was a drag on sales.
So is China actually in positive territory? And could you give us a bit more sort of color about what's going on? I know you mentioned a bit of it already, but a bit more color on China and when you see that coming back and what's happening out there? Thank you.
Okay. Good. So these are a couple of quick ones actually. So Europe, yes, it's impacted by currency. The consumer sentiment, we do see better feedback from countries like France, Spain.
This is where we see consumer sentiments coming up. And then China, as we said before, as a market, including the globally managed businesses, is kind of flattish. And as I described before, we have parts that are still challenged and these are the ones we talked about before. And we have other parts that do very well So that in the balance, the market is very slightly positive. And the challenges are the ones we talked about and where the programs are underway.
But again, I would love to give more updates to that at maybe at our half year or our 9 months call. That will be more substantial I feel.
Right. And in Europe, I mean, which countries are kind of still struggling on consumer sentiment in Europe? And I mean, do you think we've actually kind of turned the corner overall in Europe yet? Or is that still too early to call?
We feel that's still too early to call. That's still too early. Because look, what we do see is slight improvements here and there. It's early signs, but it's that's it.
Okay. And we're still kind
of tough on the consumer sentiment side
then? Excuse me?
Where's still difficult on the consumer sentiment side in Europe?
It's very difficult in place
like South. Well, it's
difficult in
Europe on the consumer sentiment side.
It's difficult in places that are obviously challenged like in Greece. It's obviously difficult in places like some parts of Eastern Europe where we have it's actually also not so easy in Switzerland.
Okay. Thank you.
Okay. The next question is from Jerry Gallagher from Deutsche Bank. Gerry, good morning.
Good morning, Stefan. Thanks for taking the questions. A couple for me. Just looking for a bit more granularity, if possible. Firstly, just on pricing in Latin America.
1 of your global FMCG peers yesterday was able to give us a bit of granularity
on the contribution to their
organic growth from Argentina and Venezuela. I wonder if you could help us a little bit more on that. And then secondly, I'm slightly confused on Galderma. Could you just confirm whether the Galderma numbers are in the organic line or in the acquisitions line? Thank you.
1st, Galderma, it's in both. And then for pricing in LatAm, look, we do not carve out rig inorganic growth by country. And organic growth always includes some parts of inflation and deflation. Venezuela and some of the hyperinflation countries in that continent are relatively small in sales and then they're getting smaller due to the continued devaluation we're doing there. That would be and we have that I think that would be it from that standpoint.
I have one final question from John Cox again. Hi, John.
Yes. Sorry, Stefan. I thought I'd have 2 bites of the cherry. On the confectionery, the premium confectionery rollout, you mentioned Spain. I'm just wondering, do you have any plans to roll out in North America at all?
That is probably a bit too early to say right now. So you see that these are brands that came here from Switzerland from Europe. We're going market by market, but it's too early to say about the rollout in North America.
And generally, you're pretty satisfied with what you're seeing in France, for example?
Yes, so far, we are.
Okay. Thanks for taking the call, Andy.
Okay. Good. Well, that was the last question. Thanks very much. And that brings us to the end of our 3 month sales call.
If there are any further questions you want to ask, I think you know all our addresses, web, e mail, of course, Twitter. And otherwise, we look forward to talking to you again at our half year results call on August 13. Until then, thank you for your time, your interest in Nestle. And I wish you all a great day and a great upcoming weekend. Goodbye.