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

Nestlé S.A. / Nestlé S.A. : FY 2012: Good performance across the board, Nestlé
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2012 Financial Statements (pdf)
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.......................................

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."

Group results

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
    2011.

  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.

Business review

  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
    39.3 billion.

  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
    Switzerland.

Zone Americas

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.

Zone Europe

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.

Nestlé Waters

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
    growth.

  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.

Nestlé Nutrition

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
    business.

  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.

Other activities

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
    roll-outs.
    
  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.

Contacts
Media: Robin Tickle Tel.: +41 21 924 22 00
Investors: Roddy Child-Villiers Tel.: +41 21 924 36 22

Annex

Full-year sales and trading operating profit margins overview

                                                    Trading operating profit
                                                              margins
                            Jan.-Dec. Jan.-Dec. 2012 Jan.-Dec. 2012 Change vs.
                              2012    Organic Growth      (%)       Jan.-Dec.
                              Sales        (%)                         2011
                             in CHF
                            millions        
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
Africa
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
By product
Powdered     and     liquid      20'038           +8.9       22.5    -20 bps
beverages
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
aids
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
                                                              

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