Vevey - Nestlé echoed the cautious 2012 tone of other global food manufacturers on Thursday after reporting forecast-beating sales growth in the last three months of last year.
The world’s largest food group which makes brands such as Nescafé
, Perrier, Maggi and Carnation warned that it did not expect 2012 to be any easier than previous years due to continued economic uncertainties and volatility.
“It was a challenging year, and we do not expect 2012 to be any easier,” chief executive Paul Bulcke said in a statement.
Underlying sales growth for 2011 was 7.5%, beating an consensus forecast for 7.1% and rising from 7.3% in the first nine months as it forecast underlying growth returning to its long-term range of 5-6%.
After reporting a 60 basis-point increase in margins to 15% for 2011, the world’s biggest food group also made its standard forecast for “improved margin and underlying earnings per share in constant currencies” for 2012.
Bernstein analyst Andrew Wood said that the 2011 margin on underlying earnings before interest was the main disappointment as it showed a small decline .
”Overall we believe the market will react well to the strong sales results and positive outlook on 2012, despite the margin miss. However, we remain cautious on sales momentum entering 2012 ,” he said in a note.
Nestlé shares, which are up barely 1% this year, were indicated to rise after the results.
The group reported that absolute 2011 sales fell slightly less than expected to 83.6 billion Swiss francs ($90.5bn), as the rise in the safe haven currency more than cancelled out underlying growth.
French food rival Danone trimmed its sales growth and margin targets for 2012 on Wednesday, saying tough West European markets would offset strong growth in emerging markets, which now account for more than half of sales.
Anglo-Dutch consumer goods group Unilever sounded a similar tone, saying 2012 will be a difficult year as growth in emerging markets slows and demand in Europe and North America stays flat at best.
Investors will also be looking for any news on Nestlé’s bid to buy Pfizer’s $10bn Wyeth infant nutrition business in a an attempt to boost its Chinese business.
Nestlé is seen as a front-runner alongside French rival Danone according to banking sources, although both have been silent on the issue, declining even to acknowledge they are in the auction process.
Executives will also be asked on Thursday about Nestlé’s 31% stake in French cosmetics maker L’Oréal. The €49bn company said this week that heiress Liliane Bettencourt with a 30% stake in the firm was leaving the board to be replaced by her grandson Jean-Victor Meyers.