SWISS food giant Nestle said its net profits had plunged by a lower-than-expected 39 percent last year due to a strong Swiss franc. Net profit stood at 9.1 billion Swiss francs. The reduction of CHF 5.4 billion versus last year was mostly due to the one-off impact from the disposal in 2014 of part of the L'Oréal stake combined with the revaluation of the Galderma stake. There was also some effect from foreign exchange. Reported earnings per share at CHF 2.90 were down by 36.1%, for the same reasons. Underlying earnings per share in constant currencies were up 6.5%. The company said the lower net profits were "mostly due to the one-off impact from the disposal in 2014 of part of the L'Oreal stake." The French cosmetics firm in 2014 bought back an eight-percent stake that Nestle owned in L'Oreal, boosting the share of the family of heiress Liliane Bettencourt in the company to 33.3 percent. But the Vevey-based firm said organic growth, the real measure of a company's performance, was good at 4.2 percent and was "supported by increased momentum in real internal growth combined with continued margin improvement," according to chief executive Paul Bulcke. However, the Group's operating cash flow remained strong at CHF 14.3 billion and free cash flow was CHF 9.9 billion or 11.2% of sales. "This was the result of our focus on margins and our discipline in capital expenditure and working capital, and shows Nestlé's capability to deliver very strong cash flow despite the challenging foreign exchange environment." Average total working capital has improved by 60 basis points from 5.3% of sales to 4.7%.
