Nestlé’s growth up 4.2%

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Nestlé’s trading operating profit margin went up 10 basis points in constant currencies and organic growth shot up 4.2%, according to its full-year 2015 figures.

As far as regional performance is concerned, organic growth for the Asia, Oceania and sub-Saharan Africa (AOA) area was 1.9%, 5.8% in the Americas (AMS), 3.5% in Europe, Middle East and North Africa (EMENA). Real internal growth was 2.4% in AMS, 2.8% in EMENA and 1.2% in AOA.

The highlights of the announced full-year results are as follows:

• 4.2% organic growth and 2.2% real internal growth

• Sales of CHF 88.8 billion, foreign exchange impact of -7.4%

• Trading operating profit margin of 15.1%, up 10 basis points in constant currencies

• Underlying earnings per share up 6.5% in constant currencies

• Strong operating cash flow at CHF 14.3 billion

• Proposed dividend increase to CHF 2.25 per share

• 2016 outlook: organic growth in line with 2015
with improvements in margins and underlying earnings per share in constant currencies, and capital efficiency

Paul Bulcke, Nestlé CEO, is quoted in a statement as saying: “In 2015 we delivered profitable growth at the higher end of the industry in what is still a challenging environment. This profitable growth was on the back of consistent performances in previous years. Our organic growth of 4.2% was supported by increased momentum in real internal growth combined with continued margin improvement. Additionally, we grew or maintained market share in the majority of our categories and markets.

“At the same time we continued to invest for the future with increased support behind our brands and further development of our new platforms in nutrition and health as well as E-commerce. We kept up the focus on portfolio management, turning around our frozen food business in the United States, disposing of non-core businesses and forging a new partnership to create a leading player in ice cream.

“Our free cash flow generation was again at the top end of the food industry at 11.2% of sales, as a result of our focus on margins with discipline in capital expenditure and working capital. Consequently, we propose to increase the dividend as we have for the last twenty years.

“We anticipate that our trading environment in 2016 will be similar to previous years with even softer pricing. As such we expect to deliver organic growth in line with 2015, with improvements in margins and underlying earnings per share in constant currencies, and capital efficiency,” Bulcke added.


Source: ClassFMonline.com

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