Nestlé has this morning posted a 12.9% rise in operating profit for 2007, as sales rose across all of the Swiss food giant’s product categories.
The world’s largest food maker booked EBIT of CHF15bn (US$13.7bn) on the back of a 9.2% rise in turnover to CHF107.6bn.
Price increases, brought in to offset rising commodity costs, contributed to 3% of the rise in turnover, while underlying sales rose by 4.4%.
Chairman and CEO Peter Brabeck-Letmathe hailed Nestlé “milestone performance” over the last year.
“Our success is now driven more by our capacity to innovate and use our R&D pipeline to launch new, added-value products and services, than by raw material prices or the economic climate,” he said.
Nestlé said its revenue in Europe rose 3%, driven by growth in Russia and Poland, although the company noted its chocolate sales in the UK.
In the Americas, Nestlé’s largest market, revenue climbed 8.1%, thanks to growth from what the company calls its “popularly positioned products” – goods aimed at lower-income consumers in the developing world.
In Asia, Oceania and Africa, sales rose 8.8%, as Nestlé managed to offset rising milk costs with selected price increases. Margins in the region slipped, however, with Nestlé blaming a change in its distribution model in Japan and “the specific situation of a key customer” in Australia.
Last year’s acquisition of US nutrition business Gerber helped drive a 9.7% rise in sales from Nestlé’s nutrition arm.
Nestlé’s Nutrition was one of the company’s top performers by category. Its powdered and liquid beverages business saw sales rise 10.3. Nestlé’s two largest product categories – milk products and ice cream and prepared dishes – saw sales climb 7.8% and 4% respectively.
Brabeck-Letmathe added: “We have, over time, created powerful momentum which will deliver profitable growth for years to come.”