The rebound in out-of -home sales and hybrid working habits helped Nestlé UK grow revenues to near £2bn last year, but mounting cost pressures suppressed profits.
The UK arm of the world’s largest food group saw revenues jump 13.2% to £1.93bn in 2021 – coming on top of more modest 1.6% growth in its pandemic-hit 2020 financial year.
Subsidiary accounts showed Nespresso and petfood remained in strong growth, with its waters business bouncing back amid the return of on-the-go consumption.
Coffee pod arm Nespresso continued the strong growth seen in lockdowns last year, thanks to the rise in home working habits – helping 2021 sales grow 7% to £308.2m.
Meanwhile, the booming petcare market helped Nestlé Purina UK grow sales by 12.9% to £514.4m.
Finally Nestlé Waters UK saw an 8.2% growth in volumes sold – though intercompany sales of £104.9m are not comparable to the prior year due to internal reorganisation.
Overall, operating profits were up a more modest 4.4% to £124.8m, as margins were affected by rising costs.
A Nestlé UK spokesperson commented: ““We are pleased that our strong brands helped Nestlé UK to withstand considerable headwinds in 2021 as can be seen in the increase in turnover.
“However, cost pressures continue to grow and this has meant a very small increase in operating profit.”
Headline pre-tax profits doubled from £121.4m to £243.5m due to non-trading items, including a rise in income and pension recharges from group companies and a reduction in interest payments.
In July Nestlé upgraded full year global sales expectations as first half sales rose on pricing and volume growth, but margin forecasts were downgraded due to the impact of mounting costs.
The group posted better-than-expected underlying sales growth of 8.7% in its second quarter as prices rose 7.6%.
However, delays in cost input recovery have resulted in margins contracting with the group becoming the first consumer giant to guide down margin expectations for the year.
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