Nestlé reports full-year results for 2019

Nestlé reports full-year results for 2019
26 Feb 2020

Organic growth of 3.5%, with real internal growth (RIG) of 2.9% and pricing of 0.6%. Growth was supported by strong momentum in the United States and Purina PetCare globally.

  • Total reported sales increased by 1.2% to CHF 92.6 billion (2018: CHF 91.4 billion). Net acquisitions had a negative impact of 0.8% and foreign exchange reduced sales by 1.5%.
  • One year ahead of Nestlé’s medium-term plan, the company reached its 2020 profitability target range. The underlying trading operating profit (UTOP) margin increased by 60 basis points to 17.6%. The trading operating profit (TOP) margin decreased by 30 basis points to 14.8% due to increased restructuring and related expenses.
  •     •    Underlying earnings per share increased by 11.1% in constant currency and by 9.8% on a reported basis to CHF 4.41. Earnings per share increased by 28.0% to CHF 4.30 on a reported basis.
  •     •    Free cash flow increased by 10.9% to CHF 11.9 billion.
  •     •    Board proposes dividend increase of 25 centimes to CHF 2.70 per share, marking 25 consecutive years of dividend growth. In total, CHF 16.9 billion was returned to shareholders in 2019 through a combination of dividend and share buybacks. At the end of 2019, Nestlé completed the CHF 20 billion share buyback program initiated in July 2017. It started a new share buyback program of up to CHF 20 billion in January 2020.
  •     •    Nestlé divested Nestlé Skin Health in 2019 and announced the sale of its U.S. ice cream business for USD 4 billion to Froneri (transaction closed January 31, 2020). Nestlé also agreed to sell a 60% stake in its Herta charcuterie (cold cuts and meat-based products) business to Casa Tarradellas. Portfolio rotation over the past three years amounts to 12% of total 2017 sales.
  •     •    2020 Outlook: continued increase in organic sales growth, expecting further acceleration in 2021/2022 towards sustainable mid single-digit growth. Underlying trading operating profit margin with continued improvement. Underlying earnings per share in constant currency and capital efficiency expected to increase. It is too early to quantify the financial impact of the coronavirus outbreak at this time.