2019 overview: Nestlé, Bühler and DSM issue full-year results

13 Feb 2020 --- Industry giants Nestlé, DSM and Bühler have released their respective annual financial overviews for 2019. Among significant developments in 2019, Nestlé announced the sale of its US ice cream business and Herta charcuterie. DSM appointed a new CEO and Bühler reported upswings in its meat alternatives and malting segments. Meanwhile, close attention is being paid by the companies to the ongoing global coronavirus (COVID-19) threat.

In 2019, Nestlé reported an accelerated organic growth, fueled by strong global momentum in the US and Purina PetCare brand. Total reported sales increased by 1.2 percent to CHF 92.6 billion (US$94.8 billion). Meanwhile, net acquisitions had a negative impact of 0.8 percent and foreign exchange reduced sales by 1.5 percent.

“Nestlé will continue to focus on growth. The launch of our premium Starbucks products, for example, has been successful. We are pleased with the speed of the product rollout and the positive response by consumers. The company is fully embracing the need for speed, as the expansion of our new plant-based food and beverage offerings has shown. We are getting products to market faster,” says Mark Schneider, CEO of Nestlé.

Last year, Nestlé launched its line of premium Starbucks products.In notable 2019 developments, Nestlé announced the sale of its US ice cream business for US$4 billion to Froneri (transaction closed on January 31, 2020). Nestlé also agreed to sell a 60 percent stake in its Herta charcuterie (cold cuts and meat-based products) business to Casa Tarradellas. Portfolio rotation over the past three years amounts to 12 percent of total 2017 sales.

In the past few weeks, the spread of coronavirus has required some effort from Nestlé’s team in China, the company reports. “We have focused on ensuring the safety of our people and their families and introducing protective measures for all our facilities. We are working closely with the Chinese authorities as they take measures to contain this epidemic, building on our significant experience and expertise on the ground,” stresses Schneider.

The Greater China region is Nestlé’s second-largest market, representing about 8 percent of global sales. Schneider further outlines that it is too early to quantify the financial impact of this outbreak at the present time.

“Our immediate thoughts are with the people directly impacted by this global health emergency. We stand in solidarity with the Chinese people and are working hard to ensure our nutritious food and beverages continue to be widely available, particularly those for the most vulnerable, the youngest and the oldest in society,” he concludes.

DSM performance in 2019
In DSM’s 2019 results, the company reported a net profit of €764 million (US$831.5 million). Adjusted net profit was up €830 million (US$903.4 million), up 8 percent versus underlying business in 2018.

As announced last December, DSM CEO Feike Sijbesma will hand over his responsibilities to his Managing Board colleagues Geraldine Matchett and Dimitri de Vreeze as Co-CEOs on February 15 this year and will support the transition until May 1.

DSM expects to deliver a mid-single-digit increase in adjusted EBITDA for 2020 compared to prior year, together with an improvement in its adjusted net operating free cash flow in line with Strategy 2021 targets. This outlook is driven by DSM’s own growth initiatives, innovation programs and self-help actions, and does not assume any significant improvement to the current macroeconomic environment.

With regard to any potential impact of the coronavirus, the company states it will continue to monitor the situation closely.

Bühler’s performance in 2019
In Bühler’s 2019 overview, plant-based proteins for meat alternatives and malting experienced strong upswings. Turnover was stable at CHF 3.3 billion (US$3.4 billion) while order intake decreased by 4.6 percent to CHF 3.1 billion (US$3.2 billion). “The new Consumer Foods segment clearly outperformed our expectations,” says Chief Financial Officer Mark Macus.

“By driving innovations in the food and feed markets – for example, in new applications in grain, cereal, and plant-protein processing and digital applications – as well as in applications for light metal applications, new battery-processing solutions, and coating applications, we are turning today’s challenges into tomorrow’s sustainable business opportunities,” says Stefan Scheiber, Bühler CEO.

Meanwhile, The newly-formed Consumer Foods segment, which was created after the acquisition of the Haas Group, exceeded expectations and made a material contribution to the good Group results.

By Benjamin Ferrer

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