Nestle Adopts IFRS From 2011
Nestle will change its sales recognition policy in line with International Financial Reporting Standards (IFRS) from the start of 2011. The change will reduce Nestle’s reported sales by about 15% as expenses such as discounts as well as certain allowances and promotions for retailers will in future be deducted from proceeds of sales, leading to a corresponding increase in profit margins. The change will, however, have no impact on absolute net profit, earnings per share, cash flows or items on the group’s balance sheet.
The 2010 results will still be reported on the current basis since the change will not be effective before January 2011. Nestle will communicate restated 2010 figures separately after the publication of the 2010 results to allow for comparability with subsequent results to be published from April 2011 onwards.
Meanwhile, Nestle has appointed Patrice Bula as executive vice president in charge of the strategic business units, marketing and sales as well as Nespresso, effective from May 1st 2011. He will succeed Petraea Heynike, who is retiring at the end of April 2011 after a long and distinguished career of more than 38 years with Nestle.
