Nestle booked a drop in 2013 earnings and issued a cautious outlook for 2014 this morning (13 February), prompting shares to slide in early trade.
The Swiss food giant said operating profit in the year to the end of December fell 2.4% to CHF13.06bn (US$14.61bn). Net profit slid 2.1% to CHF10.45bn.
Go deeper with GlobalData
However, Nestle emphasised that trading profit – which excludes certain operating expenses – rose during the period. Trading operating profit in 2013 totalled CHF14bn, up from CHF13.46bn in the comparable period of last year. This represents a margin of 15.2%, up 20 basis points – or 40 bps excluding currency exchange.
Sales increased 2.7%, climbing to CHF92.2bn. Revenues felt a 3.7% drag from foreign exchange. Organic sales were up 4.6%.
Looking to the coming year, Nestle sounded a cautious note on the trading outlook. “Last year was challenging and 2014 will likely be the same… We therefore expect our 2014 performance to be similar to last year and again weighted to the second half,” Nestle said.
See Also:
Nevertheless, the group added it expects to “outperform the market” with sales growth of around 5% and improvements in margins, underlying earnings per share in constant currencies and capital efficiency.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataKepler Cheuvreux analyst Jon Cox said the result was “roughly in line with expectations”. However, he added the company “did not announce a buyback, as some had speculated, particularly following the L’Oreal partial stake sale”.
Shares in Nestle were down 1.64% at 10:34 GMT.
Click here for coverage of Nestle’s media call held after the results were published.
For a round-up of what analysts thought of Nestle’s numbers, click here.
Read here for editor Dean Best’s take on the transactions Nestle announced with L’Oreal this week.
—–
Over the next fortnight, we’d like to hear how you see the outlook for your business in 2014.
Now in its third year, the just-food Confidence Survey provides a snapshot of how you and your colleagues in the industry see the year unfolding. The latest survey is live and takes just a few moments to fill in.
In the coming weeks, we’ll be reporting on the highlights from the survey in a free webinar live on just-food.com.
As a thank you for filling in the survey, you’ll receive an executive summary detailing the results.
