Scale, diversity propel Nestle 2009 results

by Staff
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VEVEY, SWITZERLAND — Nestle S.A.’s profit for fiscal year 2009, ended Dec. 31, 2009, totaled 11,793 million Swiss francs ($10,868 million), equal to 2.92 Swiss francs ($2.70) per share on the common stock. Fiscal 2008 profit was 19,051 million Swiss francs, or 4.87 Swiss francs per share. While the 2009 results may appear to be unfavorable compared to 2008, the company noted they are not comparable, because the 2008 figures include the 9.2 billion Swiss franc profit from the disposal of 25% of Alcon.

On an earnings before interest, taxes, restructuring and impairments (EBIT) basis, Nestle’s 2009 results were 15,699 million Swiss francs ($14,470 million), a slight increase compared with the fiscal 2008 EBIT of 15,676 million Swiss francs. Full-year revenues were 107,618 million Swiss francs ($99,208 million) during 2009, a slight decline compared with 2008 when revenues were 109,908 million Swiss francs.

“We stepped up investment in our brands and the pace of our innovation, adapted our products to the changing needs of consumers and further accelerated efficiencies,” said Paul Bulcke, chief executive officer. “These actions, together with the disciplined alignment of our people behind clear strategic priorities, allowed us to again combine a strong top- and bottom-line performance in 2009, coming on top of excellent results in 2008.

“Our 2009 performance was broad-based across all categories and regions and demonstrates our ability to deliver in the short term whilst continuing to invest for the long term. For 2010, I expect our Food and Beverages business to achieve higher organic growth than in 2009 and a further EBIT margin increase in constant currencies. This confidence is also reflected in our increased dividend proposal as well as our share buyback plans for the year.”

Nestle’s Food and Beverage division sales were 99,798 million Swiss francs and EBIT was 13,083 million Swiss francs. For fiscal 2008 revenues were 102,384 million Swiss francs, and EBIT was 13,103 Swiss francs.

The company also announced it intends to buyback an additional 10 billion Swiss franc program with the intent to buy back an additional 5 billion Swiss franc shares of Nestle stock before the end of this year. The company is currently in the process of completing its 25 billion Swiss franc share buyback program that was launched in 2007. That program requires the company to buy 5 billion Swiss franc shares of stock during 2010. Once that program is complete the company will initiate the new buyback program.
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