Nestlé profits from health focus

By staff reporter

- Last updated on GMT

Related tags Ice cream Milk Nestlé

Sales at the group rose to CHF98.5 billion (€60.5bn) while organic
growth was 6.2 per cent and net profit was up 13.8 per cent to a
record CHF9.2 billion (€5.6bn).

The company spent the year shifting focus to strengthen its nutrition, health and wellness portfolio with the acquisitions of Australian cereal business Uncle Tobys, weight management company Jenny Craig and the nutrition group Novartis.

In addition, Nestlé increased its marketing and administration spend by 6.3 per cent last year as well as upping its investment in research and development 16 per cent to CHF1.7 billion (€1.04bn).

Chairman and CEO Peter Brabeck-Letmathe said: "We are 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.

"Our competitiveness was further boosted by higher spending on marketing and R&D, the roll-out of GLOBE and shared service, as well as our commitment to savings programme."

The health theme continued in dairy.

Low-fat versions of existing ice cream brands drove Nestlé's European ice cream sales up during the year, also helping the group take advantage of a record-breaking heatwave in June and July.

There was less cheer for the US ice cream business, which spent the year attempting to reduce margin pressure by going more upmarket.

Shelf-stable dairy products, such as CoffeeMate in the US, grew well and formula products, including Nido, Dancow and Nesvita, helped the firm to five per cent organic growth in its milk products, nutrition and ice cream division.

Nestlé predicts organic growth of between 5 and 6 per cent during the coming year in spite of " continued strong input cost pressure, especially on agricultural raw materials and more investment in brands, R&D and additional capacity aimed at further accelerating the Group's transformation into a nutrition, health and wellness company."

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