Nestle 1

Nestlé, the global food giant, has reported a 2.5% fall in first-half net profit from CHF4.63bn (£3.03bn) to CHF4.52bn on sales off 5.8% at CHF42.8bn, which were impacted by foreign exchange.

Organic growth in developed markets accelerated to 2.2% and it saw 7.3% organic growth in emerging markets.

Innovation and premiumisation continued to drive the growth in Western Europe. Single-serve cat food, Nescafé Dolce Gusto and frozen pizza were the main contributors.

France, Benelux and the Nordics performed well in the deflationary environment. Consumer confidence in Southern Europe was subdued, with the turmoil in Greece having an impact, the group reported.

The company said the result reconfirmed the group’s outlook for the full year during which it aimed to achieve organic growth of about 5% with improvements in margins and underlying earnings per share in constancy currencies, and capital efficiency.

Paul Bulcke, Nestlé’s chief executive, said the first-half results were in line with company expectations – broad-based across categories and world regions, “solid even in difficult circumstances, and consistent with our strong performance over time”.

They reflected “the relevance and strength” of the group’s nutrition, health and wellness strategy and its “discipline in execution”, he said.

“Our investments in the new growth platforms Nestlé Health Science and Nestlé Skin Health are delivering and complement the good ,omentum in our food and beverages businesses. This allows us to confirm the outlook for the full year,” Bulcke added.

Bernstein senior research analyst Andrew Wood said the results were “quite pleasing”, led by better-than-expected organic top-line growth. Liberum analysts Robert Waldschmidt and Anubhav Malhotra rated the stock a “hold”.