Nestlé SA has reported full-year results for 2018. Total reported sales increased by 2.1% to CHF 91.4 bn (2017: CHF 89.6 bn). Net acquisitions had a positive impact of 0.7% and foreign exchange reduced sales by 1.6%.
The underlying trading operating profit (UTOP) margin reached 17.0%, up 50 basis points. The trading operating profit (TOP) margin increased by 30 basis points to 15.1%, reflecting higher restructuring-related expenses. Earnings per share increased by 45.5% to CHF 3.36 on a reported basis. Underlying earnings per share increased by 13.9% in constant currency and by 13.1% on a reported basis to CHF 4.02.
Mark Schneider, Nestlé CEO, said: "We are pleased with our progress in 2018. All financial performance metrics improved significantly and we saw revived growth in our two largest markets, the United States and China, as well as in our infant nutrition business. Nestlé keeps investing in future growth and – at the same time – has increased the amount of cash returned to shareholders through our dividend and share buyback program. We made significant progress with our portfolio transformation and sharpened our Group’s strategic focus, strengthening key growth categories and geographies in the process.”
Nestlé today announced that it proposes Dick Boer, former President and CEO of Ahold Delhaize N.V., and Dinesh Paliwal, President and CEO of Harman International Industries Inc., a subsidiary of Samsung Electronics Co., Ltd., for election to its Board of Directors.
Confectionery providers in German retail faced declines in both sales and volume in 2018. The Nielsen market research institute reported that proceeds from confectionery sales for the entire year were down by - 1.2% at € 14.295 bn.
Sales channel development was as follows: confectionery sales suffered steep declines at the discount trio Aldi/Lidl/Norma (sales - 4.1%; volume - 6.5%), department stores (- 6.0%; - 6.7%), small supermarkets (- 6.9%; - 5.5%), as well as impulse channels + gas station shops (- 6.7%; - 6.5%). The only bright spot was in small consumer markets (+ 2.4%; + 2.4%).
Salty snacks were the only product group demonstrating sales growth (+ 3.3%). Sales of chocolate products slumped - 1.7%. The sweet baked goods sector (- 2.7%) and the sugar confectionery segment (- 4.0%) were also facing declines.
With top exhibitors like Bosch, Chr. Hansen, GEA or Mettler-Toledo leading a Who’s Who of the industry, ProFood Tech 2019 (26 to 28 March, Chicago) is set to convene 7,000 processing professionals over 125,000 net square feet of exhibit floor.
ProFood Tech has massive support from across market sectors and is unrivalled in its ability to bring the processing industry together and address the most critical issues. The three-day event’s 400 exhibitors will showcase cutting-edge crossover technologies and innovative solutions for professionals from sectors like baking and snacks, confectionery, grains/mill/cereals, fruits and vegetables or ingredients.
Designed to deliver a superior level of flavour and taste solutions, the new 40,000 m2 facility will enable Givaudan to meet growing demand from customers in the food and beverage and health care segments. The new facility will complement the company’s existing plant in Daman, strengthening its capabilities in liquids compounding, powder blending, emulsions, process flavours and spray drying for the India, Nepal and Bangladesh markets. Givaudan expects to employ about 200 people at the new site.
The 2018 business year was also characterized by a gain in market shares and an order intake which increased by 17 % to CHF 3.3 bn. Ebit increased in absolute terms by 13 % to CHF 231 m, which represents an Ebit margin of 7.1 % (previous year: 7.6 %).
Confectionery sales in German retail had not recovered from the heat spell in July and August by the end of the 2018 fiscal year. IRI’s confectionery monitor showed a revenue decline of 1.3% to € 12.819 bn for all of 2018.
Salty snacks continue to be the only product group with revenue growth at 4% to € 3.229 bn and increased sales volume (+ 1.3%) of 408,403 tonnes. Providers of chocolate products (without season) lost value compared with the year prior (- 2.1%; € 5.465 bn) as well as volume (- 3.1%; 543,398 t). In the sweet baked goods and cakes category revenues fell by 4.4% to € 2.177 bn, and volume came in significantly lower with a 6% decline at 414,099 tonnes.
Sugar confectionery products remained far below last year’s figures for both sales (- 3.8%; € 1.949 bn) and volume (- 4.1%; 355,066 t). Market researchers at IRI calculated for the chewing gum segment a sales decline of 2.2% to € 489.9 m and a drop in volume of 2.6% at 343.7 million units.
“Transparency in our supply chains is essential and we will continue to lead in this area,” says Magdi Batato, Executive Vice President, Head of Operations at Nestlé. “Following the public disclosure of our palm oil and pulp and paper supply chains last year, we are now pleased to release supply chain information for soya, meat, hazelnuts and vanilla”.
By mid-2019, Nestlé will also publish the supply chain information for our other priority commodities which include seafood, coconut, vegetables, spices, coffee, cocoa, dairy, poultry, eggs, cereals and sugar. The disclosure includes the list of direct suppliers, upstream locations and country of origins as well as total volume sourced for each commodity.
By joining their complementary forces, Inforum and Barry Callebaut will be able to better serve all customers and segments of the market with high-quality chocolate and compounds as well as world class innovation, and to broaden the reach of their Gourmet & Speciality business. The parties have agreed not to disclose any financial details of the transaction.