February 16, 2017 / 6:35 AM / a year ago

Nestle targets 2-4 pct growth this year after 2016 profit miss

VEVEY, Switzerland, Feb 16 (Reuters) - Food group Nestle said it aimed for 2-4 percent underlying sales growth this year after net profit fell and underlying sales rose less than expected last year, hit by slowing emerging markets and a deflationary environment.

Nestle will step up cost savings to boost profitability and replaced its “Nestle model” of 5-6 percent underlying sales growth with a new mid-term goal of “mid-single-digit organic growth and significant structural cost savings by 2020”.

Net profit at the group, led by new Chief Executive Ulf Mark Schneider since Jan. 1, fell to 8.5 billion Swiss francs ($8.47 billion) last year, well short of the average estimate for 9.59 billion francs in a Reuters poll, hit by a one-off non-cash adjustment to deferred taxes.

Underlying “organic” sales growth slowed to 3.2 percent from 4.2 percent in 2015. ($1 = 1.0031 Swiss francs)

Reporting by Silke Koltrowitz; Editing by Michael Shields

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