Nestlé has reported first half sales of CHF 44.1 billion, up 6.6% organically, with operating profit up 6.3% and underlying earnings per share up 12.4%.
The company reconfirmed its earlier guidance for the full year of organic growth of 5% to 6%.
“Our first-half performance shows the relevance of our strategic roadmap in today’s new reality and demonstrates our swift and disciplined execution behind it, making the right choices at the right time,” said Paul Bulcke, Nestlé CEO.
“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.”
Nestlé noted the impact of input cost pressure, which was mitigated by savings from the company’s Continuous Excellence programme as well as timely pricing.
Nestlé said that it expected the tough trading environment, especially in developed markets, to continue in the second half. However, it expected some easing in input cost pressures in the second half.
Consumer facing marketing spend was up in constant currencies and, said Nestlé, is being used more efficiently and effectively, increasing the return on investment in its brands and support for launch activities globally.
The Nestlé Group continued to grow in all regions of the world: the Americas achieved organic growth of 6.4%, Europe 2.6% and Asia, Oceania and Africa 12.6%. Its business grew 12.9% in emerging markets and 2.6% in developed markets.
In North America, said Nestlé, where consumer confidence continued to be low, several food categories were under pressure including frozen food.
In Latin America, the two largest markets - Brazil and Mexico -had a good start to the year as did the southern countries of South America. Among categories, the key growth drivers were soluble coffee and chocolate
Southern Europe continues deterioration
Nestlé noted that the European environment deteriorated during the year, particularly Southern Europe.
In Western Europe, France, the Great Britain and the Benelux regions were highlights, while there was also growth in the Iberian region, Italy, and Greece.
In Central and Eastern Europe, the Ukrainian, Adriatic, and Romanian markets continued to deliver strong performances. In Russia, where trading conditions have been tough for a while, Nestlé said that its business experienced a pick-up in growth.
In Asia, Oceania and Africa, Nestlé achieved double-digit growth, building on a strong 2011. The main drivers of this performance were brand investment and product innovation, deeper and wider distribution with a multi-tier strategy from popularly positioned products to premiumisation, while investing in capacity and capabilities for future growth.
Emerging markets delivered double-digit growth in almost all geographies and categories, most notably in Greater China, Africa, and the Middle East. In China there was a strong performance in ready-to-drink, ambient culinary and in confectionery