Nestlé reports full-year results for 2018

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In Summary

⇒Organic growth of 3.0%, with continued strong real internal growth (RIG) of 2.5% and pricing of 0.5%. Growth was supported by stronger momentum in the U.S. and China, as well as in infant nutrition.

⇒Total reported sales increased by 2.1% to CHF 91.4 billion (2017: CHF 89.6 billion). Net acquisitions had a positive impact of 0.7% and foreign exchange reduced sales by 1.6%.

⇒The underlying trading operating profit (UTOP) margin reached 17.0%, up 50 basis points. The trading operating profit (TOP) margin increased by 30 basis points to 15.1%, reflecting higher restructuring-related expenses.

⇒Earnings per share increased by 45.5% to CHF 3.36 on a reported basis. Underlying earnings per share increased by 13.9% in constant currency and by 13.1% on a reported basis to CHF 4.02. Free cash flow of CHF 10.8 billion, up 15%.

⇒Proposed dividend increase of 10 centimes to CHF 2.45 per share. Nestlé intends to complete the current CHF 20 billion share buyback program six months ahead of schedule by the end of 2019, reflecting the strong free cash flow generation.

⇒During 2018, CHF 13.9 billion were returned to shareholders through dividends and share buybacks. Nestlé will explore strategic options for the Herta charcuterie (cold cuts and meat-based products) business as a further step in positioning the portfolio towards attractive high-growth categories.

⇒2019 Outlook: continued improvement in organic sales growth and underlying trading operating profit margin towards our 2020 targets. Underlying earnings per share in constant currency and capital efficiency are expected to increase.

Mark Schneider, Nestlé CEO, said: “We are pleased with our progress in 2018. All financial performance metrics improved significantly and we saw revived growth in our two largest markets, the United States and China, as well as in our infant nutrition business.

Nestlé keeps investing in future growth and – at the same time – has increased the amount of cash returned to shareholders through our dividend and share buyback program. We made significant progress with our portfolio transformation and sharpened our Group’s strategic focus, strengthening key growth categories and geographies in the process. Our unique Nutrition, Health & Wellness strategy, with food, beverage and nutritional health products at its core, has become much clearer as we completed a sizeable number of transactions and announced strategic reviews for Nestlé Skin Health and Herta. In 2018, we upgraded our innovation engine notably to ensure continued technology leadership and a shorter time to market. In the fast-changing food and beverage space Nestlé has what it takes to truly excite consumers with meaningful innovation and must-have products. We reaffirmed our sustainability leadership at a time when consumers and regulators around the world are increasingly looking for solutions to today’s environmental and societal problems. Our decisive action and strong commitments to tackle the global packaging waste problem are a case in point. We are on our way to meeting our 2020 targets and positioning Nestlé for sustained and sustainable growth in the years beyond.”

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