Nestlé S.A. : Full Year 2011: 7.5% organic growth, +60 basis points margin improvement
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Nestlé S.A. : Full Year 2011: 7.5% organic growth, +60 basis points margin
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Full Year 2011: 7.5% organic growth, +60 basis points margin improvement
* Sales of CHF 83.6 billion, 7.5% organic growth, 3.9% real internal growth
* Trading operating profit of CHF 12.5 billion, margin 15.0%, +60 basis
points, +90 basis points in constant currencies on continuing operations
* Strengthened market positions globally, with emerging markets growth 13.3%
and developed markets 4.3%
* Continued investment in innovation and platforms for growth including the
Chinese partnerships and Nestlé Health Science
* Underlying earnings per share CHF 3.08 up 7.8% in constant currencies
* Proposed dividend of CHF 1.95 per share.
* Positive 2012 Outlook: Organic growth of 5-6%, improved margin and
underlying earnings per share in constant currencies
Paul Bulcke, Nestlé CEO: "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. We have continued to invest for the future
and strengthen our capabilities across the world. We have established new
partnerships in China. Nestlé Health Science has got off to a good start. 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. Our people are aligned behind
our strategic roadmap, which is as relevant in today's new reality as ever, to
drive sustainable performance improvement. We are therefore well positioned in
2012 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."
Note: As previously announced, Nestlé made certain changes in presentation for
revenue and operating profit as of January 2011 which have no impact on net
profit and earnings per share. The 2010 figures have been restated for the
changes to be on a comparable basis, which excludes Alcon, except for earnings
per share and cash flow which include the contribution from Alcon. This is
reflected in the analysis below.
Vevey, 16 February 2012 - For 2011 the Nestlé Group reported sales of CHF 83.6
billion and 7.5% organic growth on top of good growth in recent years. The
organic growth was composed of 3.9% real internal growth and pricing of 3.6%.
Foreign exchange had a negative impact of 13.4% and divestitures, net of
acquisitions, a further 4.2%, mainly Alcon. Excluding the impact of the sale of
Alcon, sales were down by 4.8%.
· The Group's trading operating profit was CHF 12.5 billion. The margin
increased 60 basis points (90 basis points in constant currencies) to 15.0%.
· Nestlé Continuous Excellence in all areas of the company continued to
create significant savings ahead of target, helping to partially offset major
input cost pressures.
· Higher input costs increased the cost of goods sold by 190 basis
points.
· Total marketing costs were down 100 basis points, mainly the result of
leveraging our sales and marketing structures. Consumer facing marketing
remained at almost the same level after two years of double-digit increases,
which allowed us to further build our market positions in most categories.
· Administrative costs were down 80 basis points.
· Net profit was CHF 9.5 billion, up 8.1% on a continuing basis.
· The underlying earnings per share (EPS) increased 7.8% in constant
currencies.
· Operating cash flow was CHF 9.8 billion, a similar level to 2010
excluding Alcon's cash flow in 2010 and the impact of foreign exchange in 2011.
Business Review
* The Nestlé Group 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. Our business grew 13.3% in emerging markets and 4.3% in
developed markets.
* Trading operating profit margin for the Group as a whole and in many of our
businesses improved in a year characterised by severe cost pressure and
intensified competition around the world. Growth leverage combined with
Nestlé Continuous Excellence contributed significantly.
* We continued to build our capabilities, investing in areas for future
growth. Our two new partnerships with Yinlu and Hsu Fu Chi will deepen our
engagement with Chinese consumers. Nestlé Health Science and the Nestlé
Institute of Health Sciences are off to a good start in their first year of
operation. These initiatives along with other investments are creating major
growth platforms for the future.
Zone Americas
Sales of CHF 26.8 billion, 6.2% organic growth, 1.1% real internal growth;
18.4% trading operating profit margin,
-30 basis points.
* The Zone achieved growth in both North America and Latin America.
* In North America most of our businesses contributed to the positive
performance despite subdued consumer confidence. Pizza strengthened its lead
over its competitors with a good performance by DiGiorno. Ice cream saw
growth in snacks, Häagen-Dazs and Skinny Cow. The extension of the Skinny
Cow brand into the chocolate category helped to drive growth there. Soluble
coffee achieved good growth with Taster's Choice and Nescafé Clásico.
