Nestle: 2010 set foundation for future growth

by Eric Schroeder
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VEVEY, SWITZERLAND — Saying its 2010 results “were not the reflection of a single-minded focus on achieving short-term performance, but were achieved whilst investing for the future and laying foundations to shape the future direction of the company,” Nestle S.A. in its 2010 annual report spoke optimistically about continuing on its path to be a leader in nutrition, health and wellness in 2011.

In shaping the future, Nestle in 2010 acquired the frozen pizza business of Kraft Foods Inc., closed the sale of Alcon and created both Nestle Health Science S.A. and the Nestle Institute of Health Sciences.

Nestle’s strong performance during 2010 was evident in its financials as well, as net profit during fiscal 2010 totaled 34,233 million Swiss francs, up sharply from 10,428 million Swiss francs in 2009. Sales, meanwhile, were up 2%, at 109,722 million Swiss francs.

“The strength of our balance sheet means that we do not have to make either/or decisions when we are investing in our own business, acquiring another company or driving our performance, but that we can judge each opportunity on its own merits,” said Peter Brabeck-Letmathe, chairman of the board, and Paul Bulcke, chief executive officer. “This means that we will make appropriate investments and acquisitions in both developed and emerging markets, provided the financials stand up; and that we will drive short-term performance and, at the same time, invest in the longer-term development of our brands and market positions.”

The executives also said Nestle is using its financial resources and technical expertise to invest in countries and communities that are key to the company’s development.

“As an example, we are seeking to improve the security of supply of key ingredients, such as milk, green coffee and cocoa,” they said. “In 2010, we announced our intention to invest 500 million Swiss francs in a wide-ranging plan to address responsible farming, sourcing and consumption across the coffee supply chain. As part of this plan, we intend to deliver over two hundred million high-yielding plants to farmers over the next 10 years. We are also investing over 100 million Swiss francs in an initiative in cocoa with similar objectives around the sustainability of the cocoa industry.”

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