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Nestle first half profits grow

ZURICH, Aug 11 – Nestle, the world\’s biggest food and beverage group, on Wednesday posted a 7.5 percent increase in first-half net profit as it braced for a more challenging period in the coming months.

Net profit for the first six months of the year reached 5.5 billion Swiss francs (4.0 billion euros, 5.2 billion dollars), the group said in a statement.

Income grew strongest in the Asia, Oceania and Africa region, up 11.7 percent, followed by the Americas at 7.2 percent. Sales in Europe remained stagnant, however.

Overall sales totalled 55.3 billion francs, up 5.7 percent.

"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.

Nestle maintained its target of organic growth averaging 5.3 percent over the full year, below the accelerating growth rate of 6.3 percent achieved in the first half.

The group said it had taken advantage of a deeper distribution and the roll out of cheaper products in emerging nations, where it posted 10 percent growth in its business.

Sales in Asia, Oceania and Africa grew by 11.7 percent, followed by the Americas (7.2 percent).

Sales in Europe, Nestle\’s second biggest market after the Americas, continued to lag behind the rest of the world, with an increase of 2.5 percent.

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However, Nestle said sales of bottled water in developed nations had returned to growth after falling consumption over a couple of years under the pressure of environmental concerns in Europe and North America.

Bottled water sales in emerging nations continued to boom with near 20 percent organic growth.

Nestle\’s coffee capsule business, which is set to face growing competition, grew by 25 percent with sales of more than three billion Swiss francs.


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