The company spent the year shifting focus to strengthen its nutrition, health and wellness portfolio with the acquisitions of Australian cereal business Uncle Tobys, weight management company Jenny Craig and the nutrition group Novartis.
In addition, Nestlé increased its marketing and administration spend by 6.3 per cent last year as well as upping its investment in research and development 16 per cent to CHF1.7 billion (€1.04bn).
Chairman and CEO Peter Brabeck-Letmathe said: "We are seeing the benefits of the Group's transformation into a nutrition, health and wellness company, with stronger innovation and branding, as well as improved efficiency.
"Our competitiveness was further boosted by higher spending on marketing and R&D, the roll-out of GLOBE and shared service, as well as our commitment to savings programme."
In drinks, Nestlé Waters continued to profit from a shift towards healthier soft drinks, growing sales by eight per cent.
Big brand Vittel appeared to have had a muted year in Europe, out-done by the younger Aquarel product.
Emerging markets and North America were the real growth drivers in the water division, although more will be revealed at a press conference on this business next month.
In coffee, Nespresso again performed well, revealing how Nestlé has worked to tap higher value coffee markets over the last couple of years.
The firm announced last autumn it would build a Nespresso factory in Switzerland and that the move would keep Nespresso on track to become a CHF2bn company (€1.3bn) by the end of 2010.
Nestlé predicts organic growth of between 5 and 6 per cent during the coming year in spite of " continued strong input cost pressure, especially on agricultural raw materials and more investment in brands, R&D and additional capacity aimed at further accelerating the Group's transformation into a nutrition, health and wellness company."