Comparative Study of Nestle & Hershey
Renee H. Lucier
Financial Statement Analysis
Course Project – Week II
Nestle (NSRGY) and Hershey Foods (HSY)
I. Choice of Companies and an Overview of Their Operations and Industry – briefly outline what the company does and its industry. (5 pts)
Nestle (NSRGY) is the largest food and beverage company in the world operating within the global food and beverage industry. It provides nutrition, health, wellness products, baby foods, bottled water, cereal, chocolate, coffee, pet care products and more thru many major consumer brands. It is one of the most geographically diverse companies; only 42% of its food and beverage sales comes from North America. Nestlé’s major competitors include Hershey Foods, Kraft Foods, Unilever NV and Cadbury Schweppes. It already has a strong seat as a leader. So going forward, Nestle aims to increase the nutritional value of its products and to expand the product lines to offer therapeutic foods to people with illnesses. They desire to transform themselves from a food manufacturer to the world’s leading nutrition, health & wellness company. In pursuit of this, Nestle launched a subsidiary in 2010 which creates food-based products that prevent and treat different medical diseases. Quick Facts: * In FY 2010, Nestle had Revenues of $84.81B, a Profit Margin of 11.33% and an Operating Margin of 15.61% * Rising food prices (such as grains and dairy) increase Nestlé’s costs of production and threaten profits * Nestle operates under eight different business segments: Milk Products (18.7% of sales), Beverages (18% of sales), Prepared Dishes & Cooking Aides (16% of sales), Confectionery (11% of sales), Other Foods & Beverages (9.5% of sales), Pet Care (9.3% of sales), Pharmaceutical Products (0.7% of sales) and the newest subsidiary, Healthcare Nutrition (just launched in 2010). * NSRGY is presently trading at $59.90. Its 52-week range is 52.85 – 65.12. NSRGY has a P/E ratio of 10.5.
Hershey Foods (HSY) is the largest
Financial Statement Analysis
Course Project – Week II
Nestle (NSRGY) and Hershey Foods (HSY)
I. Choice of Companies and an Overview of Their Operations and Industry – briefly outline what the company does and its industry. (5 pts)
Nestle (NSRGY) is the largest food and beverage company in the world operating within the global food and beverage industry. It provides nutrition, health, wellness products, baby foods, bottled water, cereal, chocolate, coffee, pet care products and more thru many major consumer brands. It is one of the most geographically diverse companies; only 42% of its food and beverage sales comes from North America. Nestlé’s major competitors include Hershey Foods, Kraft Foods, Unilever NV and Cadbury Schweppes. It already has a strong seat as a leader. So going forward, Nestle aims to increase the nutritional value of its products and to expand the product lines to offer therapeutic foods to people with illnesses. They desire to transform themselves from a food manufacturer to the world’s leading nutrition, health & wellness company. In pursuit of this, Nestle launched a subsidiary in 2010 which creates food-based products that prevent and treat different medical diseases. Quick Facts: * In FY 2010, Nestle had Revenues of $84.81B, a Profit Margin of 11.33% and an Operating Margin of 15.61% * Rising food prices (such as grains and dairy) increase Nestlé’s costs of production and threaten profits * Nestle operates under eight different business segments: Milk Products (18.7% of sales), Beverages (18% of sales), Prepared Dishes & Cooking Aides (16% of sales), Confectionery (11% of sales), Other Foods & Beverages (9.5% of sales), Pet Care (9.3% of sales), Pharmaceutical Products (0.7% of sales) and the newest subsidiary, Healthcare Nutrition (just launched in 2010). * NSRGY is presently trading at $59.90. Its 52-week range is 52.85 – 65.12. NSRGY has a P/E ratio of 10.5.
Hershey Foods (HSY) is the largest
Bibliography: 1) Yahoo! Finance, The Hershey Company (HSY), Retrieved on July 20, 2012 from http://finance.yahoo.com/q/h?s=HSY&t=2012-07-03. 2) Yahoo! Finance, Nestle SA (NSRGY), Retrieved on July 21, 2012 from http://finance.yahoo.com/q?s=NSRGY. 3) WikInvest, Nestle (NSRGY), Retrieved on July 20, 2012 from http://www.wikinvest.com/stock/Nestle_(NSRGY). 4) WikInvest, Hershey Foods (HSY), Retrieved on July 20, 2012 from http://www.wikinvest.com/wiki/Hershey. 5) The Hershey Company website, Hershey Company (HSY) 10K Annual Report, Retrieved on July 18, 2012 from http://www.hersheys.com/assets/pdfs/hersheycompany/TheHersheyCompany_10K_20120217.pdf. 6) Nestle Foods website, Nestle SA Reports & Downloads, Retrieved on July 18, 2012 from http://www.nestle.com/Common/NestleDocuments/Documents/Library/Documents/Annual_Reports/2011-Annual-Report-EN.pdf. 7) International Cocoa Organization, The Chocolate Industry, Retrieved on July 21, 2012 from http://www.icco.org/about-cocoa/chocolate-industry.html. 8) ReportLinker, Chocolate Market Reports, July 2012, Retrieved on July 22, 2012 from http://www.reportlinker.com/report/best/keywords/chocolate?utm_source=adwords1&utm_medium=cpc&utm_campaign=Food&gclid=COzqpOOAr7ECFQgFnQoddHAAwA. Submit your outline in the Week 2 Dropbox titled "Horizontal Analysis."