Beverage Industry

Nestlé reports good performance in 2012

February 14, 2013

Nestlé S.A., Vevey, Switzerland, reported a positive sales increase of 10.2 percent, reaching $99.9 billion in fiscal year 2012. Organic growth rose 5.9 percent and was composed of 3.1 percent real internal growth and 2.8 percent pricing.

In North America, the coffee and creamers businesses performed well, the company notes. The Coffee-Mate liquid range, including Natural Bliss, was the highlight in creamers, while Nescafé Clásico was the growth driver in soluble coffee.

In emerging markets including Africa, China, the Middle East and Indonesia, the company achieved double-digit growth. Strong contributions came from powdered beverages, predominantly the Milo brand, and culinary segments, as well as chocolate, ice cream and ready-to-drink beverages, it states.

The Nestlé Waters division achieved 6.4 percent organic growth and 4.9 percent real internal growth, reaching sales of $7.8 billion. In 2012, Nestlé Waters continued to perform well, further strengthening its position in developed markets in North America and Europe and increasing the scale of its operations in emerging markets, the company reports.  It was helped by strong sales of premium brands, such as S.Pellegrino and Perrier. Furthermore, Nestlé Pure Life reinforced its leading position globally with strong double-digit top line growth, confirming healthy hydration as core to the bottled water category growth.
 
In North America, regional brands including Poland Spring, Ice Mountain and Zephyrhills benefited from growth in the category. The "Home & Office" business also performed well, the company adds.
 
Emerging markets also grew dynamically for Nestlé Waters, with double-digit growth in Turkey, Egypt, Mexico and Thailand, among others.

Nestlé’s Nespresso business delivered a strong performance, showing double-digit growth. The segment continued to reinforce its position in Europe and expanded its presence at an accelerated pace in Asia Pacific and the Americas, the company reports. Innovations included five new Grand Cru coffees and two new machines, Maestria and U. The boutique network saw 52 new openings to pass 300 locations in 48 countries, and new services were launched for Nespresso Club Members. Nespresso sourced more than two-thirds of its green coffee through its unique AAA Sustainable Quality program and reached its 75 percent recycling capacity commitment one year ahead of schedule.

In 2012, the Nestlé Group's growth was broad-based across all categories and geographies, with 5.9 percent organic growth in the Americas, 2.4 percent in Europe, and 10.3 percent in Asia, Oceania and Africa.

In emerging markets, the company grew 11 percent, achieving sales of $42.6 billion. To enhance its position as a trusted leader in nutrition, health and wellness, Nestlé continued to reformulate products to make them healthier and tastier. It leveraged its research and development capabilities to deliver good nutrition and develop solutions to help people manage diet-related illnesses and continued to build partnerships with organizations active in the fight against non-communicable diseases. Additionally, the company acquired Wyeth Nutrition and a number of new capabilities for Nestlé Health Science. It also inaugurated the Nestlé Institute of Health Sciences, added two new research and development (R&D) units in China, a new R&D center in India, and a global center for clinical trials in Switzerland.
 
In the Americas, sales reached 31.3 billion, the company reports. Organic growth increased 5.2 percent, and real internal growth increased 0.6 percent.

"In 2012, we delivered on our commitment: a good, broad-based performance building upon the profitable growth achieved consistently over previous years,” said Paul Bulcke, chief executive officer of Nestlé, in a statement. “All our businesses, both in developed and in emerging markets, contributed. Our nutrition, health and wellness agenda continued to bring enhanced benefits for consumers, greater brand differentiation in the marketplace, and increased value for shareholders. With creativity and innovation, our people laid the foundations for future growth.”

For 2013, Nestlé expects to deliver organic growth between 5 and 6 percent together with an improved trading operating profit margin and underlying earnings per share in constant currency, as well as improvement in its capital efficiency.