York KitKat producer faces slower growth

'‹Confectionery giant Nestle missed '‹its 2015 forecasts and '‹said it is getting harder to raise prices in a tough economic backdrop.

Chocolate packets are displayed in the showroom at the headquarters of Nestle in Vevey, Switzerland

The firm, which makes up to seven million KitKat bars a day at its York plant where it employs 1,800 people, reported a 4.2 pe'‹'‹r'‹ '‹cent rise in annual underlying sales and predicted a similar outcome this year.'‹'‹Like rivals, Nestle has had to deal with slower growth and more demanding consumers in emerging markets, notably China, while sales in India have been dented by a recall of its popular Maggi noodles.The group has been slow to adjust to changing consumer demands in China. It is reformulating some of its recipes to satisfy more health-conscious consumers and is also pushing e-commerce.'‹The firm, which also has a site in Halifax which employs up to 800 people at peak production, said: '‹"We anticipate that our trading environment in 2016 will be similar to previous years with even softer pricing."As such we expect to deliver organic growth in line with 2015, with improvements in margins and underlying earnings per share in constant currencies, and capital efficiency."'‹It was the third year in a row Nestle fell short of its long-term target of '‹five to six'‹ per'‹ '‹cent underlying sales growth, pushing the maker Gerber baby food and Pure Life bottled water to set out more modest expectations for 2016. Underlying, or organic, sales exclude currency moves, acquisitions and divestments.Kepler Cheuvreux analyst Jon Cox said the disappointing outlook, and no share buyback announcement, would weigh on the stock."Its comment that pricing will be even softer in 2016 versus 2015 will send a chill through the whole space today and stock is going to take a smack," he added in a note.Last month, rival Unilever warned of a difficult year ahead, forecasting sales growth of '‹three to five'‹ per'‹ '‹cent.

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