Coffee-mate benefited from the successful launch of Natural Bliss. The
frozen segment continued to be challenging but Lean Cuisine held share.
Petcare built on its leading market position with strong growth from Purina
ONE Beyond and Dog Chow, and achieved share gains in all categories and
channels.
* There was double-digit growth in Latin America where demand remained strong.
Several markets recorded growth in double digits with Mexico a highlight. It
was a similar story in many categories including powdered beverages with
Nescau and Nestea, soluble coffee with Nescafé and ambient culinary. Maggi
achieved excellent growth in key markets helped by the successful launches
of new innovations, Maggi Doble Gusto bouillon cubes and Maggi Caldo Casero
bouillon. For petcare Purina Proplan, Dog Chow and Cat Chow also saw double-
digit growth.
* The Zone's trading operating profit margin was 30 basis points lower as
higher input costs were not fully compensated by efficiencies and pricing.
Zone Europe
Sales of CHF 15.2 billion, 4.0% organic growth, 1.8% real internal growth;
15.6% trading operating profit margin, +230 basis points.
* The Zone achieved growth in Western and Central / Eastern Europe.
* 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 the 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. Trading conditions remained tough in
Russia and Poland.
* Innovation continued to drive our European growth with a major contribution
from brands like Nescafé Dolce Gusto, Nescafé Sensazione in soluble coffee
and Herta in chilled culinary. The Juicy range of spice-filled roasting bags
continued to be a strong contributor for Maggi in culinary. Growth in
Popularly Positioned Products (PPPs) was more than twice the level of that
achieved by the Zone as whole. In petcare Felix did well, particularly the
successful rollout into Central and Eastern Europe.
* The Zone's trading operating profit margin improved 230 basis points. Key
drivers included the growth in Western Europe, pricing, efficiencies, as
well as the benefits of past restructuring including changes to retirement
plans.
Zone Asia, Oceania and Africa
Sales of CHF 15.3 billion, 11.9% organic growth, 7.9% real internal growth;
18.9% trading operating profit margin, +90 basis points.
* The Zone achieved growth in emerging and developed markets.
* Nestlé's presence in the region is deep-rooted, demonstrated by four 100
year anniversaries: Turkey in 2009, Philippines in 2011, and Malaysia and
India in 2012.
* The emerging markets produced double-digit growth. The highlights included
China, India, Pakistan, North Africa, Central West Africa despite the
conflict in Côte d'Ivoire, and Egypt in spite of the turmoil endured for
much of the year. In a volatile environment the Zone remained focused on
deepening distribution, aiming to service an additional one million small
retail outlets between 2010 and 2012. We invested in line extensions and new
factories across the Zone. We also established promising partnerships in
China with Yinlu and Hsu Fu Chi.
* There were many successful initiatives involving Popularly Positioned
Products (PPPs) which were the key drivers of the Zone's growth. For
example, Maggi bouillons in Africa and Nido Essentia in Egypt. Innovation
also played a significant role with successful launches for Nescafé Milky in
China, Nescafé 3:1 in Thailand, Nido Fortified in several African countries
and the continuing roll-out of peelable ice cream. The Maggi flavour world
and noodles range was expanded in markets across the Zone.
* The developed markets' performance was helped by a strong year for Japan,
our people reacting fast and creatively in a market badly affected by
natural disasters. There was a good performance in the coffee systems market
by Nescafé Dolce Gusto and Barista, as well as in premium with Nescafé
Koumibaisen. KitKat Black also continued to enjoy strong sales there.
* The Zone's trading operating profit margin was up 90 basis points largely
thanks to innovation and renovation across all areas and initiatives such as
distribution, manufacturing and procurement supported by Nestlé Continuous
Excellence.
Nestlé Waters
Sales of CHF 6.5 billion, 5.2% organic growth, 3.4% real internal growth; 8.0%
trading operating profit margin, +90 basis points.
* Nestlé Waters grew in all three zones.
* North America grew both in the retail channel and home & office. Nestlé Pure
Life and the international brands S.Pellegrino, Perrier and Aqua Panna
performed well, offsetting a tough competitive environment for the regional
brands.
* The European business gained share with strong performances in most markets
including France, Italy, Germany and the UK.
* We continued to grow double-digit and build a stronger presence in the
emerging markets, where our sales exceeded CHF 1 billion.
