* Full year underlying sales growth 7.5 pct vs 7.1 pct in
* Nestle forecasts 5-6 pct growth, margin rise for 2012
* Expects 2012 to be no easier than 2011
* Proposes 2011 dividend of 1.95 Sfr
* Questions surround L'Oreal stake, bid for Pfizer's Wyeth
By Emma Thomasson
VEVEY, Switzerland, Feb 16 Nestle
echoed the cautious 2012 tone of other global food
manufacturers on Thursday after reporting forecast-beating sales
growth in the last three months of last year.
The world's largest food group which makes brands such as
Nescafe, Perrier, Maggi and Carnation warned that it did not
expect 2012 to be any easier than previous years due to
continued economic uncertainties and volatility.
"It was a challenging year, and we do not expect 2012 to be
any easier," Chief Executive Paul Bulcke said in a statement
Underlying sales growth for 2011 was 7.5 percent, beating an
consensus forecast for 7.1 percent and rising from 7.3 percent
in the first nine months, as it forecast underlying growth
returning to its long term range 5-6 percent.
After reporting a 60 basis point increase in margins to 15
percent for 2011, the world's biggest food group also made its
standard forecast for "improved margin and underlying earnings
per share in constant currencies" for 2012.
Bernstein analyst Andrew Wood said that the 2011 margin
on underlying earnings before interest was the main
disappointment as it showed a small
" Overall we believe the market will react
well to the strong sales results and positive outlook on 2012,
despite the margin miss. However, we remain cautious on sales
momentum entering 2012 ," he said in a note.
Nestle shares, which are up barely 1 percent this year,
were indicated to rise after the results.
The group reported that absolute 2011 sales fell slightly
less than expected to 83.6 billion Swiss francs ($90.5 billion),
as the rise in the safe-haven currency more than cancelled out
French food rival Danone trimmed its sales growth
and margin targets for 2012 on Wednesday, saying tough west
European markets would offset strong growth in emerging markets,
which now account for more than half of sales.
Anglo-Dutch consumer goods group Unilever
sounded a similar tone, saying 2012 will be a difficult year as
growth in emerging markets slows and demand in Europe and North
America stays flat at best.
Investors will also be looking for any news on Nestle's bid
to buy Pfizer's $10 billion Wyeth infant nutrition
business in a an attempt to boost its Chinese business.
Nestle is seen as a front-runner alongside French rival
Danone, according to banking sources, although both
have been silent on the issue, declining even to acknowledge
they are in the auction process.
Executives will also be asked on Thursday about Nestle's 31
percent stake in French cosmetics maker L'Oreal which
said this week that heiress Liliane Bettencourt, 89, with a 30
percent stake in the 49 billion-euro company, was leaving the
board to be replaced by her grandson Jean-Victor Meyers.