Nestlé improves profit margins in first half of 2017

Nestlé has reported organic growth of 2.3 per cent for the first half of 2017. This comes in addition to the company increasing its underlying trading operating profit margin by 10 basis points over the same period. The first half results point to an increase in underlying earnings per share in constant currency and capital efficiency for the whole of 2017, the company said. According to the company’s report, Nespresso delivered good organic growth over the period, with double- digit growth in North America.
“We are pleased with our value creation progress in the first half of 2017. This includes solid operational improvements as well as portfolio management choices and our decision to increase balance sheet efficiency,” said Nestlé’s CEO, Mark Schneider. “Organic growth in the first half did not fully meet our expectations. While volume growth remains at the high end of our industry, pricing continues to be soft. Asia and Africa confirmed their positive growth momentum. Western Europe experienced a volume decline, which we consider largely transitory. North America and Latin America saw a slight improvement in organic growth, mainly driven by volume. Our coffee, water and petcare businesses confirmed their growth potential with solid first-half results. “Profitability is in line with our expectations, as restructuring savings and efficiencies have offset higher commodity costs. We are accelerating our margin improvement initiatives. “We confirm our 2017 guidance with organic growth likely to be in the lower half of the 2-4 per cent range. Our 2020 mid-range expectations for organic growth remain unchanged,” he said.