Downturn fails to dampen Nestlé numbers

Nestlé remains resilient swissinfo.ch

The world's biggest food group, Nestlé, has reported a better-than-expected increase in net profit for 2001 and predicts further growth for the current year.

Net profit was up 15.9 per cent to SFr6.68 billion ($3.91 billion) with group sales up 4.1 per cent to SFr84.76 billion.

The Vevey-based company said real internal growth – its own benchmark which strips out the impact of price changes, acquisitions and exchange rate fluctuations – rose 4.4 per cent. This was above analysts’ expectations and the firm’s own four per cent target.

“You can imagine that we are very happy with our performance of 2001… particularly in light of the monetary, political and economic upheavals of last year. I think it shows the strength that this company has achieved over the last couple of years,” Nestlé CEO Peter Brabeck told swissinfo.

Brabeck attributed Nestlé’s consistent profit and sales performance to the company’s long-term strategy.

“Even last year, although we had very good growth, we still invested in marketing and R & D substantially. We have been able to increase our market share and we have a pipeline of innovative products that should allow us the confidence again for 2002 and the years after.

“I think it is our consistent long-term approach which assures a constant topline and bottomline growth,” he added.

Increased dividend

The firm is proposing a dividend of SFr6.40 per share, up from SFr5.50 last year.

Among other products, Nestlé makes Nescafé, Perrier water and several breakfast cereals. Last year, it concluded a deal to purchase Ralston Purina, strengthening its position in the pet food sector. Nestlé employs almost a quarter of a million people and has around 500 factories worldwide.

“2002 will be characterised by the integration of the Ralston Purina business. We have identified $260 million of synergies which we want to get before the end of 2003 and that means we have to fight for it,” Brabeck said.

“We also have to concentrate on the integration of the North American ice cream business and I’m very pleased that we received earlier this week permission from the European Commission to integrate the German Schöller ice cream business into Nestlé.”

On Thursday, the company also announced the purchase of the Brazilian chocolate and confectionary manufacturer, Garoto. Garoto operates two plants with a staff of 2,500 and generates sales of about SFr310 million.

“The acquisition of Garoto announced today will catapult us to the number one chocolate producer in the huge Brazilian market,” Brabeck commented.

by Robert Brookes with agencies