Nestle benefited from strong online and retail sales in the 2020 corona year. Consumers stocked up in particular with animal feed, coffee and health products. As a result, the Swiss food multinational grew by 3.6 percent on its own. Nestle exceeded the expectations of the financial community (+3.5 percent). In the final quarter, the manufacturer of Kitkat chocolate, Nespresso coffee and Felix cat food achieved an increase of 3.9 percent.
The strongest growth for the full year was driven by the Purina pet products, as Nestle announced on Thursday. Dairy products grew in the high single-digit range and coffee in the mid-single-digit range.
The sales deal with Starbucks turned out to be a worthwhile investment: Sales of the corresponding products climbed to 2.7 billion francs (2.5 billion euros) and generated additional sales of over 400 million francs in 2020, as stated in the announcement called. Health products also grew at double-digit rates.
The sales increases are mainly achieved through channels such as retail and online trading. Online sales increased by almost half and now contribute 12.8 percent to sales.
The water business, which is heavily dependent on hotels and restaurants, continued to shrink. As recently as Wednesday, Nestle announced the sale of the North American water business to US financial investors One Rock Capital Partners and Metropoulos & Co for $ 4.3 billion (EUR 3.57 billion).
Reported sales fell by 7.9 percent to CHF 84.3 billion due to the sale of parts of the company and the strong Swiss franc. For example, Nestle had sold the skin care business and the US ice cream business.
Nestle earned 17.7 percent of sales at operating profit level, a little more than last year with 17.6 percent. In absolute figures, adjusted operating profit fell by 8.3 percent to CHF 14.9 billion, and net profit by 3.0 percent to CHF 12.2 billion, in line with lower sales and negative exchange rate effects.
The shareholders are to participate in the profits with a dividend of 2.75 francs per share, last year Nestle distributed 2.70 francs per share.
The underlying operating profit margin should also improve “continuously and moderately”. In addition, increases are expected in both underlying earnings per share at constant exchange rates and capital efficiency.