Nestlé boosted by growth in US and China as 2018 sales increase

Nestlé recorded a 2.1% increase in sales last year, supported by strong momentum in the US and China, the company’s two largest markets.

For 2018, the Switzerland-headquartered firm posted sales of CHF 91.44 billion ($90.69 billion) as its confectionery and infant nutrition brands performed well. Operating profit surged 35.4% to CHF 13.75 billion ($13.64 billion).

A standout performer for the year was Nespresso, which maintained mid-single-digit growth, with “very strong momentum” in North America. Growth was supported by innovation and strong demand for the recently launched Master Origin range.

Nestlé’s Asia, Oceania and Sub-Saharan Africa business also performed well, with a reported net sales increase of 2.2%. China saw improved growth compared to 2017, supported by innovations in infant nutrition, coffee and culinary. Double-digit growth was recorded in Vietnam and Indonesia, led by Milo and Bear Brand in particular.

However, in zone Americas, the company’s largest area by revenue, sales shrank 0.9% compared to 2017. 

Nestlé CEO Mark Schneider.

Mark Schneider, Nestlé CEO, said: “We are pleased with our progress in 2018. All financial performance metrics improved significantly and we saw revived growth in our two largest markets, the United States and China, as well as in our infant nutrition business. Nestlé keeps investing in future growth and – at the same time – has increased the amount of cash returned to shareholders through our dividend and share buyback programme.

“We made significant progress with our portfolio transformation and sharpened our group’s strategic focus, strengthening key growth categories and geographies in the process. Our unique nutrition, health and wellness strategy, with food, beverage and nutritional health products at its core, has become much clearer as we completed a sizeable number of transactions and announced strategic reviews for Nestlé Skin Health and Herta.

“In 2018, we upgraded our innovation engine notably to ensure continued technology leadership and a shorter time to market. In the fast-changing food and beverage space, Nestlé has what it takes to truly excite consumers with meaningful innovation and must-have products.

“We reaffirmed our sustainability leadership at a time when consumers and regulators around the world are increasingly looking for solutions to today’s environmental and societal problems. Our decisive action and strong commitments to tackle the global packaging waste problem are a case in point.

“We are on our way to meeting our 2020 targets and positioning Nestlé for sustained and sustainable growth in the years beyond.”

During 2018, Nestlé completed acquisitions and divestments with a total transaction value of around CHF 14 billion ($13.9 billion).

A standout deal was secured last May when the firm announced it would pay $7.15 billion in cash for exclusive rights to sell Starbucks’ line of packaged coffees and teas around the world. The companies are working together to capture new growth opportunities globally.

This time last year, Nestlé confirmed plans to offload its US confectionery unit to Ferrero for $2.8 billion, in a move to focus on other areas of its business.