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February 17, 2011

SWITZ: Nestle shares rise after “strong” 2010 results

Shares in Nestle, the world's largest food maker, rose this morning (17 February) after the Swiss food giant reported what it dubbed as a "strong" performance in 2010.

Shares in Nestle, the world’s largest food maker, rose this morning (17 February) after the Swiss food giant reported what it dubbed as a “strong” performance in 2010.

The company booked net profit of CHF34.23bn (US$35.7bn), more than triple the CHF10.43bn it posted last year, thanks to the disposal of its remaining shares in eyecare company Alcon. However, net profit from continuing operations fell in 2010, reaching CHF8.78bn, compared to CHF9.26bn in 2009.

Nevertheless, EBIT was up on a reported basis – rising from CHF15.7bn to CHF16.19bn – and when measured from continuing operations. On that basis, EBIT was CHF14.04 in 2010, against CHF13.22bn in 2009.

Group sales climbed 6.2% on an organic basis to CHF109.7bn. The “real internal growth” of Nestle’s group sales – a company measure that excludes pricing, currency exchange and acquisitions – was 4.6%. EBIT margin rose 20 basis points, although Nestle said the figure could not be compared to 2009 due to the Alcon disposal.

When looking at Nestle’s continuing operations, the company’s sales rose 6% on an organic basis to CHF104.6bn. Real internal growth was 4.4%. EBIT margin, meanwhile, was up 30 basis points to 13.4%.

CEO Paul Bulcke said: “In 2010, we delivered another year of strong top and bottom line growth, outperforming the market.”

Looking to 2011, the Nestle chief noted “volatile” commodity costs but insisted: “We are starting 2011 with continued momentum, well placed to face uncertainties ahead, including volatile raw material prices. We are therefore confident of achieving the Nestle Model in 2011: organic growth between 5% and 6% and an EBIT margin improvement in constant currencies.”

Shares in Nestle were up 1.5% at CHF53.25 at 09:52 CET today.

Click here for the full statement from Nestle. Check back later for further coverage and insight from just-food on the company’s results.

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