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Company Snapshot : Nestle

  • Jun 5th, 2017

About the company

Nestlé is the world’s largest food and beverage company. We have more than 2000 brands ranging from global icons to local favourites, and we are present in 191 countries around the world. 150 years ago it started. 3,28,00 employees 418 factories in 86 countries, CHF 89.5 Billion( Rs. 5,934 Billion)

History:

  • 1866: US based brothers Charles and George Page established Anglo-Swiss Condensed Milk Company in Cham, Switzerland, under the name of Milk Maid. They marketed the brand as a safe, long life alternative to fresh milk.
  • 1867: Henry Nestle named pharmacist launches his ‘farine lactee’ (flour with milk and sugar) in Vevey, Switzerland. He used the image of a Nest (which is present now in every Nestle product) as his logo.
  • 1875: Henry Nestle sells his company and factory in Vevey to three local businessmen.
  • 1878: Both the companies became rival to each other by adding similar products in their product line. In this span of time they started expanding, and operating their business in US also.
  • 1879: Henry Nestle’s company started selling milk chocolate which was invented and commercialized by Daniel Peter.
  • 1902: The death of George page, founder of Milk Maid led to the selling of the US operations to Farine lactee, which eventually became the merger of Nestle.
  • Both the company jointly operated for the first time for selling swiss chocolate- Milk Nesle.  

Chairman-  Peter Brabeck-Letmathe

CEO- Paul Blucke

Products:

Other Brands- Nestea, Carnation, Stouffer’s, Milo, Nespresso, Dreyer’s & Edy’s, Gerber, Maggi, Nescafe, Perrier

Nestle India:

 Nestle India Ltd was incorporated in the year 1956. The company set up their first production facility in the year 1961 at Moga in Punjab.

The company has presence across India with 7 manufacturing facilities and four branch offices spread across the region. The four branch offices in the country help facilitate the sales and marketing of its products. They are in Delhi, Mumbai, Chennai and Kolkata.

Nestle is acknowledged amongst India's 'Most Respected Companies' and amongst the 'Top Wealth Creators of India', it has built trust and respect among every strata of the society.  

Products of Nestle India:

  • Chocolates and Confectionary: Polo, Eclairs, Munch, Milkybar, Barone, KitKat, Alpino, Classic
  • Prepared Dishes and Cooking Aids: Maggi
  • Beverages: Nestea, Nescafe
  • Milk Products and Nutrition: EveryDay, a+, ActiPlus, Raita, Milkmaid   

* The company has also introduced products of daily consumption and use, such as Nestle Milk, Nestle Slim Milk, Nestle Fresh n Natural Dahi and Nestle Jeera Raita.

Head quarter- Gurgaon, India

Chairman & MD- Suresh Narayanan

Last 5 years of data of Nestle India:

Rupees in Millions

Particulars

2012

2013

2014

2015

2016

Domestic Sales

81,561.9

87,537.4

94,853.2

77,949.1

88,338.0

Export Sales

4,256.9

6,261.3

6,441.8

6,355.3

6,579.2

Less: Excise duty

2,796.2

3,179.7

3,232.3

3,071.7

3,324.4

Net Sales

83,022.6

90,619.0

98,062.7

81,232.7

91,592.8

Other Operating Income

322.7

391.5

485.7

520.4

645.2

Total revenue from operations

83,345.3

91,010.5

98,548.4

81,753.1

92,238.0

Total Expenses

67,944.9

74,068.7

80,622.9

68,415.6

76,519.3

Profit From Operations

15,400.4

16,941.8

17,925.5

13,337.5

15,718.7

Other income

310.3

830.9

873.2

1,100.9

1,493.9

Finance costs

266.0

365.1

142.3

32.9

35.1

Employee benefit expense due to passage of time

*

558.1

648.3

753.2

874.0

Net provision for contingencies (others)

-81.5

207.4

249.5

301.5

1,266.7

Profit Before Exceptional Items And Taxation

15,526.2

16,642.1

17,758.6

13,350.8

15,036.8

Exceptional items - Charge/(Credit)

-

-138.1

-70.0

5,008.4

307.8

Corporate social responsibility expense

-

0.0

85.1

206.1

313.6

Profit before taxation

15,526.2

16,780.2

17,743.5

8,136.3

14,415.4

Tax expense

4,846.9

5,608.9

5,896.6

2,503.6

5,150.0

Profit after taxation

10,679.3

11,171.3

11,846.9

5,632.7

9,265.4

Earnings per Share (Rs.)

110.8

115.9

122.9

58.4

96.1

Dividends per Share (Rs.)

