Soaring sales of Nespresso helped boost Nestlé’s UK revenues last year, but rapidly rising costs meant the food giant’s UK arm experienced a 57% drop in operating profits.
Overall revenues for Nestlé UK were up 3% in 2018 to £1.63bn according to newly filed accounts at Companies House.
Double-digit growth at coffee capsule business Nespresso was a key contributor, with the brand growing UK sales by 11.6% to £221.9m.
Petfood arm Nestlé Purina Petcare rebounded in the UK after a weaker year in 2017, with sales growing 3.9% to £522m, while its Nestlé Waters UK arm posted growth of 5.8% to £143m, helped by a strong summer.
However, overall Nestlé UK operating profits fell back from £135.4m in 2017 to £58.8m as cost of sales rose 9.1% and distribution costs rose 7.6%.
Nestlé said the post-EU referendum drop in the value of the pound against major currencies had “resulted in adverse foreign exchange impact, particularly on purchases from the Eurozone”.
“This inflationary impact has begun to be seen, but the medium to long-term exposures are currently uncertain and will depend on the outcome of negotiations.”
The 2018 profits drop comes on top of an 11% drop in operating profits in 2017, driven by “higher commodity prices and other costs”.
Nestlé’s UK figures include sales from its core drinks, confectionery and food businesses, as well as its three subsidiaries - Purina, Waters and Nespresso - that also report their accounts individually.
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