* Nestlé Pure Life continued to produce double-digit growth worldwide. There
was high single-digit growth from the international brands, all strong
contributors globally. Vittel and Hépar performed well in Europe, whilst Ice
Mountain and Ozarka were the strongest of the regional US brands.
* The Nestlé Waters trading operating profit margin increased 90 basis points
due to rigorous cost management, especially in Europe, pricing and the
strong growth in Europe and emerging markets.
Nestlé Nutrition
Sales of CHF 7.2 billion, 7.3% organic growth, 4.5% real internal growth; 20.0%
trading operating profit margin,
- 30 basis points.
* Infant Nutrition, representing about 90% of the division's sales, enjoyed
good growth overcoming relatively subdued developed market trading
conditions. This was due to a well supported strong innovation pipeline,
broad-based market share gains and double-digit growth in emerging markets
for both infant formula and infant cereals. The launch of the BabyNes system
in Switzerland, a promising breakthrough innovation, had a good reception in
its first months.
* Weight Management in North America was affected by weak consumer spending
and intensified competition. We are taking steps to address the situation.
The international Jenny Craig business is performing well with good growth
in Oceania and promising momentum in Europe. Growth at Performance Nutrition
was strong in Europe and Oceania.
* The Nestlé Nutrition trading operating profit margin declined by 30 basis
points. The main impacts were input cost pressures and the tough trading
environment for weight management in the US.
Other
Sales of CHF 12.6 billion, 11.4% organic growth, 8.3% real internal growth;
16.8% trading operating profit margin unchanged.
* Nestlé Professional achieved good growth both in developed and emerging
markets, especially in China, India and Brazil, in both beverages and food.
We continued to roll out our innovative premium and super-premium beverage
solutions (Nescafé Alegria, Nescafé Milano and Viaggi) to all regions. The
established Nescafé and creamers businesses continued to perform well. The
food business benefited from innovations such as Maggi Premium Bouillons and
Chef Natural Flakes for sauces, with continued focus on growing our
customised solutions, services capability and customer intimacy.
* Nespresso had another strong year, with growth over 20% on a sales base well
in excess of CHF 3 billion. The continued strong consumption in Nespresso's
core markets, as well as geographical expansion and the constant innovation
of products and systems, ensured a strong performance in the face of
intensified competition. The unique Nespresso service proposition including
boutiques, e-commerce and call centres builds intimacy with our consumers
which helps further reinforce our prospects for future growth.
* Nestlé Health Science in its first year of operations built up its
capabilities with three significant investments. At the same time it
achieved strong growth with contributions from innovative products like
Resource Thicken Up Clear, the Peptamen range, and the relaunch of Boost
which achieved high-teens growth in the US. Its core platforms; ageing
medical care, critical care and surgery, and paediatric medical care all
grew well, most of them double-digit. The 2011 acquisitions have been
integrated and are delivering to expectation. Prometheus achieved double-
digit sales growth. Vitaflo, acquired in 2010, also reported double-digit
growth, driven by innovations for patients with metabolic conditions.
* CPW grew mid-single digit, achieving share gains in the majority of its
markets. Trading conditions were toughest in Southern Europe, but growth was
resilient in the rest of Europe and double-digit in many emerging markets.
BPW had a positive year and will benefit in 2012 from its reshaping to cover
Europe and Canada.
* Galderma grew double-digit and has successfully integrated Q-Med, acquired
in March and accretive to growth. Laboratoires innéov made good progress
with a particularly strong performance in Latin America.
* The 'Other' trading operating profit margin was unchanged at 16.8%,
reflecting a mixed picture by constituent. Nespresso, Nestlé Health Science
and the food and beverages joint ventures performed well, whilst Nestlé
Professional was impacted by input costs despite a strong programme of
savings.
Board proposals to the Annual General Meeting
At the Annual General Meeting on 19 April, the Board of Directors will propose a
dividend of CHF 1.95 per share. The net dividend will be payable as from 26
April 2012. The Board will also propose the cancellation of the shares bought
back under the CHF 10 billion buy-back programme completed in 2011.
The Board will propose the re-election of Daniel Borel as a director for a
further term of three years, as well as the election of Henri de Castries. Mr de
Castries is the Chairman and Chief Executive Officer of the AXA Group. He had a
distinguished career in the French Finance Ministry before taking on several
important executive roles within the AXA Group. Carolina Müller-Möhl and Jean-
René Fourtou are not standing for re-election. The Board wishes to thank them
for their highly appreciated services provided to our company over the past
years.
