Nestle today (22 February) restated its 2010 sales as part of the Swiss food company’s adoption of a new accounting method to make its financial results more comparable to its competitors.
The world’s largest food maker, which published its 2010 numbers last week, set out its revised sales for last year in a presentation to investors today.
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Last week, Nestle reported annual sales of CHF109.7bn (US$116.89bn). The revised figure, which Nestle dubbed in its presentation as “net, net sales”, stood at CHF93bn now that the company is using the IAS accounting method.
The change sees Nestle deduct trade spend – including discounts and certain allowances and promotions to retailers – from its proceeds of sales, rather than the marketing line.
Nestle has also decided to stop reporting a figure for EBIT and change to stating its trading operating profit.
The company said trading operating profit would be struck after cost of goods, distribution, marketing, admin and R&D costs but also after other trading income and expenses – including restructuring charges.
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By GlobalDataNestle’s operating profit would then be struck after “other” income and expenses, including proceeds from the disposal of businesses.
“Net, net sales and trading operating profit align us more closely with our peers,” Nestle said.
The change in how Nestle’s sales are accounted also leads to its Europe accounting for a lower proportion of sales as the change has more of an impact on the company’s operations in western Europe.
Under the new measure, Europe generated 19% of Nestle’s 2010 sales from continuing operations, down from 21% under the previous method.
