Focus on health and wellness boosts performance at Nestle S.A.

by Eric Schroeder
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VEVEY, SWITZERLAND — The transition toward an increased focus on health and wellness benefited full-year results at Nestle S.A., as profits rose 14% to 9,197 million Swiss francs ($7,423 million) in fiscal 2006. Sales in the year grew 8% to 98,458 million Swiss francs ($79,478 million).

"2006 was another record year for Nestle," said Peter Brabeck-Letmathe, chairman and chief executive officer. "We are seeing the benefits of the group’s transformation into a nutrition, health and wellness company, with stronger innovation and branding, as well as improved efficiency. At the same time, we strengthened our portfolio with the acquisitions of Uncle Toby’s, Jenny Craig and Novartis Medical Nutrition, while divesting more commoditized businesses.

Mr. Brabeck-Letmathe added that the company was further boosted by stepped-up spending on marketing and research and development, the roll-out of Nestle’s Global Business Excellence program (GLOBE) and shared services, and a commitment to savings programs.

Nestle said its food, beverage and nutrition business in the Americas experienced 7% organic growth during 2006, which compared with 3% growth in Europe and 8% in Asia, Oceania and Africa. In North America, Nestle cited strong performance from its frozen food products, as well as shelf stable dairy and ready-to-drink beverages.

Nestle Waters, which posted sales of 9,616 million Swiss francs in 2006, achieved 8% organic growth during the year, buoyed by sales of Nestle Pure Life and Poland Spring.

In addition to the financial results, Mr. Brabeck-Letmathe said he would be leaving his post as c.e.o. after the company’s April 2008 annual general meeting. Nestle is expected to name a successor in September.

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