TAKING THE PULSE: Results from Europe's food and consumer
products companies are expected to show a continuation of the
previous quarter's trends, as emerging markets drive higher volumes
but pricing remains difficult and Western Europe proves
challenging.
All eyes will be on the companies' outlooks for the second half
of the year, when input cost pressures are expected to increase,
markets are expected to remain difficult and comparative figures
from last year will become more demanding.
Analysts will look for evidence the industry can continue
growing volumes despite these pressures. The willingness of the
consumer to absorb price increases will also need to be gauged, if
the companies are to pass on their expected cost rises.
COMPANIES TO WATCH
Reckitt Benckiser PLC (RB.LN) 2Q results - July 26 0600 GMT
MARKET EXPECTATIONS: The Anglo-Dutch household and personal care
products group is expected to grow organic sales 6.7% in the second
quarter, with its pharma division continuing to drive growth.
Stripping out this unit, sales are expected to grow slightly ahead
of the group's full-year 5% target. A 0.5% rise in operating margin
should help deliver operating profit of GBP477 million, up from
GBP414 million last year. A failure to beat targets or raise
full-year guidance may be taken negatively as was the case in the
previous quarter.
MAIN FOCUS: Results will be somewhat overshadowed by the SSL
acquisition announced Wednesday. The presentation will be CEO Bart
Becht's first opportunity to discuss the deal given Reckitt was in
a close period when the deal was announced. Outlook will be key,
particularly in Europe, where growth has been sluggish and
competitive pressures are rising, particularly in the fabric care
category. The market will look for further guidance on how Reckitt
will grow the core business once generic competition for its
Suboxone drug is launched. Analysts will also look for reassurance
that Reckitt is not cutting its media spend to grow margin, after a
1% reduction in media spend in the first quarter.
Groupe Danone (BN.FR) 1H results - July 27 0530 GMT
MARKET EXPECTATIONS: Danone is expected to issue solid results
with first-half organic sales growth of around 6%, partly driven by
the company's price reduction and promotion strategy. Margins are
likely to contract slightly due to the higher cost of raw
materials. A number of analysts have recently increased full-year
estimates to account for expected positive effects from foreign
currency rates.
MAIN FOCUS: Investors are looking for updates on the full-year
outlook, with some expectations the company could raise its annual
targets for at least 5% organic sales growth and stable margins.
Also in focus will be any comments on future M&A plans after
the company's recent expansion in Russia.
Unilever PLC (UN, UL) 2Q results - Aug. 5 0600 GMT
MARKET EXPECTATIONS: The Anglo-Dutch consumer goods giant is
expected to continue its volume-led growth story in the second
quarter. While growth in volumes is expected to be lower than the
first quarter's 7.6%, a smaller drop in pricing will result in
underlying sales growth of a similar level to the 4.1% posted in
the first three months of the year. A 0.4% increase in operating
margin meanwhile should boost pretax profit to about EUR1.6 billion
from EUR1.2 billion.
MAIN FOCUS: The focus will be on the company's outlook for the
second half, when input costs start to rise and comparatives from
last year get much tougher. Low input costs in the first half have
enabled the company to invest heavily in marketing spend and boost
volumes. The market will look for guidance on how revenue momentum
can be maintained in a tougher environment. Pricing power will be
key and the market will need evidence that price rises can once
again be pushed through. Analysts will also look for further signs
of recovery in Europe and reassurance on its U.S. performance.
Nestle SA (NESN.VX) 1H results- Aug. 11, 0530 GMT
MARKET EXPECTATIONS: Nestle is expected to show another set of
strong figures in the first half as the Swiss food and beverages
giant is set to be one of the rare large industry players to
successfully increase prices across the board. Excluding the
divestment of U.S. eye care company Alcon, which Nestle is in the
process of selling to Novartis, both net and operating profit are
to expected to rise. Also, organic growth is forecast to be sound,
easily topping 5%, according to company consensus estimates.
MAIN FOCUS: Given the company's recent investor day where Nestle
outlined its strategy for emerging markets, analysts expect a
strong performance in regions such as Asia and South America.
Analysts will also look at the company's drinks business and
scrutinize Nestle's mineral water operations, which have been hit
during the downturn. Nespresso, which is facing competition from
new entrants, is expected to continue its growth story.
-By Michael Carolan, Mimosa Spencer and Goran Mijuk, Dow Jones
Newswires; 44-20-7842-9278; michael.carolan@dowjones.com