Nestle's revenue and market capitalization
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. It continues to make the necessary efforts to maintain this position. In 2021, its business grew, as it did in the previous year. During this year, the company recorded strong sales growth. Find out here the key points to remember about the group's annual performance and financial results at the beginning of the 2022 financial year.
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Full year 2021 financial indicator performance
For the full twelve months of 2021, the Nestlé Group delivered a strong financial performance. It achieved organic growth of 7.5%, up from 3.6% in the previous year. At that time, it was the highest level achieved by the company in the last five years. This growth was driven by very dynamic home consumption.
It was also helped by an excellent rebound in sales in the out-of-home channels. Also, the improvement in organic growth is explained by an increased price effect and market share. Real internal growth (RIG) was 5.5% in 2021.
In addition, for the full year 2021, the food group achieved sales of CHF 87.088 billion, compared to CHF 84.343 billion in 2020. This represents an increase of 3.3% on the previous year's level.
For the year 2021, the company achieved a current operating result of 12.159 billion Swiss francs, compared to 14.233 billion Swiss francs a year earlier. The operating profit was CHF 11.679 billion, compared to CHF 14.796 billion in 2020.
In 2021, the recurring operating margin decreased by 30 basis points to 17.4% from 17.7% in 2020. The recurring operating margin for 2021 was 14.0%, down from 16.9% a year earlier. It decreased by 290 basis points (reported).
Recurring earnings per share were CHF 4.42 in 2021, compared to CHF 4.21 a year earlier. At constant exchange rates, recurring earnings per share were up 5.8%. On a reported basis, it increased by 5.1%.
Earnings per share for 2021 (on a reported basis) were CHF 6.06, compared to CHF 4.30 for the previous year. This represents an increase of 41.1% over the previous year. This performance reflects in particular the profits made from the sale of L'Oréal shares.
Financial structure at the end of 2021
At the end of 2021, operating cash flow was CHF 13.864 billion, compared to CHF 14.377 billion a year earlier. Cash flow (before changes in operating assets and liabilities) amounted to CHF 17.245 billion, compared to CHF 17.542 billion at the end of December 2020.
At the end of 2021, cash and cash equivalents amounted to CHF 6.992 billion. A year earlier, they had reached CHF 5,235 million. At 31 December 2021, the Nestlé Group had an estimated equity of CHF 53.727 billion, compared to CHF 46.514 billion at the end of the previous year.
For the full year 2021, cash flow from operating activities was CHF 16.645 billion, compared to CHF 17.157 billion at 31 December 2020.
Nestlé Group's strong start to 2022
In the first quarter of 2022, the Nestlé Group reported strong results, reflecting a good start to the year. In particular, the company recorded an increase in sales over this period. Sales exceeded all expectations. This performance was supported by accelerated price increases in the face of cost inflation.
In the first three months of this year, the Swiss food giant achieved a turnover of 22.2 billion Swiss francs (21.5 billion euros). This is an increase of 5.4% compared to the same period last year. The market was expecting sales of 21.8 billion Swiss francs.
The group's organic growth was 7.6% in the first quarter of 2022, compared with 7.7% a year earlier. This is a key indicator for assessing the company's sales excluding currency effects and acquisitions or disposals. Moreover, this value was higher than the market forecast.
The market was targeting 5.5% growth. As for real internal growth (RIG), it was 2.4% in Q1-2022. Prices increased by 5.2% in the quarter. This is to keep up with inflation.
About Nestlé's dividend and market capitalisation
The Nestlé Group continues to pay a dividend to its shareholders. It is distributed once a year. This is after approval at the company's Annual General Meeting of Shareholders. For the financial year 2021, the Board of Directors of the company had decided to increase the dividend by 5 centimes compared to the previous year (CHF 2.75 per share).
The dividend paid for the 2021 financial year is therefore CHF 2.80 per share. This is the 27th year in a row that the dividend has been increased. In total, the Group paid CHF 13.9 billion to shareholders in 2021. This amount was paid in the form of share buybacks and dividends.
In addition, the Nestlé share is listed on the SIX Swiss Exchange. It is one of the most closely watched stocks by investors or traders on the stock markets. As of May 2022, the company's market capitalisation is estimated to be over EUR 300 billion.
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