Sales and profits have fallen at Nestlé in the first half as the world’s largest food group continued to suffer from weak consumer sentiment.
Organic growth in the six months to 30 June of 2.9% came almost entirely from price rises as the group tried to offset huge costs spikes in coffee and cocoa-related categories.
The Kit Kat and Nescafé owner pushed up prices in confectionery and coffee by 10.6% and 6% respectively.
Real internal growth (RIG) – Nestlé’s measure of volumes – increased just 0.2% in the half and was down 0.4% in the second quarter as shoppers reacted to higher prices.
A strengthening Swiss franc also presented the group with currency headwinds, resulting in a 1.8% fall in total reported sales in the half to CHF 44.2bn (£41.1bn).
Underlying trading operating profit also declined 7.1% to CHF 7.3bn (£6.8bn), while net profit fell 10.3% to CHF 5.1bn (£4.7bn).
CEO Laurent Freixe, who has been charged with turning round the Swiss group’s performance, said Nestlé was “executing its strategy to accelerate performance and transform for the future”.
“We are accelerating our category growth and improving our market share, through better execution and increased investment, funded through a relentless pursuit of efficiency,” added Freixe, who has been at the helm for almost a year.
“These actions are already delivering results, with broad-based growth and a robust profit performance in the first half. Where we are investing to accelerate category growth, we are growing four times faster than the group, and our six innovation ‘big bets’ achieved sales of over CHF 200m in the first half.”
Nestlé also announced a strategic review of the mainstream and value brands in its vitamins, minerals and supplements business.
The group said the process could result in a sell-off of the Nature’s Bounty, Osteo Bi-Flex and Puritan’s Pride brands, as well as US private label, as it concentrates on global premium brands such as Garden of Life, Solgar and Pure Encapsulations.
“We have maintained our guidance for 2025, while recognising increased macroeconomic risks and uncertainties,” Freixe said.
“We remain confident that our actions to drive performance and transformation will deliver our medium-term growth and profit ambitions.”
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