Nestlé predicts continued growth in 2019

plastic, plastics, packaging

Growth in North America, China and in infant nutrition has enabled Nestlé to increase its 2018 overall net sales by 2.1 per cent to CHF 91.4 billion ($90.62bn). Net profit also rose by 42 per cent largely thanks to the sale, in January last year, of its US confectionery business to Ferrero for CHF 2.8bn ($2.9bn).

Nestlé expects continued growth for 2019 with a focus on strengthening the company’s key locations and growth categories – namely nutrition, health and wellness. In addition, pet care (Purina performed particularly well in North America and Europe), coffee and Nestlé Health Science will play an important role.

While Nestlé Waters saw 2.1 per cent organic growth, the underlying trading operating profit margin decreased by 200 basis points. According to Nestlé, profitability was hit by higher PET packaging and distribution costs.

Meanwhile, Nestlé has announced a strategic review for Nestlé Skin Health (to be completed mid-2019) and Herta (to be completed by the end of the year). Nestlé will retain and develop its existing Herta branded dough and vegetarian businesses but will look at a potential sale of Herta’s charcuterie business.

This decision forms part of Nestlé’s increased focus on high-growth plant-based offerings. These include the Garden Gourmet range in Europe and plant-based food products under the Sweet Earth brand in the US. Plant-based diets have become increasingly popular as consumers look at different ways to balance their protein intake and lower the environmental footprint of their diets.

In May, Nestlé announced an agreement with coffee chain, Starbucks, that allowed it to market Starbucks consumer and foodservice products globally, outside of the company’s coffee shops. According to Nestlé, the licensed Starbucks business was “smoothly integrated” and the company saw strong demand for its coffee products.

“We are pleased with our progress in 2018,” said Mark Schneider, Nestlé’s chief executive. “We made significant progress with our portfolio transformation and sharpened our Group’s strategic focus… We are on our way to meeting our 2020 targets and positioning Nestlé for sustained and sustainable growth in the years beyond.”

Nestlé has also announced the proposal of Dick Boer, former president and chief executive officer of Ahold Delhaize, and Dinesh Paliwal, president and chief executive officer of Harman International Industries, a subsidiary of Samsung Electronics, for election to its Board of Directors. The elections will take place at Nestlé’s Annual General Meeting on 11 April, 2019.

Two current directors, Jean-Pierre Roth, and Ruth Oniang’o, will retire from the Board, as they have reached the age limit set out in the Board Regulations. The Board also proposes the individual re-election of the Chairman, Paul Bulcke, and the other current members of the Board.