Nestlé posts solid result for first half of 2016

The Swiss food and beverage giant, Nestlé, has grown sales by 3.5 per cent over the first half of 2016 to achieve sales of US$44 billion in that period. The company has also increased its trading operating profit margin by 30 basis points, to 15.3 per cent over that time. In North America, Nestlé’s Coffee-mate maintained its good growth trajectory, driven by new packaging and flavour extensions, while in Mexico and Brazil, Nescafé Dolce Gusto, Nescafé soluble coffee and ambient dairy remained the growth drivers. Nespresso continued its good growth, with a solid performance in Europe and good momentum in the Americas and Asia, Oceania and sub-Saharan Africa. The success of the VertuoLine system and increased marketing investment in North America drove positive results. Global growth was supported by the ongoing geographic expansion, including 16 new boutique openings, and limited edition Grands Crus coffees. “The first half of 2016 was in line with our expectation with growth almost entirely driven by volume and product mix, yielding further market share gains,” Nestlé’s CEO, Paul Bulcke said in a statement.

“While we continued to address challenges in China, we enjoyed good performances across the US, Europe, South East Asia and Latin America and expect this to continue in the second half. We also expect pricing, which reached historically low levels in the first half, to recover somewhat in the coming months.

“We grew our gross margin and trading operating profit through further premiumisation, continuous cost discipline and input cost tailwinds. This allowed us to significantly enhance our free cash flow.

“In these times of rapid change, we keep our focus on profitable growth by further investing in innovation, R&D, brand support and digital to engage with our consumers, meeting their changing needs.

“Overall our first half performance allows us to reconfirm our outlook for the full year.”

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