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Nestle Maintains Momentum During First Half

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Nestle Maintains Momentum During First Half

Nestle Maintains Momentum During First Half
August 09
11:05 2012

Reflecting growth across all its global regions, Nestle has reported a 7.5% increase in group sales to SFr44.1 billion (Eur36.7 billion) with net profit up 8.9% to SFr4.7 billion for the first half of 2012. Organic sales growth was 6.6%, composed of real internal growth of 2.9% and pricing of 3.7%. Acquisitions, net of divestitures, contributed 2.7%.

The Swiss food and beverage group managed to offset rising input costs through savings from its Nestle Continuous Excellence programme as well as timely pricing increases. Group trading operating profit rose by 6.3% to SFr6.6 billion. The margin was 15.0%, in line with expectation that the margin performance would be second-half weighted. Nestle is continuing to invest in R&D to drive innovation, maintaining the level at 1.6% of sales.

Growth was achieved in all regions of the world. The Americas exhibited organic growth of 6.4%, Europe 2.6% and Asia, Oceania and Africa 12.6%. Nestle’s business grew 12.9% in emerging markets and 2.6% in developed markets.

Paul Bulcke (pictured), chief executive of Nestle, comments: “We continue to drive innovation globally, ranging from popularly positioned products to super premium offerings. We are continually opening new routes-to-market to reach emerging consumers, and using new media to increase both our direct engagement with consumers and our return on brand investment. This approach has delivered profitable growth in both emerging and developed markets. Our first-half top line growth and our trading operating profit margin, together with our focus on capital efficiency, allow us to reconfirm our full-year outlook.”

Nestle’s full-year outlook is for organic growth of 5% to 6%, improved margin and underlying earnings per share in constant currencies.

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