Buying helps Nestlé boom in 2010

17 February 2011
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17 February 2011 | Angeline Albert

Nestlé tripled its profits in 2010, thanks in part to its procurement strategy.

The Swiss confectioner’s 2010 financial results show its net profit was CHF 34.2 billion (£22 billion) in 2010, up from CHF 10.4 billion (£6.7 billion) in 2009, despite “volatile” raw material prices.

It said “extraordinary” increases in 2010 over 2009 particularly reflect the net profit it made on the sale of its remaining holding in eye care company Alcon – CHF 24.5 billion (£15.9 billion). It also said its buying strategy contributed to efficiencies made.

In a statement about its 2010 full-year results, Nestlé said: “Our savings, procurement strategy and leverage from growth more than compensated the cost pressures during the year, which increased in the second half. Our efficiency and effectiveness also contributed to an improved environmental performance in areas such as energy, water and packaging usage.”

Last May, Nestlé introduced procurement guidelines for suppliers to ensure its palm tree oil supply came from sustainable sources. In the UK, it reduced its on-site energy consumption by 7.9 per cent in 2009 compared to 2008, exceeding its energy target of 7 per cent. In 2009, it reduced its total water consumption in the UK by 27 per cent, exceeding a target of 17 per cent.

Nestlé CEO Paul Bulcke said: “We continued to drive efficiency and effectiveness in both developed andemerging markets while at the same time accelerating innovation, serving well over a billion consumers a day across the world. We are starting 2011 with continued momentum, well placed to face uncertainties ahead, including volatile raw material prices.”

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