Final Results
March 10 2004 - 4:35AM
UK Regulatory
RNS Number:3535W
Nestle SA
10 March 2004
Press Release
Nestle Group in 2003: Successful Year
with Strong Organic Growth and Improved Margins
Highlights FY 2003 FY 2002
Sales CHF 87'979 mio CHF 89'160 mio
Constant currency sales +6.3%
EBITA CHF 11'006 mio CHF 10'940 mio
Constant currency EBITA margin +60 basis points
Net profit CHF 6'213mio CHF 7'564 mio
Underlying EPS CHF 20.23 CHF 18.90
Dividend Proposal CHF 7.20 CHF 7.00
* Constant currency sales up 6.3 percent
* Foreign exchange reduces sales by 7.6 percent
* 5.1 percent organic growth - within target range
* EBITA margin in Swiss francs up 20 basis points to record 12.5 percent
* In constant currencies, margin increases 60 basis points,
demonstrating sustain-able operating improvement
* Operating cash flow of CHF 10.1 billion, near all-time high; free cash
flow up 1.3 percent to record CHF 6'361 million
Peter Brabeck, CEO of Nestle, said: "Nestle has delivered both a good,
sustainable improvement in performance and an organic growth within our target
range. This is a strong performance in an adverse economic and political
environment, with powerful currency headwinds for the third successive year. I
am satisfied that the Group is capable of continuing to deliver margin
improvement, supported by our efficiency programs and continued strong organic
growth. Our leading market positions and global reach put us in an excellent
position for the somewhat more positive external environment of 2004."
./.
Vevey, February 26, 2004 - On consolidated sales of CHF 87'979 million, the
Nestle Group achieved EBITA (Earnings Before Interest, Taxes and Amortization of
goodwill) of CHF 11'006 mil-lion, resulting in an all-time high margin of 12.5
percent of sales. Net profit amounted to CHF 6'213 million, a margin of 7.1
percent, whilst earnings per share were CHF 16.05; because of one-off fac-tors
in 2002, these figures are not comparable. The comparable figures show that the
underlying net profit margin increased 70 basis points from 8.2 to8.9 percent,
whilst the underlying earnings per share increased 7.0 percent from CHF18.90 to
CHF 20.23.
In US dollars, the Group would have grown sales by 13.7 percent to USD 65.5
billion (USD 57.6 bil-lion in 2002) and increased EBITA 15.9 percent from USD
7.1 billion to USD 8.2 billion.
Sales
At constant currencies, Group sales grew 6.3 percent. The 5.1 percent organic
growth was within the target range. Pricing contributed 2.9 percent and real
internal growth 2.2 percent. This reflects Nestle's declared policy of favoring
margins over volume in a period that saw higher raw material costs and weaker US
dollar related currencies. All Zones saw positive organic growth rates. Eastern
Europe, Latin America, the emerging markets of Asia as well as Africa and the
Middle East clearly outpaced the Group average, as did Nestle Waters, the joint
ventures and the pharmaceutical sec-tor. The USA and Canada look back on a very
successful year and China, India and Indochina also performed well. Alcon's
sales increased 13.2 percent to USD 3.4 billion.
Soluble coffee, chilled culinary, nutrition, ice cream, chocolate, and breakfast
cereals delivered good organic growth.
Thestrong Swiss franc had a negative impact of 7.6 percent on the Group's
consolidated sales. Acquisitions net of divestments contributed 1.2 percent to
reported sales.
Profit, Cash Flow and Net Debt
The Group's EBITA amounts to CHF 11'006 million, resulting in a margin of 12.5
percent (12.3 per-cent in 2002). Nestle achieved its objective of continuous,
sustainable margin improvement despite the foreign exchange impact. At constant
currencies EBITA increased over 10 percent with a margin improvement of 60 basis
points to 12.9 percent.
All three geographic Zones contributed to the improvement in Swiss franc EBITA
margins, with par-ticularly strong advances in the Americas and in the water
business.In the product groups, pet care made significant progress with an
increase of 150 basis points in EBITA margin, reflecting the posi-tive effect of
the integration of Purina. Prepared dishes and cooking aids improved by 90 basis
points, buoyed by thesuccess of the recently acquired Chef America. There were
good improve-ments also in ice cream and chilled dairy, amongst others.
Net profit amounts to CHF 6'213 million (CHF 7'564 million in 2002, strongly
influenced by one-off factors such as the Alcon partial IPO, the FIS divestiture
and charges relating to restructuring and impairments) and earnings per share to
CHF 16.05 (CHF 19.51 in 2002). The underlying net profit, stripping out results
on disposal, significant one-time benefits and charges, amortization, impairment
and restructuring costs, increased to CHF 7.8 billion, resulting in underlying
earnings per share of CHF 20.23, an increase of 7.0 percent.
./.
Operating cash flow reached CHF 10'125 million, with a free cash flow of CHF
6'361 million, which corresponds to a record 7.2 percent of sales. These figures
represent a good performance in the context of the 7.6 percent negative foreign
exchange impact on sales.
The Group reduced its net debt (total financial liabilities net of liquid
assets) slightly to CHF 14.4 bil-lion, and, although its average net debt was
higher than in 2002, it also reduced its net financing cost. The Group's net
debt / equity ratio improved to 38 percent from 42 percent in 2002,
strengthening its AAA credit rating. Capital expenditure fell to CHF 3'337
million, or 3.8 percent of sales. Return on invested capital, excluding
goodwill, rose from 18.9 percent to 19.9 percent.
Outlook
After successfully coming through a challenging year, the Group looks forward to
2004 with cautious optimism. It will pursue its policy of bringing continuous,
sustainable improvement to its margins and it maintains its objective of
achieving between 5 and 6 percent organic sales growth. As a result of the
growing contribution of the efficiency programs and on the strength of its
popular brands and broad presence, Nestle is confident on being able to deliver
on both fronts.
Board Decisions
At its meeting of February 25, 2004 the Board of Directors approved the fully
audited accounts and decided to propose to the General Meeting of Shareholders a
further increase in dividend to CHF 7.20 per share (CHF 7.- for 2002). Provided
the General Meeting accepts this proposal, the dividend will be payable on April
28, 2004.
At the General Meeting, the terms as directors of Mrs. Vreni Spoerry, Lord
Simpson and Mr. Arthur Dunkel will expire. These directors are not seeking
re-election. The Board expresses its gratefulness to the retiring members for
their contribution and the leadership, knowledge and experience they brought to
the Company. It recommends the General Meeting to elect Sir Edward George, Mr.
Kaspar Villiger, Mr. Rolf Hanggi, Mr. Daniel Borel and Mrs. Carolina
Muller-Mohl as new directors.
The General Meeting of Nestle S.A. will take place on April 22, 2004 at 15:00 at
the Palais de Beau-lieu in Lausanne. No transfer of shares affecting voting
rights will be registered between April 2nd, 2004 and the day of the General
Meeting. The management report will be available from March 25, 2004, whereas
the fully audited financial statements are displayed as of today on the Nestle
Corpo-rate Website (www.nestle.com).
(Press Release Ends)
Contacts: Media: Francois-Xavier Perroud +41-21-924 2596
Investors: Roddy Child-Villiers +41-21-924 3509
This information is provided by RNS
The company news service from the London Stock Exchange
END
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