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Nestlé reports strong growth in full-year results for 2019

By Ramla Soni

Boost is supported by robust activity in the US and global sales of Purina PetCare and coffee in Starbucks products

In its full-year results for 2019, Nestlé has reported strong organic growth in line with expectations and an increase of total sales by 1.2 per cent to CHF 92.6bn.

The results were helped by strong momentum in the US and Purina PetCare globally. Coffee also played an important role with demand for Starbucks products in more than 40 countries. This generated more than CHF 300m of incremental sales in 2019.

As well as strong growth in the US, year-on-year acceleration was also due to improved momentum in Brazil and western Europe. Organic growth accelerated to 2.6 per cent in developed markets and remained largely unchanged in emerging markets at 4.7 per cent.

Net acquisitions had a negative impact of 0.8 per cent, largely related to the divestment of Nestlé Skin Health and Gerber Life Insurance. Foreign exchange reduced sales by 1.5 per cent.

Net financial expenses grew by 33.5 per cent to CHF 1bn, largely reflecting an increase in average net debt during the year, while the group’s net profit increased by 24.4 per cent to CHF 12.6bn, and earnings per share increased by 28 per cent to CHF 4.30. Net profit benefited from the sale of Nestle Skin Health, the company said.

Nestlé divested Nestle Skin Health in 2019 and announced the sale of its US ice-cream business for $4bn to Froneri (transaction closed January 31, 2020).

The company also agreed to sell a 60 per cent stake in its Herta charcuterie (cold cuts and meat-based products) business to Casa Tarradellas.

In 2020 the company expects continued increase in organic sales growth and further acceleration towards sustainable mid single-digit growth. Nestle also said it is “too early” to quantify the financial impact of the coronavirus outbreak at this time.

The Greater China region is Nestlé’s second largest market, representing about 8 per cent of global sales.

FURTHER READING: Nestlé boosts its medical nutrition sector

FURTHER READING: Nestle to invest 2bn Swiss francs in shift to recyclable plastics

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