Nestlé S.A. : Nestlé S.A. : FY 2012: Good performance across the board, Nestlé
model delivered again
Nestlé S.A. / Nestlé S.A. : FY 2012: Good performance across the board, Nestlé
model delivered again . Processed and transmitted by Thomson Reuters ONE. The
issuer is solely responsible for the content of this announcement.
Follow today's events live
08:00 CET Investor webcast
10:00 CET Press Conference webcast
This press release is also available in French (pdf) and German (pdf)
Reports published today
2012 Financial Statements (pdf)
Corporate Governance Report (pdf)
Other language versions available in Reports
FY 2012: Good performance across the board, Nestlé model delivered again
oSales of CHF 92.2 billion, up CHF 8.6 billion, +10.2%
o5.9% organic growth, 3.1% real internal growth
oTrading operating profit up 11.8% to CHF 14.0 billion, margin up 20 basis
points to 15.2%
oEarnings per share up 12.2% to CHF 3.33
oProposed dividend increased to CHF 2.05 per share
oOperating cash flow increased CHF 5.6 billion to CHF 15.8 billion
o2013 outlook: Organic growth of 5% to 6%, improved trading operating
profit margin and underlying earnings per share in constant currencies
Paul Bulcke, Nestlé CEO: "In 2012 we delivered on our commitment: a good,
broad-based performance building upon the profitable growth achieved
consistently over previous years. All our businesses, both in developed and in
emerging markets contributed. Our nutrition, health and wellness agenda
continued to bring enhanced benefits for consumers, greater brand
differentiation in the market place and increased value for shareholders. With
creativity and innovation, our people laid the foundations for future growth.
We increased the support behind our brands. We further strengthened our global
R&D network with new facilities in India and China. We developed new
capabilities for Nestlé Health Science and acquired Wyeth Nutrition. We
invested responsibly and sustainably, expanding our manufacturing footprint,
while continuing to reduce the environmental impact of our business. Despite
the many challenges 2013 will no doubt bring, we expect to deliver the Nestlé
Model of organic growth between 5% and 6% as well as an improved margin and
underlying earnings per share in constant currencies."
Vevey, 14 February 2013 - Nestlé's reported sales were up CHF 8.6 billion, or
10.2%, to CHF 92.2 billion. Organic growth was 5.9%, building on the strong
growth of recent years, and was composed of 3.1% real internal growth and 2.8%
pricing. After years of adverse impact, foreign exchange added 1.7% to sales,
and acquisitions, net of divestitures, a further 2.6%.
oThe Group's trading operating profit was CHF 14.0 billion, up CHF 1.5
billion or 11.8%. The trading operating profit margin was 15.2%, up 20
basis points, +10 basis points in constant currencies.
oThe cost of goods sold fell by 30 basis points and distributioncosts were
down 20 basis points. Nestlé Continuous Excellence delivered efficiencies
of over CHF 1.5 billion, building on savings in previous years.
oWe increased the marketing support behind our brands bringing total
marketing costs up by 30 basis points. Consumer facing spend rose about 8%
in constant currencies.
oAdministrative costs were up by 20 basis points, following last year's
drop of 80 basis points caused by the restructuring of pension plans in
oNet profit was up CHF 1.1 billion to CHF 10.6 billion, and earnings per
share were up 12.2% reported to CHF 3.33. Underlying earnings per share in
constant currencies were up 7.5%.
oWe increased operating cash flow by CHF 5.6 billion to CHF 15.8 billion,
reflecting primarily a substantial improvement in our working capital.
oThe Nestlé Group's growth was broad-based across all categories and
geographies, with 5.9% organic growth in the Americas, 2.4% in Europe and
10.3% in Asia, Oceania and Africa.
