Nestlé reports sharply higher profits for 2012

The world’s largest food company, Swiss-based Nestlé, on Thursday reported net profits of 10.6 billion francs for 2012, up 11.6 percent from the previous year.

Nestlé reports sharply higher profits for 2012
Nestlé headquarters in Vevey, overlooking Lake Geneva. Photo: Nestlé

The results of the company, headquartered in Vevey, in the canton of Vaud, were slightly better than analysts' forecasts.

Sales at the group — known for products such as Nespresso coffee capsules or Maggi stock cubes — rose by 10.2 percent to hit 92.2 billion francs.
Analysts had tipped Nestlé to post a net profit of 10.5 billion francs, but the group's sales figure tallied with market-watchers' forecasts.
"In 2012 we delivered on our commitment: a good, broad-based performance building upon the profitable growth achieved consistently over previous years," Paul Bulcke, Nestlé's Belgian chief executive, said in a statement.

The group's said that its organic growth was 5.9 percent, and that it was broad-based across all categories and locations.

The figure was 5.9 percent in the Americas, 2.4 percent in Europe and 10.3 percent in Asia, Oceania and Africa.
Price rises contributed 2.8 percent of the group's growth.

"Despite the many challenges 2013 will no doubt bring, we expect to deliver the Nestle model of organic growth between 5 percent and 6 percent as well as an improved margin and underlying earnings per share in constant currencies," said Bulcke.

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‘Unlimited resources’: Switzerland’s Nestle goes vegan

Swiss food giant Nestle, which has made billions with dairy products, said Monday it will host start-ups that want to develop vegetarian alternatives.

'Unlimited resources': Switzerland's Nestle goes vegan

Nestle could thus find itself at the forefront of a sector that has strong growth potential, an analyst commented.

It plans to open its research and development (R&D) centre in Konolfingen, Switzerland to “start-ups, students and scientists” a statement said.

In addition to testing sustainable dairy products, the group plans to encourage work on plant-based dairy alternatives, it added.

Chief executive Mark Schneider was quoted as saying that “innovation in milk products and plant-based dairy alternatives is core to Nestle's portfolio strategy.”

The group unveiled a vegetable-based milk that had already been developed with the process, and technical director Stefan Palzer told AFP it planned to focus on 100-200 such projects a year.

Jon Cox, an analyst at Kepler Cheuvreux, noted that while Nestle had missed some consumer trends in the past, it has now “taken something of a lead in the plant-based alternative market for food”.

And “given its pretty much unlimited resources, Nestle is going to come out one of the winners in the space,” Cox forecast in an e-mail.

Nestle said that “internal, external and mixed teams” would work at the R&D centre over six-month periods.

Nestle would provide “expertise and key equipment such as small to medium-scale production equipment to facilitate the rapid upscaling of products for a test launch in a retail environment,” it added.

The Swiss food giant has long been known for its dairy products, but faced a boycott in the 1970s for allegedly discouraging mothers in developing countries from breastfeeding even though it was cheaper and more nutritious than powdered formula.

On Monday, the group's statement also underscored that the research initiative was part of its commitment to help fight global warming.

“As a company, we have set ambitious climate goals. This is part of our promise to develop products that are good for you and good for the planet,” it said.