Nestle profit up 8% in year, but challenges ahead

by Staff
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VEVEY, SWITZERLAND — Nestle S.A. posted a profit of 9.5 billion Swiss francs ($10.2 billion) in fiscal 2011, up 8% from fiscal 2010, but the Vevey-based company said 2012 may be a difficult year.

“We delivered good performance, top and bottom line, in both emerging and developed markets in 2011,” said Paul Bulcke, chief executive officer. “It was a challenging year, and we do not expect 2012 to be any easier. We have continued to invest for the future and strengthen our capabilities across the world. We have established new partnerships in China. Nestle Health Science has got off to a good start. Our innovation is creating opportunities in all categories, whether bringing new consumers to our brands in emerging markets or building on our consumers’ engagement with our brands in the developed world. Our people are aligned behind our strategic roadmap, which is as relevant in today’s new reality as ever, to drive sustainable performance improvement. We are therefore well-positioned in 2012 to deliver the Nestle model of organic growth between 5% and 6% as well as an improved margin and underlying earnings per share in constant currencies.”

Sales for the year were 83,642,000,000 Swiss francs ($90 billion), down sharply from the previous year when revenue was 104.6 billion Swiss francs.

The Zone Americas segment had sales of 26,756,000,000 Swiss francs ($28.8 billion). Nestle said the company’s North American pizza business strengthened its lead over the competitors with a good performance by DiGiorno. Meanwhile, the company’s ice cream business benefitted from growth in snacks in the Haagen-Daaz and Skinny Cow brands.

“In view of continuing economic uncertainties and volatility, we don’t expect 2012 to be any easier than previous years,” the company said. “But we continue to invest for the future and strengthen our capabilities across the world.”

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