SWITZERLAND: Nestle Waters FY sales drop, margins improve
- Nestle Waters sales down by 9.5% to CHF6.52bn (US$7bn)
- Organic water sales up by 5%
- Group net profits sink 72% to CHF9.5bn due to discontinued operations
- Group net sales down by 10% to CHF83.6bn
Nestle Waters has seen its full-year net sales drop by almost one tenth, despite strong growth in emerging markets.
Figures released by Nestle today (16 February) show that Nestle Waters' net sales fell by 9.5% to CHF6.52bn (US$7bn) for the 12 months to the end of December. Despite some signs of improvement, the drop shows that the firm's bottled water business had a mixed 2011.
Nestle highlighted that its water sales rose by 5% on an organic basis, which excludes one-off charges, gains and currency swings between 2011 and 2010. The group reported strong global growth for the Pure Life brand, driven by emerging markets, where sales exceeded CHF1bn. Nestle also reported market share gains in Europe and retail channel growth in the US.
Trading operating profits margin in water rose by 0.9 percentage points versus 2010. This was due to pricing, emerging markets growth and "rigorous cost management, especially in Europe", the firm said.
Still, the fall in bottled water net sales proved a drag at group level. Nestle's global net sales dropped by 10% to CHF83.6bn for the 12 months. Based on continuing operations, sales fell by around 5% on the previous year.
On the same basis, operating profits increased by 2.7% to CHF12.47bn. On a reported basis, operating profits fell by almost 68%, reflecting CHF26.7bn in discontinued operations between 2010 and 2011, including the disposal of a stake in eyecare business Alcon.
For a similar reason, net profits for the year attributable to Nestle shareholders slid by 72% to CHF9.5bn. Based on continuing operations, however, net profits rose by 8% on 2010.
Nestle issued a solid outlook for 2012 after a year of increased underlying group sales and profits.
The French food and beverage maker said it did not "expect 2012 to be any easier than previous years" but insisted it was "well positioned to deliver the Nestle model" of organic growth of 5-6% and an improvement in trading operating profit margin and underling earnings per share at constant currencies.
To view the company's figures, click here.
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