The world's biggest food group, Switzerland's Nestlé, has surpassed analysts' expectations and revealed a 12 per cent, or SFr4.7 billion increase in net profits for 1999. Market forecasters had predicted an increase of just six per cent.

The world's biggest food group, Switzerland's Nestlé, has surpassed analysts' expectations and revealed a 12 per cent, or SFr4.7 billion increase in net profits for 1999. Market forecasters had predicted an increase of just six per cent.

Numbers at the canton Vaud based multinational were up across the board, with turnover increasing four per cent to SFr74.7 billion, and earnings per share up 13 per cent to SFr122.

Nestlé credited its better-than-expected performance to restructuring efforts which have streamlined its business portfolio and increased efficiency, while still allowing investment in new products and in marketing its brands.

Nestlé said the overall sales increase came despite "the unfavourable economic climate in South America and the poor performance of the Eastern European economies during the first half".

The company said the positive growth stemmed from a strong performance in North America, accelerating improvements in western Europe, and the manifest recovery in Asia.

Among the units which performed particularly well were the pharmaceuticals business Alcon, the bottled water business, joint ventures, nutrition and "out-of-home" businesses.

Analyst Paolo Mazzoni, of the Banca del Gottardo, said Nestlé should be able to use organic growth to boost turnover by an annual average of four per cent over the next five years.

From staff and wire reports

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