Nestle profit climbs 8% during first half

by Staff
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VEVEY, SWITZERLAND — Net profit in the first half of 2010 rose 8% at Nestle S.A., but executives with the Vevey-based company said they are preparing for challenging times ahead.

For the first half the company had a net profit of 5.5 billion Swiss francs ($5.2 billion). Sales for the first half were 55.3 billion Swiss francs ($52.6 billion), up 6% from the same period of the previous year.

“The group’s very successful first-half performance is due to the excellent execution of our proven strategies in all parts of the world, covering the full range from premium brands to value-priced offerings, combined with the ongoing successful implementation of Nestle Continuous Excellence,” said Paul Bulcke, chief executive officer. “We have increased investment in our brands, people and capabilities and have prepared the company for a more challenging second half, which allows me to reconfirm our earlier full-year guidance for food and beverages — organic growth of around 5% combined with an increase in E.B.I.T. margin in constant currencies.”
Strength during the period also may be attributed to growth in emerging markets as well as in Western Europe and North America.

Sales in Zone Americas were 16,302 million Swiss francs ($15,496 million), which represented 6% organic growth. The company said in the Americas the frozen prepared meals category suffered from weak consumer demand as the Stouffers’ and Hot Pockets brands improved, but Lean Cuisine continued to decline in the competitive business environment. However, the frozen pizza business, led by the DiGiorno brand, did well and achieved about 14% organic growth.

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