48.5

48.5

63.0

48.5

63.0

 

Global Net sales by Business segment 2016 (in CHF Billion)

  • Powdered and Liquid Beverages - 19.8
  • Nutrition and Health Science - 15.0
  • Milk products and Ice cream - 14.3
  • Prepared dishes and Cooking aids - 12.1
  • PetCare - 12.1
  • Confectionery - 8.7
  • Water -7.4

Global Net sales by Geographic Reason 2016 (in CHF Billion)

  • Europe, Middle East and North Africa- 26.8
  • The Americas- 40.2
  • Asia,Oceania,Africa- 22.5

Acquisitions & Mergers:

  • 2016
    • Oct 3, Nestlé and R&R( a famous Ice Creeam brand headquartered in England) have completed the transaction to create  ice cream and frozen food “Froneri”.
    • Mar 24, Nestlé Skin Health to Form Non-Prescription Acne Joint Venture with Guthy-Renker( a direct marketing industry headquartered in California, US)
  • 2015
    • Apr 15, Nestlé in exclusive negotiations to sell Davigel to Brakes Group, a leading European food service operator owned by the private equity manager Bain Capital.
    • Jan 6, Investment in Seres Health & partnership with Flagship Ventures.

Seres Health is a leading microbiome therapeutics platform company based in Cmbridge, USA.

Flagship Ventures, is a leading venture capital and venture creation firm focused on innovations in healthcare and sustainability based in Cambridge, Mass., USA.

  • 2014
    • Nov 7, Nestlé Waters Germany - Löhnberg factory sale
    • July 2, Nestlé USA divests Juicy Juice business of USA to Brynwood Partners VII L.P.
    • Feb 3, Nestlé announces divestment of its premium sports nutrition business PowerBar and Musashi brands to a US-based consumer packed goods holding company, Post Holdings.
    • Feb 11, Nestlé announces L'Oréal and Galderma ownership changes

L’Oréal will buy 48.5 million of its own shares (8% of its share capital) from Nestlé.

Nestle acquired 50% of Galderma. Galderma is a Swiss company, created in 1981, specializing in innovative medical solutions in dermatology for people.

Competitors:

  • Unilever: Unilever is a Dutch-British transnational consumer goods company co-headquartered in Rotterdam, Netherlands and London, United Kingdom. It is one of the oldest multinational companies; whose products are used by 2.5 billion people on any given day of the year. In the year 2016 Unilever has done a turnover of 52.7 Billion Euros. It has a workforce of 1,69,000 people in around 190 countries.

 Its product line includes 400 brands subdivided into food, beverages, cleaning agents and personal care products but brands like Axe, Dirt is Good (e.g. Omo), Dove, Family Goodness (e.g. Rama), Heartbrand (e.g. Wall’s), Hellmann’s, Knorr, Lipton, Lux, Magnum, Rexona, Sunsilk, and Surf make sales of more than 1 Billion Euro a year.

  • KraftHeinz: The Kraft Heinz Company is an American worldwide food company formed by the merger of Kraft Foods Group and Heinz in July 2, 2015. The merger was backed by 3G Capital(24.2% shares) and Berkshire Hathaway(26.8% shares), which invested US$10 billion in the deal, making Kraft Heinz worth about US$46 billion. The company is headquartered in both Pittsburgh and Chicago. The revenue of the company was $26.48 Billion in the year 2016. Also the company has a workforce of more than 42,000 employees.

The Company’s iconic brands include Kraft, Heinz, ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Weight Watchers Smart Ones and Velveeta.

  • Britannia: Britannia is one of the largest competitors of Nestle in India. It is one of the biggest food processing company with a market revenue of  Rs. 828.55 Crores. Britannia is headquartered in Bengaluru, India. It is one of the oldest company founded 125 years ago in Kolkata, India. Britannia is one of  the subsidiaries of Wadia group.

It sells its Britannia and Tiger brands of biscuit throughout India. The Company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products.

Awards:

  • CNN Money: On 2016 it was ranked #25 on the list of the World's Top Employers for New Grads.
  • Fortune: Ranked #36 among the “World’s Most Admired Companies” on 2017 list.
  • Nestle India was awarded CII SCALE award for being most innovative digital supply chain across FMCG during 2016.
  • Nestle India have also won the ASSOCHAM excellence award for Best FMCG Company in Logistics and Warehousing.

News

Nestle India: Uses product packaging for content marketing

Nestle India and HUL plans to buy stock in Havmor Ice Cream

Nestle India denies the allegations of Rajasthan food regulator against the Brand Cerelac  


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