Slowdown in emerging markets hits sales growth at Nestle and SABMiller
NESTLE AND SABMiller reported sales growth in emerging markets that missed estimates, sparking concern of a slowdown in regions that consumer goods makers are relying on to offset slumping markets across Europe.
Nestle, the world’s biggest food company, fell the most in six months in Zurich trading after saying flooding in the Philippines and other business disruptions in parts of Asia, Oceania and Africa weighed on a region that represents more than a quarter of sales.
SABMiller also slid after the world’s second largest brewer said sales were hindered by a more modest pace of growth and weaker consumer sentiment in Latin America, its most important region for sales and profitability.
Sluggishness in emerging markets would be a blow to European consumer goods makers that have expanded from Brazil to China to compensate for slowing economies closer to home.
Nestle, which last year paid $1.7 billion (€1.3 billion) for a 60 per cent stake in Chinese snack and candy maker Hsu Fu Chi International, said nine-month sales growth in the Asia, Oceania and Africa region was 9.4 per cent, down from 11.6 per cent in the first half.
Nestle shares fell as much as 3 per cent to 60.40 Swiss francs, the steepest drop since April 23rd, while SABMiller fell up to 1.7 per cent to 2,609.5 pence, the lowest price since July 4th. – (Bloomberg)