oIn spite of the challenging trading environment in the developed world our
innovation in products, systems and routes to market delivered organic
growth of 2.5%. In emerging markets we grew 11%, achieving sales of CHF
oWe took further steps to enhance our position as the trusted leader in
nutrition, health and wellness. We continued to reformulate products to
make them healthier and tastier. We leveraged our research and
development capabilities to deliver good nutrition and develop solutions
to help people manage diet-related illnesses. We continued to build
partnerships with organisations active in the fight against
non-communicable diseases. We acquired Wyeth Nutrition and a number of
new capabilities for Nestlé Health Science. We inaugurated the Nestlé
Institute of Health Sciences, added two new R&D units in China, a new R&D
centre in India and opened a global centre for clinical trials in
Sales of CHF 28.9 billion, 5.2% organic growth, 0.6% real internal growth;
18.6% trading operating profit margin, +20 basis points.
oThe Zone grew in both North America and Latin America.
· In North America we focused on increasing the value perception of
our frozen food business, with improved recipes and nutritional profiles, a
new promotional strategy and communication, whilst also prioritising the
higher value segments within ice cream. The result has been generally
improving share trends across our categories. Frozen was helped by innovations
including DiGiorno Italian Favorites and Lean Cuisine Salad Additions. Ice
cream grew in the higher value areas, super-premium and snacks, reflecting our
strategy to optimise the category mix. Another innovation, Häagen Dazs Gelato,
was launched successfully. The coffee and creamers businesses performed well
in categories that are enjoying good growth. The Coffee-Mate liquid range,
including Natural Bliss, was the highlight in creamers, whilst Nescafé Clásico
was the growth driver in soluble coffee. Petcare continued to grow volume and
improve shares, with line extensions and launches. Friskies Tasty Treasures
for cats and Beneful Fiesta for dogs were among a number of strong performers.
· In Latin America where we have continued to see generally positive
trends, we drove innovation through regional roll-outs under our
well-established brands. In Brazil, most categories grew double-digit.
Highlights included the successful launches of Kit Kat and peelable ice cream,
as well as the continuing good performance of Nescafé Dolce Gusto. In Mexico,
coffee helped drive growth, from popularly positioned products to Nescafé
Dolce Gusto. The other regions contributed positively. Petcare grew
double-digit across Latin America.
oThe Zone's trading operating profit margin increased 20 basis points due
to necessary pricing actions and consistent discipline in cost savings.
Sales of CHF 15.4 billion, 1.8% organic growth, 1.1% real internal growth;
15.7% trading operating profit margin, + 10 basis points.
oThe Zone grew in both Western and Central / Eastern Europe, demonstrating
that even in a challenging trading environment, there are opportunities to
achieve above-market growth and share gains.
· We continued to grow in Western Europe, maintaining momentum from
last year. This growth, fuelled by a strong innovation pipeline combined with
a rigorous approach to efficiencies, is enabling the Zone to increase both its
brand investment and margin. This should enable us to maintain our growth
momentum in 2013. In Greece and Spain trading conditions were extremely tough
but we were able to deliver growth. We also grew well in Great Britain where
we made real progress in the fast-growing online, convenience and discounter
channels. In France we gained market share in most categories. Across the
Zone, Nescafé Dolce Gusto continued to be a key growth engine and Maggi also
performed well in many markets. The performance of petcare, another key growth
driver, was driven by the premium category, in particular Felix, Gourmet,
Proplan and Purina ONE.
· In Central Europe and Eastern Europe we have enhanced our
competitive position in coffee and petcare, with increased local manufacturing
and distribution capabilities. There was continued improving momentum in
Russia, with Nescafé, ice cream and chocolate all contributing good real
internal growth. The other parts of the region also performed well.
oThe Zone's trading operating profitmargin increased 10 basis points,
reflecting volume growth and good cost management, and was achieved whilst
increasing brand investment. This improvement built on the 230 basis
points improvement in 2011.
Zone Asia, Oceania and Africa
Sales of CHF 18.9 billion, 8.4% organic growth, 5.9% real internal growth;
19.0% trading operating profit margin, +10 basis points.
