Yesterday, Nestlé, the global food and beverage giant with over 2,000 brands and operations in 191 countries, released its full-year 2019 financial results. According to the report, Nestlé's total sales in 2019 reached CHF 92.568 billion, approximately RMB 661.44 billion, an increase of 1.23% compared to the same period last year (2018 total sales were CHF 91.4 billion, equivalent to RMB 618.57 billion). Net profit was CHF 12.609 billion, approximately RMB 90.097 billion, up 24.4% year-on-year, achieving three consecutive years of growth. Additionally, in 2019, Nestlé's organic growth was 3.5%, with real internal growth reaching 2.9%, the highest level in the past six years. -01- According to the financial report, growth was mainly driven by two factors: the strong momentum in the U.S. market and the global performance of Purina Pet Food. The U.S. was Nestlé's primary source of revenue in 2019, reaching CHF 28.831 billion. The Chinese market was Nestlé's second-largest market after the U.S. In 2019, Nestlé Greater China's sales were CHF 6.913 billion, approximately RMB 48.121 billion. It should be noted that according to Nestlé's disclosed exchange rates, in 2019, 100 RMB was equivalent to 14.366 Swiss francs, while in 2018 it was 14.776 Swiss francs. This means that although 2018 revenue was CHF 7.004 billion, based on exchange rate calculations, 2019 RMB revenue increased by RMB 700 million, a year-on-year increase of 1.48%. As for sales by category, compared with 2018 data, Nestlé's pet food brand Purina saw rapid growth in 2019, reaching 7.41%. Additionally, in the Chinese market, seasonings, coffee, and ice cream businesses performed well, and the infant nutrition business achieved "slight growth." Nestlé stated that this was mainly due to the boost from the Chinese Lunar New Year in the fourth quarter. However, sales of Yinlu peanut milk and eight-treasure porridge declined. -02- According to public information, Nestlé increased its stake in Yinlu twice in 2017 and 2018, completing 100% control of the Yinlu brand. However, last October, it was reported that Nestlé had "put Yinlu and Hsu Fu Chi on the shelf" at a valuation of $1 billion. Regarding the Yinlu business, Nestlé mentioned that due to underperformance in the second half of last year, including the Mid-Autumn Festival period, and intense competition, the company reviewed Yinlu's strategy, product portfolio, and business plans, and accordingly made an impairment charge. According to Nestlé CEO Mark Schneider, Yinlu brought pressure to performance last year, mainly from the peanut milk and congee categories. Although Yinlu's related business has shown stable momentum, there is still a lot of work to be done, and he currently has nothing else to announce. This indirectly reflects that Nestlé has not yet given up on Yinlu. -03- Meanwhile, the Starbucks coffee retail business, also acquired in 2018, has shone brightly, subsequently launching 24 new coffee products at once, including whole bean coffee, roasted ground coffee, and Starbucks coffee capsules. This has significantly boosted Nestlé's goodwill, and through close ties and promotion with Starbucks, Nestlé's premium roasted coffee product line in North America has been enriched. Bloomberg noted that Nestlé's acquisitions and divestitures over the past three years accounted for 12% of total sales in 2017. Schneider also predicted today that the scale over the next three years will be similar. In 2018, Nestlé's acquisition and divestiture transactions were valued at up to CHF 14 billion. In 2019, Nestlé also completed several deals, including selling its skin health business (Nestlé Skin Health) for CHF 10.2 billion to EQT Group and Abu Dhabi Investment Authority. The proceeds from this sale also enabled Nestlé to pursue other businesses. Schneider also stated that as an acquisition not completed in 2019, Nestlé will complete the acquisition of pharmaceutical brand Zenpep in the first half of 2020, continuing to expand its influence in the pharmaceutical field. -04- He also mentioned the impact of the epidemic on business: "In the past few weeks, the spread of the coronavirus has prompted the Nestlé China team to make tremendous efforts. Nestlé's focus is to ensure the safety of our employees and their families and to introduce protective measures in all our workplaces. Chinese authorities are taking measures to contain the epidemic, and we are working closely with them based on our extensive local experience and expertise." According to Nestlé's official website, shortly after the outbreak, Nestlé China, together with its brands such as Wyeth Nutrition, Hsu Fu Chi, Yinlu, and Totole, mobilized various nutritional supplement products from across the country to deliver to medical workers fighting the coronavirus pneumonia. Additionally, it donated approximately RMB 40 million in products and cash through the Red Cross. Schneider also pointed out that Greater China is Nestlé's second-largest market, accounting for about 8% of global sales, and it is still too early to quantify the financial impact of the epidemic.