• Nestle Waters sales climb by 8.6% to CHF3.37bn (US$4.64bn)
  • First-half net profits slide by 22.7% to CHF4.87bn
  • Operating profits drop by 23.5% to CHF6.21bn
  • Sales decline by 12.9% to CHF41bn
Rising input costs hit Nestles H1 profits

Rising input costs hit Nestle's H1 profits

Nestle Waters has seen its sales climb in the first half of the year, boosted by a positive performance in Europe.

Sales in the six months to the end of June, climbed by 8.6% to CHF3.37bn (US$4.64bn), the firm revealed today (10 August). Nestle attributed the increase to good performances across its North America, Asia, Africa and Oceana zones, but in particular Europe. International brands, S. Pellegrino, Vittel, Acqua Panna, Contrex and Perrier, all performed well, the company added.

Nestle however, reported an operating margin of 8.6%, down 140 basis points from last year. The company blamed the drop on a sharp increase in oil-related costs, increased prices, light-weighting of bottles and continuous increases in distribution efficiencies.

Group profits also fell in the first half, by 22.7% to CHF41bn, while operating profits dropped by 23.5% to CHF6.21bn.

Sales in the six months amounted to CHF41bn, a 12.9% decline on last year.

Nonetheless, Nestlé CEO, Paul Bulcke said the company continued to make “good progress in a period characterised by political and economic instability, natural disasters, rising raw material prices and, yes, a strong Swiss franc”. 

“This has made for an extremely tough, volatile and competitive environment,” he added.

Looking to the second half of the year, Nestle said it expects “continued challenging conditions including political and economic instability, volatile raw material prices and subdued consumer confidence in the developed world”. 

However, the company said it is confident of achieving organic growth at the top end of the 5% to 6% range, combined with a margin increase in constant currencies.

Click here to view the earnings release.