Nestlé growth boosted by pet sales

Nestlé has reported that organic growth reached 2.8% in its half-year results, with real internal growth of 2.6% and pricing of 0.2%. This was largely supported by sustained momentum in Purina PetCare and Nestlé Health Science. By product category, the largest growth contributor overall was Purina PetCare, led by its premium brands Purina Pro Plan and Purina ONE. Total reported sales decreased by 9.5% to 41.2bn francs (£34.7bn), however, though its trading operating profit margin increased by 140 basis points to 16.9%. Looking ahead, the group expects full-year organic sales growth of between 2% and 3%. The underlying trading operating profit margin is also expected to improve, while underlying earnings per share are expected to increase. However, in the first half of the year, Covid-19 related costs were 290m francs (£244m), including expenses for bonuses paid to frontline workers, employee safety protocols, donations and other staff and customer allowances. In addition, the group absorbed costs of 120m francs (£101m) related to staff and facilities that were “made idle” due to lockdown measures. Overall, the group said the exact financial impact of Covid-19 for the full year “remains difficult to quantify”. Mark Schneider, Nestlé CEO, commented:"COVID-19 continues to impact people around the world. We stand with all those affected and are committed to helping where we can. I would like to thank every member of the Nestlé team for their dedication and hard work in the face of incredible challenges. “Our priorities remain the same; keeping our people safe, assuring continued supply of essential food and beverages to consumers and caring for our communities and business partners through financial and in-kind support.” He added: “Nestlé has remained resilient in a rapidly changing environment, delivering solid organic growth and improved margins in the first half. These results demonstrate the agility of our business and the strength of our diversified portfolio across geographies, product categories and channels. “With consumer behavior evolving faster than ever, we are adapting to this new reality by strengthening our innovation, leveraging our digital capabilities and executing with speed. Our engaged teams and their commitment to deliver business results while driving progress against our societal and environmental commitments make us a stronger company every day."