Nestlé 2014 Net Profit Rises; Aims To Achieve Organic Growth Of Around 5% In 2015

The world’s leading food industry group Nestle yesterday reported full-year results that were broadly in-line with expectations, along with a slight beat on margin. While the company is struggling to hit its medium-term organic growth target of 5-6%, the "Nestle Model", it is nevertheless seeing efficiency gains while investing in its advantaged brands and categories.

In 2014 Nestlé’s organic growth was 4.5%, composed of 2.3% real internal growth and 2.2% pricing. Sales were CHF 91.6 billion, down 0.6%, impacted by negative foreign exchange of -5.5%. Acquisitions, net of divestitures, added 0.4% to sales.

According to Paul Bulcke, Nestlé CEO: "These are strong results, building on the good growth of past years and delivered in a soft trading environment. They demonstrate the intrinsic strengths of Nestlé: the commitment of our people, our global footprint, the strength of our portfolio and the quality of our innovation. While delivering in the short term, we remain focused on our business long term, strengthening the foundations of future growth. We expect 2015 to be similar to 2014 and we aim to achieve organic growth of around 5% with improvements in margins, underlying earnings per share in constant currencies and capital efficiency."

Nestle expects it will be able to deliver organic sales growth of "around 5%" in 2015. The company anticipates another year macroeconomic headwinds and weak consumer sentiment globally. However, Nestle insisted it is taking action to drive consumer engagement and support sales growth. The "Nestle Model" of 5-6% growth remains the overarching medium-term target.