Nestlé: Corona pandemic puts a brake after a strong start to the year

According to the company, underlying trading operating profit decreased by 7.9% to CHF 7.156 bn. The underlying trading operating profit margin reached 17.4%, an increase of 30 basis points in constant currency and on a reported basis.

The Covid-19 crisis has led to profound changes in operating environments across markets. The global economy has entered a recession, supply chains have been tested and consumer behaviour has changed at a rapid pace. Nestlé quickly deployed effective measures to address this new reality. In the first half, the effects of Covid-19 on organic growth varied materially by geography, product category and sales channel, depending on the timing of outbreaks, scope of restrictions and consumer behaviour.

After a stronger-than-expected start to the year, organic growth moderated in the second quarter to 1.3%, reflecting the severe impact of movement restrictions on out-of-home businesses and some consumer destocking. In the first half, Nestlé saw sustained momentum in the Americas and positive sales development in Zone EMENA. Zone AOA saw a sales decrease, with growth turning positive in the second quarter. Organic growth was 4.1% in developed markets, based entirely on RIG. Growth in emerging markets was 1.1%. Nestlé achieved sales of CHF 2.973 bn in the product category confectionery, compared to CHF 3.450 bn in the first half of 2019.