The KitKat, Smarties and Nespresso maker has announced another year of slowing growth in a tough environment and has slashed its sales growth target as a result.
The news has left a bit of a bad taste in investors' mouths – shares edged down 1.37 per cent in early trading.
Nestle is aiming for sales growth of two to four per cent this year.
Net profit fell to 8.5bn Swiss francs (£6.8bn), which was some way below the average estimate for 9.59bn francs. Nestle said profit was hit by several items, the largest of which was a one-off non-cash adjustment to deferred taxes.
Organic sales slowed to 3.2 per cent, down from 4.2 per cent in 2015, and below analysts' estimates for 3.4 per cent.
Growth in emerging markets, which had previously been propelling expansion, slowed to 5.3 per cent from seven per cent a year ago.
Nestle said pricing improved in the second half of last year and should continue to do so this year.
Why it's interesting
New boss Mark Schneider is restructuring at the food firm in an effort to rejuvenate growth. Schneider said he expects restructuring costs to rise to about 500m francs in 2017, putting profitability under pressure – that will probably be stable.
He has a lot on his plate from deflation in Europe to inflation in Russia and Brazil, as well as hungrier competition in the US chocolate market.
What the company said
Chief executive Schneider said: "Our 2016 organic growth was at the high end of the industry but at the lower end of our expectations. We saw a solid trading operating profit margin improvement and our cash flow grew significantly. Based on these results, our board of directors is pleased to propose the 22nd consecutive dividend increase, underlining our commitment to continuity."
In order to drive future profitability, we plan to increase restructuring costs considerably in 2017.
As a result, the trading operating profit margin in constant currency is expected to be stable. Underlying earnings per share in constant currency and capital efficiency are expected to increase.
Nestle continues to invest in future growth and operating efficiency, targeting mid-single digit organic growth and significant structural cost savings by 2020.