Nestle SA Reg Shs. Ser. B Spons (ADR)(OTCMKTS:NSRGY) 4Q2014 sales came at CHF 91 billion. Wan Ling Martello, the CFO stated that the organic growth in FY2014 included 2.2% pricing and 2.3% RIG. It indicates that the company was successful in achieving sustainable growth in tough markets. Also, it didn’t compromise on innovations and brand aspect that is essential to engage effectively with consumers.
The financial performance
Talking on the financial performance in 4Q, Martello stated that Nestle operating profit surged by 30 basis points in 4Q. The company posted operating cash flow of CHF 14.7 billion. The earnings per share increased 4.4% measured in terms of constant currency. There have been no major headwinds in last two years.
Strong organic growth
The strong regional organic growth contributed in higher earnings in 4Q. Nestle SA Reg Shs. Ser. B Spons (ADR)(OTCMKTS:NSRGY) reported growth of almost 5% in the U.S., 5.7% in Africa, Asia and Oceania, and 1.9% in Europe. The real internal growth in Europe, America and AOA stood at 2.4%, 2.3%, and 2.4%, respectively. The company witnessed strong demand in North America markets. The other factors that affected financial performance are deflation in Europe, slowdown in the China and Middle East and subdued growth in Latin America. However, these factors failed to offset the strong earnings in 4Q.
Nestle benefitted most from the emerging markets. The organic growth came at 8.9% in emerging markets. They also contributed 40% to the total sales of CHF 40.2 million in 4Q2014. The organic growth came at 1.1% in the developed markets. Nestle reported sales of CHF 15.2 million in Europe. It launched several new products in Europe market. The company focus is on Europe as the business environment is not showing any signs of improvement with deflation having a negative impact on prices. The sales in Russia were strongest in eastern and central Europe.