Letter to our shareholders


2016 was an exceptional year in exceptional times. We reached a milestone, our 150th anniversary, a celebration of a century and a half of passion for nutrition and for quality. But this achievement comes as our industry is at a crossroads. Expectations of Nestlé are changing substantially as consumers embrace new trends, habits and lifestyles. We see a reshaping of the competitive environment. We are on the brink of a ‘fourth industrial revolution’; a transformation of society that will be unlike anything we have experienced before, presenting us with challenges but also great opportunities. We are responding by sharpening our focus and strengthening our efforts to create value. We are investing in science and innovation, and building new capabilities and platforms to secure our long-term prospects while at the same time delivering the sustainable, profitable growth you expect from us.



Corporate Governance


Our Board of Directors sets our long-term strategy and provides oversight on the basis of strong principles and an appropriate tone from the top. It ensures the long-term success of our company based on a clear strategy and good corporate governance.



Strategy


Nutrition plays a profound role in everyone’s life. Our strategy focuses on delivering distinct benefits to people through the food and beverages, products and services we provide. Over 150 years we have built a successful business by understanding and anticipating the needs of society, and continuously adapting ourselves to seize the opportunities presented to us.



Financial review


Our 2016 organic growth was at the high end of the industry but at the lower end of our expectations. We saw a solid trading operating profit margin improvement and our cash flow grew significantly.

CHF 89.5 billion

Sales

CHF 13.7 billion

Trading operating profit

3.2%

Organic growth

15.3%

Trading operating profit margin

2.4%

Real internal growth

+30 basis points

Trading operating profit margin (Constant currency)

CHF 2.76

Earnings per share

+3.4%

Underlying earnings per share (Constant currency)

CHF 15.6 billion

Operating cash flow (112.0% of net financial debt)

CHF 10.1 billion

Free cash flow

CHF 2.30

Proposed dividend

+2.2%

Proposed dividend increase

44.9%

Of total sales are from geographic area AMS

30.0%

Of total sales are from geographic area EMENA

25.1%

Of total sales are from geographic area AOA



The highlights


Ever since Nestlé was founded we have provided quality products and services that help shape a better world. Henri Nestlé created an infant cereal that saved the life of a child. We share his belief that through innovation we can enable healthier and happier lives. We share his passion for creating the tastiest and healthiest products, building, sharing and applying our nutritional knowledge, enhancing quality of life and contributing to a healthier future.



150 years


Our 150th anniversary celebrations were an opportunity to honour the vision of our founders: a better world through nutrition. That passion for nutrition is echoed today in the efforts of our employees, working with our partners, to create products and services that enhance quality of life and contribute to a healthier future.



Downloads


The Annual Report contains our Annual Review, the Corporate Governance Report and our Financial Statements. It is published alongside the summary report 'Nestlé in society: Creating Shared Value and meeting our commitments'.