Kit Kat and Nesquik maker to hand investors up to £15.8bn

Kit Kat maker Nestle released its results. Photo: PA
Kit Kat maker Nestle released its results. Photo: PA

The food giant Nestle is set to hand its investors up to £15.8bn ($20.2bn) over the next three years, largely by buying back shares.

The company (NESN.SW) highlighted strong growth in the US and its Purina PetCare brand as it said its strategy was generating “attractive cash returns for shareholders” in its latest sales update on Thursday.

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The handout to shareholders is expected to begin in January next year mainly through a share buyback programme, though it may also pay out out “one or more special dividends” up to 2022.

But it said the amount of cash available could be “adjusted” if any sizeable acquisitions take place. The Nestle board made clear their “preference for value-creating investments to expand the company's core food, beverage and nutritional health products business” in the statement.

Its total global sales were up 2.9% to £68.4bn in the first nine months of the year compared to the previous year, but dropped 0.6% in Europe, the Middle East and North Africa.

Petcare products saw the fastest growth of any goods, up 7.3% over the year to £53.9bn ($69bn), on Nestle’s preferred measure of ‘organic growth’ which factors out currency swings and acquisitions.

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Nutrition and health science product sales were up 5.2%, milk products and ice cream were up 3%, and both powdered and liquid drinks and prepared dishes and cooking aids were up 2.8%. Confectionery was up 2.3%.

Water lagged the pack with 0.9% growth, with the company also announcing separately it would reorganise its Nestle Waters arm, integrating it with the rest of the business which is split into three global regions. It is one of the world’s biggest bottled water firms, owning brands including San Pellegrino, Buxton, Vittel and San Pellegrino.

Mark Schneider, Nestle CEO, said: "We continue to see good momentum in our largest market, the United States and very strong growth for Purina PetCare globally.

“With prudent investments and a disciplined approach to acquisitions our value creation model is generating profitable growth and attractive cash returns for our shareholders."

The company also confirmed its full-year guidance for 2019, expecting organic sales growth of around 3.5%.

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