Lowest turnover growth since 2009 for Nestlé | RetailDetail

Lowest turnover growth since 2009 for Nestlé

Lowest turnover growth since 2009 for Nestlé

Swiss food concern Nestlé has had to deal with considerably lower turnover growths last year, mainly as a result of lower demand in China. There was a huge profit growth though, because the company has sold its stake in L'Oréal.

Turnover growth pressurized

The world's largest food group's turnover grew 4.5 %, autonomously (excluding divestments and exchange rate fluctuations), to 91.6 billion Swiss francs, which is around 85 billion euro. That is the company's lowest turnover growth since 2009, its Belgian CEO Paul Bulcke admitted.

 

On top of that, these numbers mean that Nestlé has missed its own long-term goal of a yearly 5 % turnover growth for the second year running. The food industry is facing a highly challenging worldwide market, due to the extremely volatile and highly competitive Western market, economic issues in Russia and Ukraine, unrest in the Middle-East and changing Chinese consumer behaviour.

 

Growth slowed down the most in the Asia-Africa region, down from a 5.6 % growth in 2013 to 2.6 % in 2014. "Slower growth in that region mainly comes down to our largest market, China", the company based out of Swiss Vevey said. Turnover in the American region grew 5 % and 1.5 % in Europe, both organically.

 

Looking at its separate branches, Nutrition experienced the biggest growth (+ 8.7 %), followed by Petcare (+ 5.6 %), Powdered and Liquid Beverages (+ 5.4 %) and Milk Products and Ice Cream (+ 3.4 %). Prepared Dishes and Cooking Aids was the only division to experience negative growth (- 0.1 %).

 

Sizable profit growth

The company, which owns brands like KitKat, Maggi, Nespresso, Nescafe, did manage a huge profit growth in 2014, thanks to the sale of its stake in L'Oréal. Net profit reached 14.5 billion Swiss francs (nearly 13.5 billion euro), a 45 % increase compared to 2013 and way better than analysts' predictions of 10.3 billion francs.

 

All in all, Paul Bulcke is satisfied with the company's performance: "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."

 

He expects "2015 to be similar to 2014" and aims to "achieve organic growth of around 5% with improvements in margins, underlying earnings per share in constant currencies and capital efficiency."

Questions or comments? Please feel free to contact the editors


Adidas wants to strengthen bond with small retailers

15/07/2018

German sportswear giant Adidas says it wants to strengthen its bond with small-scale retailers after they claimed Adidas is too aggressive in pushing its web shop, especially as they feel the brand is favouring large international chains as well.

Several candidates to take over Men at Work

12/07/2018

There are several takeover candidates for both the Dutch and the Belgian stores of the bankrupt clothing chain Men at work. The curator is confident an agreement should be reached today in Belgium.

Burberry sales increases thanks to new strategy

11/07/2018

The new strategy of the British fashion brand Burberry starts to render: the company had a 3% increase of revenue in their own stores last quarter. In total, Burberry has now a revenue of 479 million pounds (520 million euros).

FNG moves to Brussels stock exchange

06/07/2018

Belgian fashion group FNG has collected 60 million euros by issuing new shares. The new shares will be traded on the Amsterdam Stock Exchange and - for the first time - on the Brussels Stock Exchange as well.

Athleteshop ends its run

02/07/2018

Dutch sports web shop Athleteshop has filed for bankruptcy, after an abysmal year in which strings of complaints led to all sorts of problems. Social media and review sites were flooded with customers complaining about late deliveries.

Alibaba goes Turkish with stake in Trendyol

29/06/2018

Alibaba is the new strategic partner of Trendyol, one of the best-known e-commerce companies in Turkey. With this partnership, the Chinese retailgroup strengthens its presence in Europe.