Nestlé gains some breathing space with improved H1 | Progresiv
Nestlé has reported better-than-expected results for its fiscal first half, which is likely to offer the world’s largest food maker some respite from the pressure exerted by activist investor Daniel Loeb. 
For the six months, sales were up 2.3% to 43.9bn Swiss francs (+2.8% organic basis), with underlying trading profit up 3.5% to 7.1bn francs, and net profit jumping up 19% to 5.8bn francs. The results easily topped analysts’ forecasts for the half, and have seen the group’s shares rise by nearly 3% in early morning trading.
In the Americas, sales were up 1% on an organic basis to 14.2bn francs, helped by increased momentum in the US. The group reported solid growth for brands such as Purina, Coffeemate, and Hot Pockets in the country. It also recorded growth in Latin America, but on a slower level compared to 2017.
In the Europe, Middle East & North Africa unit, organic sales grew 2.5% to 9.3bn francs, helped by a return to growth in Western Europe, and mid-single-digit growth in all other regions.
The group recorded its strongest growth in Asia, Oceania, and sub-Saharan Africa, where organic sales were up 4.4% to 10.6bn francs. The results were helped by accelerated growth in China, as well as solid results in Indonesia and Vietnam.
Finally, sales at its Waters unit rose by 1% to 4bn francs on an organic basis, as improved results in North America offset slight weakness in Europe.
Nestlé said the results highlighted the “continued progress” of its “value creation model”, adding that it was on track to meet full-year targets. CEO Mark Schneider noted: “Our first half results confirmed that our strategic initiatives and rigorous execution are clearly paying off … Our margin development is fully consistent with our 2020 target. We are creating value by pursuing growth and profitability in a balanced manner.” (www.kamcity.com)
