Business Description

Nestlé SA is a health, nutrition, and wellness company, which engages in the manufacture, supply, and production of prepared dishes and cooking aids, milk-based products, pharmaceuticals and ophthalmic goods, baby foods, and cereals. The company was founded by Henri Nestlé in 1866 and is headquartered in Vevey, Switzerland. The company products portfolio includes Liquid and powdered beverages, water, milk products, ice cream, prepared dishes, cooking aids, confectionery, and pet care. It operates in the following segments: Zone EMENA, Zone Asia, Zone Americas, Oceania & Africa, Nestlé Waters, Nestlé Nutrition, and Other Businesses. The Other Business segment is comprised of Nespresso, Nestle Skin Health, and Nestle Health Science.

Key Financials

Revenue (US$ Mn):

• US$ 95,563 Mn was Nestle SA’s annual revenue in 2021, a 2.02% increase from 2020 figures
• Nestle SA indexed a 0.81% increase in annual revenues from 2019, amounting to US$ 93,671 Mn in 2020
• Nestle SA generated total revenue of US$ 92,920 Mn in 2019
• Annual revenue of US$ 92,241 Mn was indexed by Microsoft Corporation in 2018

Operating Income (US$ Mn):

• US$ 16,602 Mn was the operating income generated by Nestle SA in 2021
• Nestle SA’s operating income for 2020 was US$ 15,966 Mn, a -1.44% decrease from 2019
• From 2018’s operating incomes, Nestle SA registered a 4.22% increase in 2019, amounting to US$ 16,200 Mn
• An operating income of US$ 15,544 Mn was generated in 2018 by Nestle SA

Net Income (US$ Mn):

• Nestle SA’s net income for 2021 was US$ 18,469 Mn, a 36.5% increase from the 2020
• The net income generated by Nestle SA in 2020 was US$ 13,531 Mn
• At a 23.82% increase, Nestle SA’s net income of US$ 12,616 Mn was indexed in 2019
• Nestle SA generated a net income of US$ 10,189 Mn in 2018

Operating Margin %:

• 17% was Nestle SA’s operating margin in 2021, a 2.35% increase from 2020 figures
• Nestle SA indexed a -2.3% decrease in operating margins from 2019, amounting to 17% in 2020
• Nestle SA generated an operating margin of 17% in 2019
• An operating margin of 17% was indexed by Microsoft Corporation in 2018

Gross Margin %:

• 48% was the gross margin generated by Nestle SA in 2021
• Nestle SA’s gross margin for 2020 was 49%, a -1% decrease from 2019
• From 2018’s gross margins, Nestle SA registered a 0% decrease in 2019, amounting to 50%
• A gross margin of 50% was generated in 2018 by Nestle SA

SWOT Analysis

Strength:

Diversified Territorial Presence

A wide territorial presence mitigates the company’s business risks and allows it to attain economies of scale and global recognition. Nestle manufactures and markets branded food and beverage products across the world. The company conducts business operations in 186 countries in Europe, the Americas, Asia-Pacific, the Middle East, and Africa. It conducts production through 376 factories in 81 countries, which include 133 in Europe, the Middle East, and North Africa; 146 in the Americas; and 97 in Asia, Oceania, and sub-Saharan Africa. Nestle is the largest food and beverage company in the world. Nestle maintains a balanced geographical presence in both developed and emerging markets. In FY2020, emerging markets accounted for 41% of its revenue, which grew 3.4% YoY.

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