The world's biggest food company Nestle today reported a 42% drop in its 2009 net profit to 10.4 billion Swiss francs and set its sights on stronger growth in the coming year.
The net profit, equivalent to €7.1 billion, marked a retreat to the Swiss group's business performance in 2007, but it was largely in line with analyst forecasts.
'For 2010, I expect our food and beverages business to achieve higher organic growth than in 2009,' said chief executive Paul Bulcke, although the company also highlighted overall economic uncertainty for the year ahead.
'This confidence is also reflected in our increased dividend proposal as well as our share buyback plans for the year,' he added.
In 2008, Nestle's net profit was boosted by a one-off 9.2 billion Swiss franc earnings on the sale of part of its stake in eye care specialist Alcon, affecting the comparison with last year.
Sales in 2009 declined slightly from the 109.9 billion Swiss francs reported in 2008, a boom year, to 107.6 billion Swiss francs in 2009. Nestle estimated that the strong Swiss franc wiped 5.5% off its 2009 sales figure.
The food giant said its business had delivered strong and broad-based organic growth - a measure of performance minus the impact of sell-offs and acquisitions.
'With organic growth of 4.1% achieved in last year's challenging environment, we were able to grow substantially faster than our industry,' said Bulcke.
The group proposed a 14.3% increase in its dividend payment to shareholders.
Nestle's profits for 2010 are likely to be boosted significantly following Swiss pharmaceutical company Novartis's decision last month to buy the outstanding stake in Alcon.
The group reported sales growth in its core food and beverage business across most regions, led by a 7.4% increase in demand in Asia and the Pacific, and nearly all products types.
However, the weak link was again its bottled water division, with a decline of 1.4%. Nestle said sales in the bottled water industry as a whole were weaker last year but that demand had picked up in Europe and North America during the fourth quarter of 2009.
