Underlying earnings per share increased by 5.8% in constant currency and by 5.1% on a reported basis to CHF4.42 ($4.80). Earnings per share increased by 41.1% to CHF6.06 ($6.58) on a reported basis, mainly reflecting the gain on the disposal of L’Oréal shares.
Free cash flow decreased by 14.9% to CHF8.7bn ($9.44bn), reflecting temporarily higher capital expenditure and inventory levels.
Net profit grew by 38.2% to CHF16.9bn ($18.35bn). Net profit margin increased by 490 basis points to 19.4%. The gain on the disposal of L’Oréal shares more than offset higher asset impairments and other one-off items.
Sales in vegetarian and plant-based food grew at a double-digit rate, reaching around CHF800m ($868m). Nestlé Health Science recorded double-digit growth, reflecting demand for vitamins, minerals and supplements, as well as healthy-aging products. Dairy saw mid-single-digit growth, based on demand for premium and fortified milks, coffee creamers and ice cream. Infant Nutrition reported negative growth, impacted by a sales decline in China and lower birth rates globally. Sales of human milk oligosaccharides (HMOs) products continued to see growth, reaching CHF1.2bn ($1.3bn).
The board proposed a dividend of CHF2.80 ($3.04) per share, an increase of 5 centimes, marking 27 consecutive years of dividend growth.
The company has also adopted a new zone structure. As of January 1, 2022, the company is organized into five zones: Zone North America, Zone Latin America, Zone Europe, Zone Asia, Oceania and Africa, and Zone Greater China. Nestlé will report the sales and growth numbers of the new Zone structure for the first time on April 21, 2022.
The company said in 2022 it expects organic sales growth around 5% and underlying trading operating profit margin between 17.0% and 17.5%. In the mid-term, it predicted sustained mid-single-digit organic sales growth, continued moderate underlying trading operating profit margin improvements, and continued prudent capital allocation and capital efficiency improvements.
Mark Schneider, Nestlé CEO, said, "In 2021, we remained focused on executing our long-term strategy and stepping up growth investments, while at the same time navigating global supply chain challenges. Our organic growth was strong, with broad-based market share gains, following disciplined execution, rapid innovation and increased digitalization. We limited the impact of exceptional cost inflation through diligent cost management and responsible pricing. Our robust underlying earnings per share growth shows the resilience of our value creation model. The entire Nestlé team demonstrated exemplary perseverance and agility in a challenging environment.
The evolution of our portfolio continued, focusing on categories with attractive growth opportunities and differentiated offerings. Recent examples include the acquisition of the core brands of The Bountiful Company and the divestiture of the mainstream water brands in North America.
Our sustainability agenda further progressed as we enhance the well-being of our consumers, help regenerate the environment and strengthen the farming communities in our supply chains.
We continued to create value for our shareholders through disciplined capital allocation, steadily increasing dividends and significant share buybacks. Going forward, we are confident in the strength of our value creation model."