Nestle raises full-year outlook

THE world’s biggest food group Nestle raised its full-year forecasts yesterday, after strong demand for its Maggi and Nescafe brands in emerging markets helped it post a forecast-beating 7.5 per cent rise in underlying first-half sales.

Sales grew in all regions, even in crisis-shaken Europe and North America, and the group managed to keep margins and net profits largely stable for its continuing operations despite soaring raw material costs and a record-high Swiss franc.

The Swiss maker of KitKat chocolate bars and Nespresso portioned coffee said it expected full-year underlying sales growth at the top end of its long-term target range of five to six per cent, along with higher margins in constant currencies.

“Our guidance is cautious due to the environment we’re operating in,” Nestle chief financial officer James Singh said, adding the group’s input costs would rise about CHF 3bn (£2.5bn) this year.

Chief executive Paul Bulcke said Nestle made good progress in a period characterised by political and economic instability, natural disasters, rising raw material prices and a strong Swiss franc after the 7.5 per cent half-year underlying sales rise beat forecasts of a 6.5 per cent increase.

Nestle has recently raised prices, as has rival Kraft.