2003 results & outlook for 2004

All press releasesMar 11, 2004

Download the press release  



Nestlé Waters consolidates its leadership in 2003 and announces numerous innovations for its still water brands in 2004

􀂾 Maintained growth rate superior to that of the global market
􀂾 Growth in sales, at constant perimeter and exchange rates, of +9.1%
􀂾 Continued improvement of the operating margin by +70 basis points, reaching 9.7%
􀂾 Consolidated leadership with 17% market share in value

Paris, Thursday 11th March 2004

Nestlé Waters presented today an analysis of its 2003 sales.

Despite the impact of a negative foreign exchange rate (-6.7%), Nestlé Waters’ sales rose by 4.5% in 2003, reaching 8.1 billion Swiss francs (approximately 5.2 billion euros). The impact of acquisitions on sales was +2.1%.

At constant perimeter and exchange rates, this growth represents an increase of +9.1%. This increase takes into account a strong real internal growth of +8.8%, along with a positive price effect of +0.3%.

In 2003, the global bottled water market grew in value by 8.3%. Nestlé Waters again recorded a growth level above the market rate, enabling the company to strengthen its leadership position, with a 17% market share.

In terms of operational contribution, Nestlé Waters’ EBITA in 2003 was 782 million Swiss francs. This represented 9.7% of sales (versus 9.0% in 2002), and an increase of 12.4% versus 2002. 2

Growth came from a strong performance in North America and Europe, the two key pillars of Nestlé Waters’ business model.

In Europe, Nestlé Waters increased sales by 8.6%. The results are partly related to the heat wave that scorched Western Europe last summer, as well as to a dynamic corporate policy of innovation and renovation of the brand portfolio. These innovations won several ‘Product of the Year’ awards for Nestlé Waters’ Contrex, Perrier and Vittel brands.

In parallel, Nestlé Waters continues to consolidate its Home & Office Delivery business (HOD), a segment that shows tremendous sales and profit potential for the coming years. Europe’s undisputed leader in the sector since acquiring the Powwow group early in 2003, Nestlé Waters has been optimising its HOD organisation over the past few months while introducing its European multi-site brand, Nestlé Aquarel. The brand is now sold in the HOD segment in France, Italy and Germany.

The heat wave did, however, reveal weaknesses in Nestlé Waters’ industrial and logistics model in France. Production and delivery problems related to the payment of overtime, required to meet the dramatic increase in demand, impinged on expected margins.

In North America, despite poor weather in the Northeast and a highly competitive market, Nestlé Waters’ sales succeeded in achieving a +9% growth rate. While maintaining a global price structure by implementing selective promotional sales strategies by region and by distribution channel, Nestlé Waters did more than merely defend its position, consolidating its leadership while achieving a market share of close to 32% and increasing its operating margin.

Elsewhere in the world, excellent performance levels were reached by NestléWaters in the Middle East, thanks to solid local partnerships and the development of Nestlé Pure Life.

In Asia, despite the negative impact of SARS (Severe Acute Respiratory Syndrome), and strong price decreases in several countries, Nestlé Waters increased its margins and strengthened distribution. Nestlé Pure Life also became a real lever for growth, accounting for over 50% of Nestlé Waters' sales in the region.

In Latin America, healthy performances in countries such as Argentina were affected by the region’s overall economic climate. 3 t

Looking ahead to 2004, Nestlé Waters will actively consolidate the acquisitions made in Europe’s HOD segment. At an industrial level, the company will further introduce measures to support sustainable improvements in efficiency and productivity.

In terms of innovation, after focusing on sparkling water over the last three years, with a dynamic innovation policy for Perrier, Nestlé Waters will give priority to still waters in 2004.

Demonstrating its commitment to continuous innovation, Nestlé Waters France announced today three new projects, to be launched in the next few weeks, to strengthen its product offer.

Following its success in 2003, including a ‘Product of the Year’ award, Contrex is looking to strengthen its leadership in the slimming water segment in France and Belgium by developing a full line of flavoured waters in a 1 litre format, starting in April 2004. Simultaneously, Vittel will be marking its 150th anniversary in France this year with innovations on two fronts, starting with a line of three flavoured Vittel products – "Citron Tonique" (lemon tonic), "Fraise Délire" (delirious strawberry) and "Pêche d’Enfer" (devilish peach) – in two formats: a 1.5 litre bottle and a 33cl six-pack. A new 2 litre "Maxigrip" format for Vittel natural mineral water will follow soon after. The innovative packaging is a first, with a built-in handle.

The Nestlé brands should also mark a new milestone in 2004 by boosting their share of Nestlé Waters' sales volumes to 12%.

Frits van Dijk, Chief Executive Officer of Nestlé Waters, announced: "Our 2003 performance met our targets for the year, illustrating the progressive development of the Nestlé Waters business model. Based today on regions with economic and political stability and high per capita incomes, this model will evenually allow Nestlé Waters to amass the resources required to improve profitability sustainably while broadening our leadership in a highly competitive world bottled water market."

Nestlé Waters, the Water Division of the Nestlé group, accounts for approximately 10% of the group’s consolidated sales. Nestlé Waters manages a portfolio of 77 brands bottled at 102 production sites, and counts a total of 27,690 employees.

For additional information:
Hubert Genieys: +33 (0) 1 41 23 38 00
Nestlé Waters – 20, rue Rouget de Lisle - 92 793 Issy les Moulineaux – France

Download the press release