VEVEY, SWITZERLAND — Nestle S.A. is seeking acquisitions, preferably small- to mid-sized acquisitions, after divestments altered the company’s portfolio in 2019.

“On portfolio management, as you know, it’s been a busy year on the divestiture front,” said Ulf Mark Schneider, chief executive officer, in a Feb. 13 earnings call to discuss 2019 fiscal-year results.

He noted acquisition activity was slower.

“I hope that’s going to change now in 2020,” he said. “We already announced through Nestle Health Science the acquisition of Zenpep in January, and we have a few other projects to work on. So I believe that 2020, we’ll see a more balanced view between acquisitions and disposals, but it will continue to be a busy year on portfolio management.”

Nestle in January entered into an asset purchase agreement with Allergan to acquire the gastrointestinal medication Zenpep.

Acquisitions of small- to mid-sized operations are the best way to create value, Mr. Schneider said.

“I wouldn't want to rule out large deals, but clearly, the sweet spot is small- to mid-sized,” he said. “Usually, it’s the much larger integration job, which means more financial certainty, and there typically tends to be much less antitrust risk and antitrust leakage because, typically, you’d get by without any antitrust divestitures.”

Nestle in 2019 sold Nestle Skin Health for 10.2 billion Swiss francs to a consortium led by EQT and a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA). In December, the company reached an agreement to sell its U.S. ice cream business for $4 billion to Froneri, an ice cream-focused joint venture Nestle created in 2016 with PAI Partners. The same month Nestle agreed to sell a 60% stake of Herta to Casa Tarradellas. Nestle and Casa Tarradellas will create a joint venture that includes Herta charcuterie (cold cuts and meat-based products).

Vevey-based Nestle in the fiscal year ended Dec. 31, 2019, posted net profit of 12,609 million Swiss francs ($12,879 million), which was up 24% from 10,135 million Swiss francs in the previous fiscal year. Sales of 92,568 million Swiss francs ($94,553 million) were up 1.2% from 91,439 million Swiss francs in fiscal 2019.

Strong momentum in the United States and Purina PetCare globally supported sales growth. The divestitures affected sales negatively.

A global coffee alliance with Starbucks has led to the roll-out of Starbucks products in more than 40 countries. Nestle originally expected sales of about 250 million Swiss francs of Starbucks products in 2019, Mr. Schneider said. The goal was surpassed as sales came in at over 300 million Swiss francs.

Vegetarian and plant-based food products, including the Sweet Earth Awesome Burger and the Garden Gourmet Incredible Burger, experienced double-digit organic growth in 2019, nearly reaching sales of 200 million Swiss francs.

“We’re growing at double-digit, strong double-digit rates, and the good news is that these growth rates keep accelerating,” Mr. Schneider said.

Nestle has plans for plant-based alternatives to meatballs, chicken nuggets and chicken fillets, he said, and a plant-based tuna salad analogue could be on retail shelves later this year, he said.

In Zone Americas, sales of 33,154 million Swiss francs for the fiscal year were up 7% from 30,975 million Swiss francs in the previous fiscal year. Purina PetCare and beverages were the largest contributors. Gerber baby food returned to growth. New product launches for Häagen-Dazs, Outshine and Drumstick boosted ice cream’s performance. Frozen food posted low single-digit growth behind pizza, Hot Pockets and Stouffer’s.

In Zone Europe, Middle East and North Africa, sales of 18,834 million Swiss francs were down 0.5% from 18,932 million Swiss francs in the previous fiscal year. In Zone Asia, Oceania and sub-Saharan Africa, sales of 21,602 million Swiss francs were up 1.3% from 21,331 million Swiss francs in the previous fiscal year.

The coronavirus will have an effect since China, Nestle’s second-largest market, represented about 8% of the company’s global sales. Nestle has more than 30 factories in China, but most of them have restarted production, Mr. Schneider said.

“So the largest part of these factories are running, albeit they’re running at a lower rate than usual because, as you can imagine, distribution capacity is much, much tighter than usual, and also, some of our employees have not been able to leave their home provinces after Chinese New Year and rejoin us at these manufacturing sites,” he said.

Sales in Nestle Waters dipped 0.8% to 7,821 million Swiss francs from 7,878 million Swiss francs. The decrease reflected pricing pressure in the mainstream segment and soft demand in Europe.

The Other Businesses, which include Nespresso and Nestle Health and previously included the divested Nestle Skin Health, reported sales dropping 9.4% to 11,157 million Swiss francs from 12,323 million Swiss francs.

In 2020, Nestle expects a continued increase in organic sales growth after registering 3.5% organic sales growth in 2019.