News

Nestlé reports 2.8% organic growth for 1H18

1 Aug 2018

Nestlé has reported its half-year results for 2018, noting continued progress with the Nestlé value creation model and saying that it is on track to meet its full-year guidance.

Nestlé has reported its half-year results for 2018, noting continued progress with the Nestlé value creation model and saying that it is on track to meet its full-year guidance, supported by increased momentum in the United States and China, as well as in infant nutrition. Organic growth was 2.8%, with 2.5% real internal growth (RIG) and pricing of 0.3%. Total sales increased by 2.3% to CHF 43.9 billion (6M-2017: CHF 42.9 billion). The underlying trading operating profit margin was 16.1%, an increase of 20 basis points in constant currency and on a reported basis. Trading operating profit margin was 14.6%, a decrease of 50 basis points on a reported basis due to higher restructuring costs and net other trading items. Earnings per share increased by 21.4% to CHF 1.92 on a reported basis. Underlying earnings per share increased by 9.2% in constant currency and by 10.4% to CHF 1.86 on a reported basis.

Nestlé confirmed its full-year guidance for 2018, with organic sales growth expectation narrowed to around 3%; underlying trading operating profit margin improvement in line with its 2020 target. Restructuring costs are expected at around CHF 700 million. Underlying earnings per share in constant currency and capital efficiency are expected to increase.

Mark Schneider, Nestlé CEO said: “Our first half results confirmed that our strategic initiatives and rigorous execution are clearly paying off. Nestlé has maintained the encouraging organic revenue growth momentum we saw at the beginning of the year. In particular, the United States and China markets showed a meaningful improvement. We were also pleased by the enhanced organic growth in our core infant nutrition category.

Our margin development is fully consistent with our 2020 target. We are creating value by pursuing growth and profitability in a balanced manner. In line with this approach, we have accelerated our product innovation efforts to drive future growth and initiated significant cost reduction efforts, in particular in Zone EMENA and at our Corporate Center. As we look towards the second half of 2018, we expect further improvement in our organic revenue growth. Margin improvement is expected to accelerate with further benefits from our efficiency programs and more favorable commodity pricing.”