Nestlé Waters is looking to bolster its presence in the enhanced water category after a solid performance from its core business last year, its chairman and CEO said today (6 March).

The company, which produces bottled water brands including Vittel and Nestlé Aquarel, wants to expand into flavoured water and functional beverages this year, Carlo Donati said.

"To maintain profitable growth, we will now expand our presence in the sector of 'water +' and more added value healthy beverages," Donati said. "In this way, we will contribute of making Nestlé a major global player in nutrition, health and wellness."

Nestlé Waters, which accounts for almost 10% of Nestlé's annual sales, saw its operating profit leap by 17.5% in 2006 to CHF834m (US$682m). Sales reached CHF9.6bn, up over 9% on the year.

The company said it had managed to increase its share of the bottled water market in North America, where it leads the category. At the end of 2006, Nestlé Waters North America accounted for 38.5% of bottled water sales on the continent, up 1% on 2005.

However, Nestlé Waters admitted that its performance in Europe had been "uneven". A rise in exports of French water brands including Perrier and Vittel helped offset a sluggish domestic market. In Italy, the company strengthened its leadership of the market thanks to rising sales of Nestlé Vera.

The company said its businesses in the emerging markets of the Middle East, Africa, Latin America and Asia had enjoyed double-digit growth in 2006.

In Asia, Nestlé Waters said it is keeping "a close eye" on potential acquisitions, despite last week announcing the sale of its under-performing business in the Philippines.