Nestlé's market cap, dividends, sales and earnings in 2020

  •   DEHOUI Lionel

Nestlé is a Swiss company that operates in the field of distribution and food. The group is recognised as the world's leading food company. In 2020, its business grew. During this year, the company recorded its strongest growth for five years. Find out here what you need to know about the group's annual performance.

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Nestlé's market cap, dividends, sales and earnings in 2020
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Nestlé Group's strong start to 2020

In the first quarter of 2020, the Nestlé Group announced an increase in sales over this period. This performance was driven by precautionary purchases made by many consumers before the implementation of the containment measures adopted in several countries to fight the Covid-19 pandemic.

For the quarter as a whole, the Swiss food giant reported organic sales growth of 4.3%. Sales in Q1-2020 amounted to 20 billion Swiss francs. Sales growth was driven by strong momentum in the Americas and in the Emena region (Europe, Middle East and North Africa).

At that time, the Swiss group estimated that petcare products made a significant contribution to this growth.

 

Group business improves in the first nine months of 2020

In the first nine months of 2020, the Nestlé Group recorded better than expected sales. Sales amounted to CHF 61.9 billion. However, it reported a year-on-year decline of 9.4%. On the other hand, in Q3-2020, the company saw an acceleration in organic growth to 4.9%.

It reached 3.5% in the first nine months of the year under review. It also includes real internal growth (RIG) of 3.3%. This development was supported by the increase in the US market during this period. It was also supported by increased sales of Purina pet food products.

Despite the coronavirus health crisis, the Health business was very strong. Nestlé Health Science grew by more than 10% over the period. This logically supported the good level of sales in the first nine months of 2020.

 

Performance of financial indicators for the full year 2020

For the full year 2020, the Nestlé Group achieved organic growth of 3.6%. This is the highest level achieved by the company in the last five years. In particular, it exceeded the market's expectations of a 3.5% increase. For its part, the company was expecting to achieve 3% growth this year.

This growth was driven by strong sales momentum in the Americas region. It was also driven by Purina petcare and Nestlé Health Science. In addition, for the full year 2020, the food and beverage company achieved sales of CHF 84.343 billion, compared to CHF 92.568 billion in 2019.

It reported a year-on-year decline of 8.9%. The company's net profit for the year was 12.2 billion Swiss francs. Compared to the previous year, it fell by 3.0%. However, it came in above market expectations. The market expected CHF 11.97 billion.

For the year 2020, the company achieved a current operating result of 14.233 billion Swiss francs, compared to 13.674 billion Swiss francs a year earlier. Operating profit was CHF 14.796 billion, compared to CHF 16.078 billion in 2019.

In 2020, the recurring operating margin increased by 20 basis points (at constant exchange rates) to 17.7%. On a reported basis, it increased by 10 basis points year-on-year.

The current operating margin was 16.9% in 2020. It increased by 210 basis points on a reported basis. Recurring earnings per share were CHF 4.21, up 3.5% at constant exchange rates. On a reported basis, it declined by 4.5%.

Earnings per share remained stable year-on-year at CHF 4.30 (on a reported basis).

 

Financial structure at the end of 2020

In the financial year 2020, operating cash flow was CHF 14.377 billion, compared to CHF 15.850 billion in the previous year. Cash flow (before changes in operating assets and liabilities) amounted to CHF 17.542 billion, compared to CHF 18.683 billion at the end of December 2019.

At the end of 2020, cash and cash equivalents amounted to CHF 5.235 billion. A year earlier, it was CHF 7.469 billion. At 31 December 2020, the Nestlé Group had an estimated equity of CHF 46.514 billion, compared to CHF 52.862 billion at the end of the previous year.

For the full year 2020, cash flow from operating activities was CHF 17.157 billion, compared to CHF 18.938 billion at 31 December 2019.

 

Nestlé dividend and market capitalisation in 2020

At the Nestlé Group, the dividend is distributed once a year. This is after approval at the company's Annual General Meeting of Shareholders. For the year 2020, the Board of Directors of the company decided to increase the dividend by 5 centimes compared to the previous year (CHF 2.70 per share).

The dividend paid for the 2020 financial year is therefore CHF 2.75 per share. This is the 26th consecutive year in which the dividend has been increased. In addition, the Nestlé share is listed on the SIX Swiss Exchange. In 2020 (as of December), the company's market capitalisation was estimated at USD 328 billion.

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