Nestlé: organic growth in the first half-year not fully meets Schneiders expectations

Sales were impacted by net divestments of - 2.3%, down to CHF 43.0 bn (- 0.3%). Underlying trading operating profit margin increased by 10 basis points in constant currency, stable at 15.8% on a reported basis. Underlying earnings per share increased by 3.4% in constant currency and by 2.1% to CHF 1.68 on a reported basis 2017. Nestlé sees full-year guidance confirmed with organic growth likely to be in the lower half of the 2-4% range. Confectionery was the only category with negative growth although it stabilised in the second quarter.

Mark Schneider, Nestlé CEO, commented: ”We are pleased with our value creation progress in the first half of 2017. This includes solid operational improvements as well as portfolio management choices and our decision to increase balance sheet efficiency. Organic growth in the first half did not fully meet our expectations. While volume growth remains at the high end of our industry, pricing continues to be soft. Asia and Africa confirmed their positive growth momentum. Western Europe experienced a volume decline, which we consider largely transitory. North America and Latin America saw a slight improvement inorganic growth, mainly driven by volume. ”