· The Zone grew in the developed markets and in the emerging markets
where we continued to focus on increasing distribution and rolling out
popularly positioned products with strong nutritional profiles. We also
invested in new manufacturing facilities in different markets including China,
India, the Philippines, South Africa, Angola and Vietnam.
oAmongst emerging markets, we achieved double-digit growth in Africa,
China, the Middle East and Indonesia. There were strong contributions from
powdered beverages, predominantly Milo, and culinary, mainly Maggi, as
well as chocolate, ice cream and ready-to-drink beverages. Innovations
included Maggi Magic Meals, Milo High Fibre and Nestlé Esquimo Mummy.
oJapan was the strongest performer amongst the developed markets, with
Nescafé Dolce Gusto and Kit Kat both highlights. Kit Kat became the number
one brand in the chocolate category.
oThe Zone's trading operating profit margin rose by 10 basis points.
Sales of CHF 7.2 billion, 6.4% organic growth, 4.9% real internal growth; 8.9%
trading operating profit margin,
+90 basis points.
oNestlé Waters continued to perform well, further strengthening its
positions in developed markets in North America and Europe and increasing
the scale of its operations in emerging markets. It was helped by strong
sales of premium brands, S.Pellegrino and Perrier. Nestlé Pure Life
reinforced its leading position globally with strong double digit top
line, confirming healthy hydration as core to the bottled water category
oIn North America, regional brands including Poland Spring, Ice Mountain
and Zephyrhills benefited from growth in the category. The "Home & Office"
business also performed well.
oIn Europe, good performances in France and Great Britain compensated for
the subdued environment in Southern Europe.
oEmerging markets grew dynamically, with double-digit growth in Turkey,
Egypt, Mexico and Thailand, amongst others.
oThe Nestlé Waters trading operating profit margin increased due to the
division's growth and a high level of efficiencies in manufacturing,
procurement and distribution.
Sales of CHF 7.9 billion, 6.7% organic growth, 3.0% real internal growth;
19.2% trading operating profit margin,
-80 basis points.
o2012 was a good year for infant nutrition, particularly in emerging
markets, including the BRICs and Africa, with double-digit growth in both
formula and cereals. It also achieved growth in developed markets, despite
low birth rates, with good performances in particular in France and the
US, where it gained share. Innovations included the continued global
roll-out of anti-colic formula, Gerber pouches and shelf-stable infant
yoghurts in the US. The acquisition of Wyeth Nutrition, completed in
November, will enhance materially our position and capabilities in key
emerging markets, and improve the growth profile of our nutrition
oWeight Management continued to under-perform. Performance Nutrition grew
its distribution, aligned with its focus on its core consumers, and
released a renovated PowerBar ProteinPlus.
oNestlé Nutrition's trading operating profit margin was impacted by Weight
Management and transition and integration costs for Wyeth Nutrition.
Sales of CHF 13.9 billion, 8.7% organic growth, 6.5% real internal growth,
17.2% trading operating profit margin, +40 basis points.
oNestlé Professional achieved growth in the developed markets and
double-digit growth in the emerging markets, with both food and beverages
contributing. The beverages business enjoyed good overall growth, driven
by double-digit growth in system solutions, where sales are now at CHF 1
billion for the first time. Nescafé Alegria is now in over 60 markets,
whilst NescaféMilano is in more than 30 and expanding. The food business
also contributed solid growth, driven by innovation in sweet and savoury
flavour solutions and close customer collaboration.
oNespresso again delivered a strong performance with double-digit growth.
The company continued to reinforce its position in Europe and expanded its
presence at an accelerated pace in Asia Pacific and the Americas.
