Nestle FY16 profit down, sales upStaff Writer | February 16, 2017
Nestle reported a decline in its fiscal 2016 net profit, while trading operating profit improved with higher organic sales.
Nestle Sales of 89.47 billion francs edged up 0.8%
The company projects stable trading operating profit margin in constant currency as it plans to increase restructuring costs considerably in 2017.
Mark Schneider, Nestlé CEO, said, "Our 2016 organic growth was at the high end of the industry but at the lower end of our expectations. We saw a solid trading operating profit margin improvement and our cash flow grew significantly.
"Nestlé continues to invest in future growth and operating efficiency, targeting mid-single digit organic growth and significant structural cost savings by 2020."
For fiscal 2016, profit attributable to shareholders of the parent declined to 8.53 billion Swiss francs from last year's 9.07 billion francs. Earnings per share fell to 2.75 francs from 2.89 francs last year.
The latest results were impacted by several items, the largest one being a one-off non-cash adjustment to deferred taxes.
Underlying earnings per share were 3.40 francs, up 3.4 percent in constant currency.
Trading operating profit increased to 13.69 billion francs from 13.38 billion francs last year. Trading operating profit margin was 15.3%, up 20 basis points on a reported basis and up 30 basis points in constant currency.
Trading operating profit margin went up 20 basis points to 15.3%. In constant currency, trading operating profit margin went up 30 basis points
Sales of 89.47 billion francs edged up 0.8 percent from 88.79 billion francs last year.
Foreign exchange impact was negative 1.6 percent. On an organic basis, sales grew 3.2 percent, with continued strong real internal growth of 2.4 percent. All business segments posted increased organic sales in the year.
Further, the company said that at the Annual General Meeting on April 6, the Board of Directors will propose a dividend of 2.30 francs per share. ■