The Swiss-based food giant Nestle on August 15 reported an 18.7 percent increase in half year net profits to 4.92 billion Swiss francs (3.0 billion euros, 4.08 billion dollars) prompting it to raise its growth target for the full year.
Nestle said in a statement that sales had increased by 8.4 percent in the firts six months of the year to 51.11 billion Swiss francs. Operating earnings before interest and tax (EBIT) grew by 14.2 percent to 6.92 billion Swiss francs, it added.
Organic growth - a measure of business performance that excludes financial investments or acquisitions - reached 7.4 percent, above Nestle's target of about five to six percent for the year.
"The Group again achieved both strong growth and improved margins, the hallmark of the Nestle model," said chief executive Peter Brabeck. "In spite of increasing input cost pressures, I am confident of Nestlé achieving above-target organic growth for 2007, as well as a sustainable margin improvement," he added.
Nestle is expecting continued increases in the price of raw materials, especially milk. Growth in the group's core food and soft drinks business was strongest in Asia and Africa (9.7 percent), followed by North and South America (7.4 percent) which traditionally account for the largest single slice of Nestle's business.
Organic growth in Europe, especially the west, continued to lag behind, with an increase of 1.4 percent to 13.6 billion Swiss francs. Nestle's board has agreed to a new 25 billion Swiss franc share buyback scheme over three years, the company said.