Nestle Global sales up 3.5 percent in 2019

Aurel Constantin 17/02/2020 | 08:52

Nestle Global recorded an organic growth of 3.5 percent in 2019, with a real internal growth (RIG) of 2.9 percent and pricing of 0.6 percent. Growth was supported by strong momentum in the United States and Purina PetCare globally.

Total reported sales increased by 1.2 percent to CHF 92.6 billion (2018: CHF 91.4 billion). Net acquisitions had a negative impact of 0.8 percent and foreign exchange reduced sales by 1.5 percent. The underlying trading operating profit (UTOP) margin increased by 60 basis points to 17.6 percent. The trading operating profit (TOP) margin decreased by 30 basis points to 14.8 percent due to increased restructuring and related expenses. Free cash flow increased by 10.9 percent to CHF 11.9 billion.

Nestlé divested Nestlé Skin Health in 2019 and announced the sale of its U.S. ice cream business for USD 4 billion to Froneri (transaction closed January 31, 2020). Nestlé also agreed to sell a 60 percent stake in its Herta charcuterie (cold cuts and meat-based products) business to Casa Tarradellas. Portfolio rotation over the past three years amounts to 12 percent of total 2017 sales.

The outlook for 2020 shows continued increase in organic sales growth, expecting further acceleration in 2021/2022 towards sustainable mid-single-digit growth. Underlying trading operating profit margin with continued improvement.

 “We saw strong progress in 2019, with key operating and financial metrics improving significantly for the second consecutive year. Organic growth accelerated, fueled by strong momentum in the United States and Purina PetCare globally. In 2019, we made significant progress in our portfolio transformation. We will respond to rapid changes in the industry and fast-evolving consumer preferences to position our portfolio for higher growth”, said Mark Schneider, Nestlé CEO.

Zone Europe, Middle East and North Africa (EMENA)

  • 2.7 percent organic growth: 4.2 percent RIG; -1.5 percent pricing.
  • Western Europe posted strong RIG and positive organic growth. Pricing was negative.
  • Central and Eastern Europe maintained mid-single-digit organic growth with strong RIG. Pricing was slightly negative.
  • Middle East and North Africa saw mid-single-digit organic growth based on strong RIG and flat pricing.
  • The underlying trading operating profit margin grew by 20 basis points to 18.9 percent.
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