Nestlé Reports Good Results for First Half of 2016
Nestlé, the Swiss food and beverage giant, has recently seen a growth in sales during the first half of 2016. According to the report, they recorded a total sales of CHF 43.2 billion with 3.5% organic growth. The real internal growth is set at 2.8%.
Nestlé’s Coffee-mate maintains its growth in North America due to its new packaging and flavor extensions, reports Global Coffee Report. Meanwhile, Nescafé soluble coffee, ambient dairy and Nescafé Dolce Gusto are still remains Nestlé’s growth drivers in Mexico and Brazil.
Nespresso saw a great performance in Europe, the Americas, Asia, Oceania and Sub-Saharan Africa. Positive results were also noticed in North America with the success of the Vertuoline system and an increased marketing investment.
Furthermore, a worldwide growth has been supported by Nestlé’s ongoing geographic expansion that saw the opening of 16 new boutiques and its Grands Crus coffees limited edition.
Nestlé’s CEO, Paul Bulcke in a statement said “The first half of 2016 was in line with our expectation with growth almost entirely driven by volume and product mix, yielding further market share gains.”
He also talked of Nestlé’s continuous fight in addressing the challenges in China and the good performances they have had in USA, Europe, Latin America and South East Asia. He said they “expect this to continue in the second half” as they “expect pricing, which reached historically low levels in the first half, to recover somewhat in the coming months.”
According to the Paul Bulcke, Nestle’s growth in gross margin and operating profit is due to “further premiumisation, continuous cost discipline and input cost tailwinds,” which has significantly improved its free cash flow to CHF 3.3 billion, up 41%.
According to the report, trading operating profit was CHF 6.6 billion, with a margin of 15.3%. Net profit was CHF 4.1 billion with a reduction of CHF 0.4 billion compared to last year “due to a one-off, non-cash adjustment to deferred taxes,” as explained on their website.
“In these times of rapid change, we keep our focus on profitable growth by further investing in innovation, R&D, brand support and digital to engage with our consumers, meeting their changing needs. Overall our first half performance allows us to reconfirm our outlook for the full year,” he continued.
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