Global food group Nestle said 2013 looks every bit as “challenging” as 2012, a year when profits increased but underlying sales growth slowed.
The Swiss food giant reported a 11.8% increase in earnings of CHF10.61bn (US$12.02bn) in 2012. Operating profit reached CHF13.93bn, up 11.7% on the prior year.
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Net sales climbed 10.2% to CHF92.17bn. However, there was a slowdown in the rate of growth of Nestle’s underlying sales.
On an organic basis, which includes price increases, sales were up 5.9% in 2012. Nestle’s organic sales rose 7.5% in 2011.
The company also uses a sales measure called “real internal growth”, which excludes M&A, price increases and currency movements. By that metric, sales were up 3.1%, compared to an increase of 3.9% in 2011.
“The environment looks to be every bit as challenging in 2013 as it was in 2012,” said chief executive Paul Bulcke. “But 2013 will again provide opportunities to leverage our competitive advantages [and] deliver on our growth opportunities.”
Bulcke said Nestle still expects to meet its standard outlook for a 5% to 6% increase in underlying sales, as well as improved margin and underlying earnings per share in constant currencies.
Shares in Nestle were down 2.09% at CHF63.20 at 09:54 CET.
For Nestle’s comments in today’s media conference on “challenges” in North America, click here. For the company’s reaction to analyst concerns over slowing sales in emerging markets, click here.
