Reporting 4.2% organic growth for 2015, composed of 2.2% real internal growth and price increases averaging 2.0%, Paul Bulcke, chief executive officer of Vevey, Switzerland-headquartered Nestlé, stated on February 18:
“We delivered profitable growth at the higher end of the industry in what is still a challenging environment. This was on the back of consistent performances in previous years. Our organic growth was supported by increased momentum in real internal growth combined with continued margin improvement. Additionally, we grew or maintained market share in the majority of our categories and markets.”
CEO Paul Bulcke reports that Nestlé has successfully turned around its frozen food business in the United States.Commenting on the frozen food and ice cream sectors, he said: “We continued to invest for the future with increased support behind our brands. We kept up the focus on portfolio management, turning around our frozen food business in the United States, disposing of non-core businesses and forging a new partnership to create a leading player in ice cream [with R&R, a leading European ice cream company based in Leeming Bar, North Yorkshire, England].”
Total group turnover – including sales generated by non-food and non-beverage units – amounted to CHF 88.8 billion, with a foreign exchange impact of -7.4%. Acquisitions, net of divestitures, added 0.1% to sales. Organic growth was broad-based across geographies and categories, as follows: 5.8% in the Americas (AMS); 3.5% in Europe, Middle East and North Africa (EMENA); 1.9% in Asia, Oceania and sub-Saharan Africa (AOA).
Real internal growth was also broad-based: 2.4% in AMS; 2.8% in EMENA; 1.2% in AOA. Continued strength was achieved in developed markets with organic growth of 1.9%, and in emerging markets with 7.0%.
Net profit was CHF 9.1 billion. The reduction of CHF 5.4 billion versus the previous year was mostly due to the one-off impact from the disposal in 2014 of part of the L’Oréal stake combined with the revaluation of the Galderma stake. There was also some effect from foreign exchange.
In North America growth increased by 120 basis points, largely led by the turnaround in the frozen meals business. Sales of the new ranges of Lean Cuisine and Stouffer’s brands were strong, supported by positive consumption trends. Pizza’s positive momentum also accelerated, driven by innovation.
“We’re growing faster than the categories, so we’re gaining market share,” said Bulcke.
In ice cream, sales of Häagen-Dazs continued to push growth with new product launches.
In Western Europe, Wagner and Buitoni frozen pizza brands were other growth drivers.
