Nestlé: organic growth in a volatile trading environment

In the first half of 2014 the Nestlé SA, Vevey, has delivered organic growth of 4.7%, composed of 2.9% real internal growth and 1.8% pricing. Total sales were CHF 43 bn. The strong Swiss Franc continued to have a substantial negative impact (- 8.8%) and after divestitures, net of acquisitions (- 0.7%), reported total sales were down by 4.8%. The Group's trading operating profit was CHF 6.4 bn. The reported trading operating profit margin was 15.0% (-10 basis points), +30 basis points in constant currencies.

The cost of goods sold increased by 20 basis points, reflecting input cost pressures, especially in dairy. Total marketing and administrative costs decreased by 30 basis points, reflecting efficiencies. At the same time we continued to strengthen the support for our brands, increasing consumer facing marketing spend in constant currencies. Net profit was down to CHF 4.6 bn, reported earnings per share were CHF 1.45, both impacted by the strong Swiss Franc. Underlying earnings per share in constant currencies were up 3.6%. Operating cash flow was CHF 4.3 bn. Working capital remains an area of focus and we have continued to lower it as a percentage of sales.

www.nestle.com