Still, the company’s net profits were strong and enabled it to announce a $5.2-billion dividend payout to shareholders, executives said.
Overall, they said, Nestle’s existing businesses grew 4.1% in 2009, representing strong performance for the maker of Kit Kat, Nescafe, Hot Pockets and Lean Cuisine during a period of economic challenges and low consumer spending.
“It is not over yet, but already there is a lot of talk about a world of a new normal,” said Paul Bulcke, Nestle’s chief executive. “Well, for us, there is no new normal. The situation was indeed more intense last year, but we continue to do what we always do.”
Earnings for Nestle’s “Zone Americas” operations, which are dominated by U.S. sales, rose 3.7% in 2009 to about $5 billion. The company’s revenues for the region also grew by 2.5% to about $29.7 billion, the company reported.
“There was very, very good performances in North America,” said Jim Singh, chief financial officer for Nestle. “And when you consider the economic turbulence that engulfed that market late 2008 and the beginning of 2009, we are very, very appreciative of this significant progress we have made here.”
Executives said they expected Nestle’s recent $3.7-billion purchase of frozen pizza businesses from Kraft Foods, including DiGiorno, Tombstone and California Pizza Kitchen, would help boost profits in the coming years.
“This acquisition is an excellent strategic match,” Bulcke said.
“It brings category leadership in the North American frozen pizza market where Nestle, until now, only had a minor presence.”
Those additions, combined with other 2009 acquisitions, are expected to boost Nestle’s annual sales by $2.1 billion, Singh said.