Nestlé delivers 3.5% organic growth in first half of 2009

In the first six months of 2009, Nestlé achieved organic growth of 3.5%, including 0.5% real internal growth. Divestitures, net of acquisitions, reduced Group sales by 0.7%, whilst the currency effect resulted in a 4.3% reduction due to the strength of the Swiss franc compared to many other currencies. These factors resulted in a decline in Nestlé Group sales of 1.5%, to CHF 52.3 bn. Food and Beverages' sales reached CHF 48.3 bn, with organic growth of 3.4%, including real internal growth of 0.1%. This builds on the strong first half of 2008 when Nestlé achieved organic growth of 8.9%. The Group's EBIT grew to CHF 7.4 bn, resulting in an increased EBIT margin of 14.1% of sales. This represents a 30 basis points improvement, both in constant and reporting currencies. Food and Beverages' EBIT margin was up 20 basis points in constant currencies and 10 basis points reported, to 12.4%.

Confectionery business achieved sales of CHF 5.1 bn, 4.3% organic growth and -1.3% real internal growth. The EBIT margin increased by 60 basis points due to efficiencies and product lines streamlining. Kit Kat continued its excellent performance with strong organic growth and market share gains. The UK business continued to perform well with its focus on its seven key brands, as did the US. Overall, the emerging markets in Asia, Africa, the Middle East and Latin America continued to deliver strong organic growth.

Paul Bulcke, CEO of Nestlé: "With 3.5% organic growth and a 30 basis point EBIT margin improvement, Nestlé delivered a combination of growth and increased profitability in the first half of the year, and this in a very challenging business environment. The success of our efficiency initiatives enabled increased investment in consumer-facing marketing and R&D, which leads me to expect an acceleration in organic growth in the second half of 2009. Furthermore, Nestlé's healthy cash flow over the first half allowed us to return about CHF 6.5 billion in cash to shareholders. The Group remains committed to its strategic direction focused on sustainable, long-term profitable growth and is well placed to capture opportunities as economic conditions improve."

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