Despite seeing growth during 2016, Mark Schneider, Nestlé CEO said that, in order to drive future profitability, the company plans to increase restructuring costs considerably in 2017.
Nestlé has reported full year growth for 2016 of 3.2% (organic); trading operating profit margin up 30 basis points in constant currency; and continued strong real internal growth of 2.4%.Sales were CHF 89.5 billion, up 0.8% reported, with a foreign exchange impact of -1.6%.For 2017, Nestlé expects organic growth between 2% and 4%, with a stable trading operating profit margin in constant currency as a result of considerable increase in restructuring costs to drive future profitability.“Our 2016 organic growth was at the high end of the industry but at the lower end of our expectations,” said Mark Schneider, Nestlé CEO. “We saw a solid trading operating profit margin improvement and our cash flow grew significantly. Based on these results, our Board of Directors is pleased to propose the 22nd consecutive dividend increase, underlining our commitment to continuity. In 2017, we expect organic growth between 2% and 4%. In order to drive future profitability, we plan to increase restructuring costs considerably in 2017. As a result, the trading operating profit margin in constant currency is expected to be stable. Underlying earnings per share in constant currency and capital efficiency are expected to increase. Nestlé continues to invest in future growth and operating efficiency, targeting mid-single digit organic growth and significant structural cost savings by 2020.”