Nestlé has posted an 11.4% rise in first-half net profit to CHF4.15bn (US$3.39bn), in line with analysts’ forecasts, boosted by hedging measures and price increases which offset higher commodity and energy costs.

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The Swiss-based food giant said first-half earnings before interest and tax (EBIT) margin increased by 40 basis points to 12.8%, ahead of analysts’ forecasts.


On the back of the solid first half, Nestlé has effectively upgraded its forecast for the full year, saying it expects full-year organic growth at the higher end of its previously stated 5% to 6% target range. “Our costs for the full year of 2006 are already fixed and there should be no surprises,” said CEO Peter Brabeck.


Turnover increased by 11% to CHF47.14bn, reflecting organic sales growth of 6.4%, on the back of a strong performance from food and beverages and its nutrition businesses.


Within its Milk Products, Nutrition and Ice Cream, the company said that Shelf-stable dairy showed 4.5% internal and 7.4% organic growth, performing well in its key regions, the Americas and Asia Oceania and Africa. Ice Cream sales were slow in Europe ahead of its peak season, but performed well in July. In North America, the growth was good and was combined with an improved profit performance at Dreyer’s, the company said.

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Nestlé Nutrition saw real internal growth of 1% and organic growth of 5%, on the back of new product launches and an improved product mix. Nestlé said it expects this growth to accelerate, driven by the global roll-out of a new infant formula and continued growth in China. Excluding China, real internal growth reached 3.9% and organic growth 8.1%, the company said. The business improved its margin by 60 basis points, on the back of a more favorable product mix and efficiency programmes.


Nestlé’s Prepared Dishes and Cooking Aids division recorded real internal growth of 4.4% and organic growth of 5.4%, with frozen food continuing to perform very well. In North America, Stouffer’s, Lean Cuisine and Hot Pockets frozen products all sold well, as did Wagner Pizza in Europe. Culinary products produced good growth in emerging markets, the company added.


Chocolate, Confectionery and Biscuits showed 1.9% real internal growth and 3.5% organic growth. However, the EBIT margin for this segment declined by 50 basis points, mainly as a result of UK product streamlining and increased brand support in certain markets.