Vevey (dpa -AfX) – The world’s largest food group Nestle (Nestlé) continued to grow in the first half of the year – but high costs are pressing a little on profitability. The business in China also weakened. The food giant holds on the margin goals for the year as a whole. The turnover for the period from January to June was CHF 44.2 billion – that is around 1.8 percent less than in the same period last year. The reason for this is primarily negative currency effects because of the strong Swiss franc.
Organic growth – i.e. adjusted to currency and portfolio effects – accelerated by a trail to 2.9 percent compared to 2.8 percent in the first quarter. This growth comes almost exclusively from price increases, such as Nespresso and Kitkat. In contrast, quantity growth (rig) fell from 0.7 percent in the first quarter to 0.2 percent. The weak demand in the USA had a negative effect. In North America, Nestle’s most important market with a 35 percent share of sales, the tariffs and uncertainties pressed consumption.
The operational profit decreased by around seven percent to CHF 7.29 billion. The corresponding margin fell to 16.5 out of 17.4 percent. High raw material prices for coffee and cocoa, increased marketing editions and unfavorable currency effects press the margins. The net profit also collapsed by ten percent to CHF 5.07 billion.
The Swiss company sticks to its goals for the year as a whole. With the numbers, the food producer partially meets the expectations of the analysts. In organic growth, he filled it, but not with the amount sold. At the operational margin, Nestle exceeded expectations
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