Record year for Nestlé

Nestlé has reported record results for 2006, with sales climbing to a new high of CHF 98.5 billion, up CHF 7.3 billion or 8.1 per cent. Peter Brabeck-Letmathe, chairman and CEO said Nestlé was seeing the benefits of the group's transformation into a nutrition, health and wellness company, with stronger innovation and branding, as well as improved efficiency.

At the same time, he said, the group was strengthened with the acquisitions of Uncle Tobys, Jenny Craig and Novartis Medical Nutrition, while divesting more commoditised businesses. Competitiveness was further boosted by higher spending on marketing and R&D as well as a savings programme.

He said that for 2007, despite the tough input cost environment, the group again planned to deliver organic growth of between 5 and 6 per cent as well as an EBIT margin improvement.

The financial results show that the main driver of growth was the food and beverages business, which contributed CHF 6.7 billion to the group's CHF 7.3 billion of growth last year. Its sales were up 7.8 per cent to CHF 91.8 billion. Organic growth was 5.9 per cent, with real internal growth at 4.2 per cent, reflecting strong performances over most countries and brands.

At CHF 13.3 billion, the group's EBIT improved by 12.0 per cent, or CHF 1.4 billion, and now stands at 13.5 per cent of sales, an improvement of 50 basis points over 2005. Food and beverages contributed 40 basis points to this increase, with pharmaceutical products, primarily Alcon, accounting for 10 basis points.

Net profit reached a record CHF 9.2 billion, up 13.8 per cent or CHF1.1 billion, to 9.3 per cent of sales. Total earnings per share were up 15.0 per cent, amounting to CHF 23.90 (CHF 20.78 in 2005).