Nestlé (NESN) H2 2012 (Media) earnings summary

Executive summary

• Delivered 2012 commitments with broad-based growth, improved profitability and cash flow, while investing in brands, R&D, capacity and capabilities.

• Nutrition, health and wellness remained the strategic platform for consumer value, brand differentiation and profitable growth.

Financial highlights

• Sales reached CHF 92.2bn, up CHF 8.6bn or 10.2%; organic growth was 5.9%, comprising 3.1% real internal growth and 2.8% pricing.

• Trading operating profit rose CHF 1.5bn to CHF 14.0bn; margin increased 20 bps to 15.2% reported and 10 bps in constant currencies.

• Net profit rose CHF 1.1bn to CHF 10.6bn; reported EPS increased 12.2% to CHF 3.33, and underlying EPS in constant currencies rose 7.5%.

• Operating cash flow increased CHF 5.6bn to CHF 15.8bn, up 55%; Continuous Excellence generated more than CHF 1.5bn in efficiencies.

• Consumer-facing spend rose 8% in constant currencies; marketing costs increased 30 bps.

Outlook and guidance

• 2013 outlook: 5%-6% organic growth, improved trading operating profit margin, higher underlying EPS in constant currencies and improved capital efficiency.

• The operating environment was expected to remain as challenging as 2012, with growth opportunities across developed and emerging markets and in PPP and premium offerings.