Positive 2012 outlook
In view of continuing economic uncertainties and volatility, we don't expect
2012 to be any easier than previous years. But we continue to invest for the
future and strengthen our capabilities across the world. Our innovation is
creating opportunities in all categories, bringing new consumers to our brands
in emerging markets, building on our consumers' engagement with our brands in
the developed world. Our people are aligned behind our strategic roadmap, which
is as relevant as ever, to drive sustainable performance improvement. We are
therefore well positioned in 2012 to deliver the Nestlé Model of organic growth
between 5% and 6%, as well as an improvement in the trading operating profit
margin and underlying earnings per share in constant currencies.
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. 2011 | Jan.-Dec. | Jan.-Dec. | Change vs |
| | Sales | 2011 | 2011 | Jan.-Dec. |
| |in CHF millions| Organic | (%) | 2010 |
| | | Growth | | |
| | | (%) | | |
| | | | | |
| | | | | |
+-----------------------+---------------+-------------+-----------+------------+
|By operating segment |
+-----------------------+---------------+-------------+-----------+------------+
|· Zone Americas | 26,756 | +6.2 | 18.4 | -30 bps |
+-----------------------+---------------+-------------+-----------+------------+
|· Zone Europe | 15,243 | +4.0 | 15.6 | +230 bps |
+-----------------------+---------------+-------------+-----------+------------+
|· Zone Asia, Oceania,| 15,291 | +11.9 | 18.9 | +90 bps |
|Africa | | | | |
+-----------------------+---------------+-------------+-----------+------------+
|Nestlé Waters | 6,520 | +5.2 | 8.0 | +90 bps |
+-----------------------+---------------+-------------+-----------+------------+
|Nestlé Nutrition | 7,233 | +7.3 | 20.0 | -30 bps |
+-----------------------+---------------+-------------+-----------+------------+
|Other | 12,599 | +11.4 | 16.8 | 0 bps |
+-----------------------+---------------++------------++----------+------------+
|Total Group/continuing | 83,642 | +7.5 | 15.0 | +60 bps |
|operations | | | | |
+-----------------------+----------------+-------------+----------+------------+
|By Product |
+-----------------------+----------------+-------------+----------+------------+
|Powdered and liquid| 18,204 | +13.0 | 22.7 | -20 bps |
|beverages | | | | |
+-----------------------+----------------+-------------+----------+------------+
|Water | 6,526 | +5.2 | 8.0 | +90 bps |
+-----------------------+----------------+-------------+----------+------------+
|Milk products and ice| 16,406 | +8.4 | 13.7 | -30 bps |
|cream | | | | |
+-----------------------+----------------+-------------+----------+------------+
|Nutrition & healthcare | 9,744 | +7.7 | 18.7 | -20 bps |
+-----------------------+----------------+-------------+----------+------------+
|Prepared dishes and| 13,933 | +4.6 | 14.5 | +190 bps |
|cooking aids | | | | |
+-----------------------+----------------+-------------+----------+------------+
|Confectionery | 9,065 | +5.4 | 16.8 | +200 bps |
+-----------------------+----------------+-------------+----------+------------+
|Pet care | 9,764 | +4.3 | 20.6 | +20 bps |
+-----------------------+----------------+-------------+----------+------------+
|Total Group/continuing | 83,642 | +7.5 | 15.0 | +60 bps |
|operations | | | | |
+-----------------------+----------------+-------------+----------+------------+
2010 and 2011 are not directly comparable due to the changes of presentation
made to the Income Statement as of 1/1/2011 and the disposal of Alcon in August
2010. The 2010 figures have been restated for all the changes as a comparable
basis and reported for continuing operations only. Other changes include the
reclassification of Healthcare Nutrition, now part of Nestlé Health Science,
from Nestlé Nutrition to "Other", which also includes Nestlé Professional,
Nespresso and joint ventures managed on a worldwide basis. In the product
groups, "Nutrition and healthcare" includes nutrition, healthcare and
pharmaceutical products.
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originality of the information contained therein.
Source: Nestlé S.A. via Thomson Reuters ONE
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Datum: 16.02.2012 - 07:16 Uhr
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News-ID 115339
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