Emerging markets push up Nestle profit
By Frank Jordans |
August 12, 2010, Thursday
|
Print Edition
Print Edition
SWISS food and drinks company Nestle SA yesterday reported a 7.5 percent rise in half-year net profit to 5.45 billion Swiss francs (US$5 billion) and raised its full-year outlook as global sales increased despite adverse currency exchange rates.
The results from the maker of Nescafe, Jenny Craig and Haagen-Dazs beat analyst expectations and compared with a 5.1 billion francs profit a year earlier. Sales rose to 55 billion francs during the six-month period to June from 52 billion francs.
Nestle now expects its core food and drinks business, excluding currencies effects and one-off events, to grow 5 percent, an improvement on its previous forecast of over 3.9 percent.
"We have increased investment in our brands, people and capabilities and have prepared the company for a more challenging second half," according to Chief Executive Paul Bulcke.
Nestle said the biggest growth came from emerging markets, the sale of low-cost alternatives and a strong performance by its premium brands.
Developed markets showed some weaknesses, with lower demand for frozen food in North America and a late start of the ice cream season in Europe.
Exchange rates put a drag on sales as the Swiss franc surged against the euro during the first half.
Nestle, which earns most of its money outside Switzerland, said these adverse currency effects reduced sales in Swiss francs by 1.5 percent.
The Vevey-based company has benefited from several acquisitions, including the purchase of rival Kraft's frozen pizza business.
The results from the maker of Nescafe, Jenny Craig and Haagen-Dazs beat analyst expectations and compared with a 5.1 billion francs profit a year earlier. Sales rose to 55 billion francs during the six-month period to June from 52 billion francs.
Nestle now expects its core food and drinks business, excluding currencies effects and one-off events, to grow 5 percent, an improvement on its previous forecast of over 3.9 percent.
"We have increased investment in our brands, people and capabilities and have prepared the company for a more challenging second half," according to Chief Executive Paul Bulcke.
Nestle said the biggest growth came from emerging markets, the sale of low-cost alternatives and a strong performance by its premium brands.
Developed markets showed some weaknesses, with lower demand for frozen food in North America and a late start of the ice cream season in Europe.
Exchange rates put a drag on sales as the Swiss franc surged against the euro during the first half.
Nestle, which earns most of its money outside Switzerland, said these adverse currency effects reduced sales in Swiss francs by 1.5 percent.
The Vevey-based company has benefited from several acquisitions, including the purchase of rival Kraft's frozen pizza business.
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