Nestlé: strong global half-year performance hurt by strong Swiss franc

Posted by AFN Staff Writers on 11th August 2011

Nestlé has reported organic growth of 7.5 per cent, excluding exchange rates, and global profits of 15.1 per cent for the last six months, according to a half-year report released August 10 2011.

The report says that Nestlé performed well in emerging and developed markets, growing 5.7 percent in the Americas, 5.8 per cent in Europe and 13.3 per cent in Asia, Oceania and Africa.

The strong Swiss franc hit profits, lowering Nestlé’s real internal growth to 4.8 per cent.

“Nestlé continued to make good progress in a period characterised by political and economic instability, natural disasters, rising raw material prices and, yes, a strong Swiss franc, said Paul Bulcke, Nestlé CEO.

“This has made for an extremely tough, volatile and competitive environment. But by leveraging our competitive advantages, investing behind our growth drivers and excelling in operational efficiency and effectiveness, we managed to drive growth not only in emerging markets but also in developed countries, especially in Europe.

“Furthermore we improved our trading operating margin while increasing investment in our brands. For the full year, we expect organic growth at the top end of the 5% to 6% range, combined with a margin increase in constant currencies.”

Soluble coffee, confectionary and ready-to-drink beverages were the big performers in Nestlé’s Oceania region, which includes Australia, New Zealand and the Pacific Islands. Jenny Craig also performed well in Oceania, unlike in the United States where it faced a weak economic environment and a high level of competitive pressure.