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Nestlé Posts Half-Year Organic Growth Of 3.6%

Food giant Nestlé said strong demand for its products in the United States and Brazil helped the KitKat chocolate bar maker post its fastest sales growth in three years during the second quarter.

Organic sales, which strip out currency swings and acquisitions and disposals, accelerated to 3.9% in the three months to the end of June, the highest rate since the first quarter of 2016.

“Our growth was broad-based with our largest market, the United States, performing particularly well,” Chief Executive Mark Schneider said in a statement.

Organic Growth

For the half-year, Nestlé matched analyst expectations for 3.6% growth, an improvement over 2.8% in the year-ago period.

Net profit at the world's largest packaged food company fell 14.6% to 5.0 billion Swiss francs (€4.5 billion), as the year-ago period benefited from a $2.8 billion one-off gain linked to selling it US confectionery business to Ferrero.

Nestlé's trading operating profit margin improved by a better-than-expected 17.1% as the company pressed ahead with its premiumisation strategy.

Its profit margin has improved as it exited low margin businesses like US confectionary and rolled out higher price brands like rose chocolate KitKat and flavoured San Pellegrino water.

For the year overall, Nestlé confirmed its guidance, saying it expects organic sales growth around 3.5% and a margin on underlying trading operating profit at or above 17.5%.

News by Reuters, edited by Checkout. Click subscribe to sign up for the Checkout print edition.

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