ZURICH (SWITZERLAND) – Nestle wants to strengthen organic sales growth aiming for a mid-single-digit rate this year, said the food giant on Thursday, after increase in demand for pet food and health products in the Americas helped to have such growth so as to outshine peers last year.
Throughout the pandemic, consumers have been buying packaged food, which acted as a stimulus for Nestle, which fared better than some rivals by letting go of underperforming businesses and making investments in growth areas such as plant-based food, coffee and health science.
CEO Mark Schneider told reporters on a call, “We’re seeing continued improvement in organic growth for the third year in a row now.”
“There’s a possibility to cross over the 4% point (this year), which would be great, but in light of the uncertainties it’s hard to commit to that right now.”
He said the Swiss group was aiming for sustained mid-single-digit growth in the medium term and was also hopeful of continuing with acquisitions.
Full-year organic sales, which had taken away currency effects, acquisitions and divestitures, grew 3.6% in 2020, before Nestle’s own guidance of “around 3%” and peer Unilever’s 1.9% underlying sales growth.
France’s Danone is likely to announce 2020 results on February 19 with analysts expecting negative like-for-like growth.
Analysts in a consensus compiled by Nestle were looking for 3.5% organic sales growth for the full year.
Net profit fell 3% to 12.2 billion Swiss francs ($13.58 billion), beating expectations for 11.97 billion francs. The year-ago period had benefited from a one-off gain linked to the sale of its skin health business.
The underlying operating margin saw an improvement to 17.7% last year, after reaching 17.6% and thus the group’s mid-term profitability target range of 17.5-18.5% in 2019, a year earlier than planned.
Nestle put forth a proposal for hiking its dividend 5 cents to 2.75 francs per share for 2020, its 26th consecutive increase. It also has a share buyback programme under way.
Shares in Nestle, decreased almost 4% this year, were indicated to open 1.1% lower.