Innovations included five new Grand Cru coffees and two new machines,
Maestria and U. The boutique network saw 52 new openings to pass 300
locations in 48 countries, and new services were launched for Nespresso
Club Members. Nespresso sourced more than two-thirds of its green coffee
through its unique AAA Sustainable Quality programme and reached its 75%
recycling capacity commitment one year ahead of plan.
oNestlé Health Science continued to build its pipeline and capabilities
through an investment in Accera and the creation of a joint venture with
Chi-Med group, called Nutrition Science Partners. We inaugurated the
Nestlé Institute of Health Sciences. The product portfolio performed well
despite a challenging environment in some markets in southern Europe,
affected by changes to reimbursement arrangements. Aging Medical Care and
Critical Care and Surgery both benefited from product innovations and
oCereal Partners Worldwide achieved double digit growth in emerging
markets, which compensated weak category dynamics in developed markets.
The Beverage Partners Worldwide realignment is complete. The
pharmaceuticals joint ventures, Galderma and Laboratoires innéov, together
achieved mid single-digit growth.
Board proposals to the Annual General Meeting
At the Annual General Meeting on 11 April 2013, the Board of Directors will
propose an increase in the dividend to CHF 2.05 per share. The last trading
day with entitlement to receive the dividend is 12 April 2013. The net
dividend will be payable as from 18 April 2013. Shareholders who are on record
in the share register with voting rights on 4 April 2013 at 12:00 noon (CEST)
will be entitled to exercise their voting rights.
The Board will propose the re-elections of Peter Brabeck-Letmathe, Steven G.
Hoch, Titia de Lange and Jean-Pierre Roth as directors, each for a further
term of three years. The Board will also propose the election of Eva Cheng.
Ms. Cheng is the former Corporate Executive Vice President responsible for
Greater China and Southeast Asia Region of Amway Corporation, a U.S. based
global consumer product company.André Kudelski has reached the end of his
third term and is not standing for re-election. The Board wishes to thank him
for his service over the past twelve years which was highly appreciated.
Positive 2013 outlook
The environment looks to be every bit as challenging in 2013 as it was in
2012. But 2013 will again provide opportunities to leverage our competitive
advantages, deliver on our growth opportunities and benefit from our drive for
continuous improvement across the Group. We expect, therefore, to deliver the
Nestlé Model once again in 2013: organic growth between 5% and 6% together
with an improved trading operating profit margin and underlying earnings per
share in constant currency, as well as improvement in our capital efficiency.
Media: Robin Tickle Tel.: +41 21 924 22 00
Investors: Roddy Child-Villiers Tel.: +41 21 924 36 22
Full-year sales and trading operating profit margins overview
Trading operating profit
Jan.-Dec. Jan.-Dec. 2012 Jan.-Dec. 2012 Change vs.
2012 Organic Growth (%) Jan.-Dec.
Sales (%) 2011
By operating segment
· Zone Americas 28'927 +5.2 18.6 +20 bps
· Zone Europe 15'385 +1.8 15.7 +10 bps
· Zone Asia, Oceania, 18'912 +8.4 19.0 +10 bps
Nestlé Waters 7'174 +6.4 8.9 +90 bps
Nestlé Nutrition 7'858 +6.7 19.2 -80 bps
Other 13'930 +8.7 17.2 +40 bps
Total Group 92'186 +5.9 15.2 +20 bps
Powdered and liquid 20'038 +8.9 22.5 -20 bps
Water 7'178 +6.4 8.9 +90 bps
Milk products and ice cream 18'564 +5.7 15.1 +140 bps
Nutrition & HealthCare 10'726 +6.7 18.3 -40 bps
Prepared dishes and cooking 14'432 +1.4 14.1 -40 bps
Confectionery 10'438 +4.8 17.1 +30 bps
PetCare 10'810 +7.0 20.4 -20 bps
Total Group 92'186 +5.9 15.2 +20 bps
This announcement is distributed by Thomson Reuters on behalf of Thomson
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
information contained therein.
Source: Nestlé S.A. via Thomson Reuters ONE
--- End of Message ---
Avenue Nestlé 55 Vevey
WKN: 887208;ISIN: CH0038863350;
Press spacebar to pause and continue. Press esc to stop.