Net income for 2015 stood at 9.1 billion francs ($9.1 billion), lower than the 9.8 billion francs forecast by analysts and down from 14.5 billion francs in 2014.
The company said the lower net profits were “mostly due to the one-off impact from the disposal in 2014 of part of the L'Oréal stake”, which boosted revenues in that year.
The French cosmetics firm in 2014 bought back an eight-percent stake that Nestlé owned in L'Oréal, boosting the share of the family of heiress Liliane Bettencourt in the company to 33.3 percent.
Sales of 88.8 billion francs were 7.7 percent lower because of the impact of the strong franc.
But the Vevey-based firm said organic growth, the real measure of a company's performance, was good at 4.2 percent and was “supported by increased momentum in real internal growth combined with continued margin improvement,” according to chief executive Paul Bulcke.
“In 2015 we delivered profitable growth at the higher end of the industry in what is still a challenging environment,” Bulcke said in a statement.
Investors responded negatively to the financial report driving down Nestle's share price more than three percent to 71.70 francs by early afternoon trading.