Nestlé set for another record performance

Nestlé is confident for 2001 as a whole swissinfo.ch

Nestlé, which is the largest food group in the world, has reported a 12.7 per cent rise in first-half net income, driven by a six per cent increase in sales. The company, based in Vevey on Lake Geneva, said it expected full year earnings and sales to be higher than the record performance of 2000.

Nestlé said its profit for the first half of the year expanded to SFr3.15 billion ($1.9 billion) on sales of SFr41.2 billion. The company’s operating profit, however, rose a more modest 0.4 per cent to SFr4.36 billion.

“All over the world, the group made good progress in its sales and that is evident if you look at our real internal growth, which stands at 4.6 per cent, above our target of four per cent,” Nestlé spokesman François-Xavier Perroud told swissinfo.

“That is a result of good performances in virtually all continents,” he added.

Water sales bubbling

Sales of bottled water and pharmaceutical products were particularly good, achieving real internal growth of eight per cent over the comparable period last year, the company said in a statement on Wednesday.

Perroud said that part of the reason for Nestlé’s continuing growth was that incomes around the world were increasing.

“Contrary to the perception of globalisation that we have in Western Europe in particular, it’s a fact that over the past 15 years a large number of people around the world have seen their incomes significantly increase,” he told swissinfo.

“That results in accrued interest in industrially-produced goods. We have been in many countries for a long time and our brands are familiar, and if people now have the available income, they will turn to these products,” he added.

Nestlé also announced that its SFr16.6 billion acquisition of United States pet food company Ralston Purina was “on track” to close before the end of the year.

“We are confident that by then we will have permission to go ahead with the deal. It’s a fast-growing business, it has a large potential and I am convinced that Ralston will give a significant growth push to Nestlé,” Perroud told swissinfo.

Nestlé also said it was carrying out a major programme, called GLOBE, aimed at increasing the group’s operational efficiency and performance worldwide.

The statement said GLOBE was likely to have average costs of SFr250 million per year until 2005 and would yield benefits reaching SFr3 billion by 2006.

swissinfo with agencies