Nestle aims for 5% growth, strengthens China, US strategies

Despite announcing lower than expected sales increases for full-year 2014, Nestle SA net profit rose CHF 4.4 billion to CHF 14.5 billion, with the company remaining focused on its business long term and strengthening the foundations of future growth, while aiming to achieve organic growth of around 5% for 2015.

Global sales for full-year 2014 were down 0.6% impacted by foreign exchange and reached CHF 91.6 billion ($US97bn), with 4.5% organic growth and 2.3% real internal growth, while its trading operating profit margin rose 10 basis points to 15.3%.

Paul Bulcke, Nestlé CEO said: “These are strong results, building on the good growth of past years and delivered in a soft trading environment. They demonstrate the intrinsic strengths of Nestlé: the commitment of our people, our global footprint, the strength of our portfolio and the quality of our innovation.”

Distribution costs and total marketing and administration expenses both grew by 10 basis points as Nestle increased consumer facing marketing support for its brands.

Real internal growth was 2.3% in the Americas, 2.4% in Europe, and 2.4% in Asia, Oceania and Africa.

Nestle’s performance in North America was affected by the frozen category. Projects are underway to reposition Lean Cuisine, Hot Pockets and Stouffers and address all elements of the marketing mix, reflecting trends such as organic and ethnic.

In Zone Asia, Oceania and Africa, slower growth was due to Nestle’s largest market China and to Oceania, while Nestle continued to see good performances in ambient culinary, ice cream and RTD coffee in China.

Nestlé Waters delivered solid broad-based organic and real internal growth in all three geographies. Nestlé Pure Life continued to be a growth engine, particularly in the emerging markets but also in North America and the UK.

Perrier and S.Pellegrino, Nestle’s premium international brands, continued to demonstrate Nestle’s ability to create value in the category.


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