Nestle ups outlook as business booms in emerging markets

SWISS food giant Nestle raised its full-year outlook yesterday after buoyant demand for its strong brands in emerging markets boosted sales in the first half.

The world’s biggest food group said its food and beverages business should show underlying sales growth of around five per cent.

So far the group – whose brands include Nescafe coffee, Kitkat chocolate bars, Perrier water and Buitoni sauces – had only said growth should beat last year’s 3.9 per cent.

Net profit rose to SwFr5.5bn (£3.3bn)?from SwFr5.1bn in the year-earlier period, as sales grew 5.9 per cent to SwFr55.34bn. Underlying or organic growth -- which strips out currency effects and acquisitions -- at Nestle’s food and beverages unit stood at 5.7 per cent. “We have increased investment in our brands, people and capabilities and have prepared the company for a more challenging second half,” chief executive Paul Bulcke said in a statement.

Jon Cox, an analyst at Kepler Capital Markets, said: “This is an excellent set of figures and a clear raise in guidance despite talk of reconfirmation.”

Anglo-Dutch rival Unilever warned last week the second half would be tougher due to increased competition and higher raw material costs.