Nestle profits up helped by favourable currency
Nestle said that the single most important factor in this increase is the strong real internal growth of 4.2% which, with pricing of 2.0%, creates organic growth of 6.2%, clearly above market growth.
23/02/06 Nestle has achieved record sales and profits with net profit increasing 20.7% to a record CHF 8.0 billion, in line with analysts expectations. The world’s largest food company reported organic growth of 6.2% results in record reported sales of CHF 91.1 billion, an increase of 7.5%. Nestle said that the single most important factor in this increase is the strong real internal growth of 4.2% which, with pricing of 2.0%, creates organic growth of 6.2%, clearly above market growth. For the first time in five years, many of the Group's key trading currencies appreciated against the Swiss franc, resulting in a positive contribution to consolidated sales in Swiss francs of 1.8%.
Peter Brabeck-Letmathe, Chairman and CEO said: “The 2005 results demonstrate the strength of the Nestlé Model. We have outperformed the market in growth and have again delivered an improvement in EBITA margin. This performance reflects the power of our brands, the quality of our innovation and the benefits of our efficiency programs.”
“The enhanced dividend proposal and the share buy-back demonstrate Nestlé's commitment to creating long-term, sustainable value for our shareholders. For 2006, I expect organic growth of between 5 and 6%, as well as a continued improvement of the EBITA margin in constant currencies,” he added.
Nestle said that the strong performance in 2005 enables the Board – in addition to the previously announced CHF 3 billion share buy-back – to propose a dividend increase of 12.5% to of CHF 9 per share.
