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Growth For Nestlé Amid Concerns For US Business

Published on Aug 9 2012 9:34 AM in A-Brands

Growth For Nestlé Amid Concerns For US Business

Nestlé released its half year results today, declaring an increase of 7.5 per cent in sales to CHF 44.1 billion and a boost of 8.9 per cent to net profit, reaching CHF 5.1 billion.

Organic growth for the group came in at 6.6 per cent, made up of real internal growth of 2.9 per cent and pricing of 3.7 per cent. Emerging markets provided growth of 12.9 per cent, compared to 2.6 per cent in developed markets, with organic growth of 6.4 per cent in the Americas and 12.6 per cent in Asia, Oceania and Africa. Europe was by far the Swiss company's least successful market during the first six months of this year, with growth of 2.6 per cent, but Great Britain, France and the Benelux delivered strong performances with surprising growth in Greece.

Earlier this week the Financial Times reported that a study of Nielsen market data by Bernstein Research suggests that Nestlé has been losing market share in the US in almost every period over the last three years. In the first six months of this year shrinkage hit 75 basis points (bps), it was reported. 

Nestlé's performance was aided by a reported reduction in marketing and administration costs of 20 bps and a decrease of 30 bps in distribution costs.

Nestlé Nutrition saw 5.7 per cent organic growth across the segment and the company's billionaire brands such as Nescafé, KitKat and Herta and innovation platforms such as Nescafé Dolce Gusto were drivers of growth in their respective categories.

Paul Bulcke, CEO (pictured), said, "Our first-half performance shows the relevance of our strategic roadmap in today’s new reality and demonstrates our swift and disciplined execution behind it, making the right choices at the right time."

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Last week it was announced that Paul Grimwood, CEO for the company's UK and Ireland business, will head up the US business from October. Chief executive of the UK and Ireland segment for three years, Grimwood's move is seen by some as an attempt to shake-up Nestlé's slowing US business. (9 Aug)

                                                                     

© 2012 - ESM: European Supermarket Magazine

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