Nestle makes $11.55 billion profit in 2012

, The Associated Press



Nestle SA, the world's biggest food and drinks maker, predicted another challenging year ahead but overcame tough global economic conditions to post a full-year net profit Thursday of $11.55 billion for 2012.

With 330,000 employees worldwide and 461 factories in 83 countries, Nestle is a major buyer of food commodities such as wheat, sugar, milk and coffee and its results are a good indicator of consumer demand in various regions of the world and the health of the global economy as a whole.

The maker of Nescafe, Perrier, Jenny Craig, Haagen Dazs and Carnation reported broad-based growth across all product ranges and regions with sales reaching $100.5 billion, up from $91.11 billion in 2011. The results compare with a full-year 2011 profit of $10.35 billion.

In its financial statements, the Swiss-based food giant predicted 2013 will prove to be every bit as challenging as last year.

This year began with an improved economic climate but a still-uncertain recovery, particularly in Europe where officials remain anxious whether reforms will prevent failed banks from adding to government debt through bailout.

This year "will have its difficulties, definitely, but there will also be many opportunities to deliver value," CEO Paul Bulcke told a news conference at the company's elegant headquarters on the shoreline of Lake Geneva. Even in Europe, he added, there was "good growth," even if it lagged well behind other regions.

The weakest growth was in Europe — up just 1.8 percent compared with 5.2 percent in the Americas and higher everywhere else — and with products such as prepared dishes and cooking aids. Overall sales for 2012 showed that the strongest growth was in China and other parts of Asia along with Africa and the Oceania regions.

"This year was not a walk in the park," said CEO Wan Ling Martello, who noted that Nestle had its slowest growth in Europe in the face of some shrinking local economies. "Even so, we delivered good top-line results."

But consumer confidence remains "very low," said Martello, a former Wal-Mart executive, who singled out health and wellness items such as Nesquik made with less sugar and organic Gerber baby food as examples of what is selling well.

Product-wise, the best sellers were powdered and liquid beverages and pet care. In North America, which is Nestle's most important market, pet care and frozen foods were the stalwarts, said Chris Johnson, the company's executive vice president for the Americas.

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