Nestle Grows in Both Developed and Emerging Markets
Reflecting growth in both emerging markets and developed markets, Nestle increased net profit by 8.1% on a continuing basis to SFr9.5 billion (Eur7.8 billion) for 2011 on sales of SFr83.6 billion exhibiting organic growth of 7.5% and 3.9% real internal growth. Trading operating profit was SFr12.5 billion and the margin advanced 60 basis points (90 basis points in constant currencies) to 15.0%.
Nestle continued to grow in all regions of the world, with 5.0% organic growth in Europe, 6.4% in the Americas and 13.1% in Asia, Oceania and Africa. The business grew 13.3% in emerging markets and 4.3% in developed markets.
Paul Bulcke, chief executive of Nestle, comments: “We delivered good performance, top and bottom line, in both emerging and developed markets in 2011. It was a challenging year, and we do not expect 2012 to be any easier.”
During 2011, Nestle continued to invest in innovation and platforms for growth including new partnerships in China with Yinlu and Hsu Fu Chi, and the formation of Nestle Health Science and the Nestle Institute of Health Sciences, which both had a good start in their first year of operation.
“Our innovation is creating opportunities in all categories, whether bringing new consumers to our brands in emerging markets, or building on our consumers’ engagement with our brands in the developed world,” says Paul Bulcke.
Nestle achieved growth in Western and Central/Eastern Europe with sales up 4% organically to SFr15.2 billion and real internal growth of 1.8%. Trading operating profit margin improved by 230 basis points to 15.6%.
In Western Europe all markets overcame tough economic conditions to deliver real internal growth. Portugal, Italy, Greece and Spain collectively achieved 3.7% organic growth.France, the Benelux countries and Great Britain did well. All Nestle’s key categories grew with soluble coffee, chilled culinary, frozen pizza and petcare among the highlights.
In Central and Eastern Europe there were strong performances in Ukraine and Romania and in the Adriatic region. However, trading conditions remained tough in Russia and Poland. Innovation continued to drive Nestle’s European growth with a major contribution from brands like Nescafe Dolce Gusto, Nescafe Sensazione in soluble coffee and Herta in chilled culinary.
According to Paul Bulcke, the company is “well positioned in 2012 to deliver the Nestle Model of organic growth between 5% and 6% as well as an improved margin and underlying earnings per share in constant currencies.”
