Nestle (NESN.SW), the world’s largest food manufacturer, confirmed its full-year guidance as strong growth in the US, the group’s largest market, and Brazil lifted total revenue in the first half, setting the stage for a double-digit expansion in underlying earnings.
Reported sales rose by 3.5% to 45.46 billion Swiss francs ($45.79 billion) during the six months that ended June 30, from 43.92 Swiss francs a year ago, with Purina PetCare and infant nutrition among the biggest contributors, the company said in its earnings statement.
Foreign-exchange headwinds, however, more than offset the beneficial impact of acquisitions on group turnover.
“Increased investment behind our brands is clearly paying off, as reflected in strong momentum in PetCare and the return to mid-single-digit growth in coffee,” Chief Executive Officer Mark Schneider said in the statement.
Underlying earnings per share soared by 15.7% at constant currency to 2.13 billion Swiss francs, with the surge mainly being a result of “improved” operating performance and lower taxes. Nestle said its share buyback program contributed 1.9% to the underlying earnings per share increase, net of finance costs.
During the first half, the firm repurchased 4.2 billion Swiss francs of shares, implying 73% of the 20 billion Swiss franc share buyback program announced in 2017 has been implemented. The group intends to complete the remaining program by the end of December.
In May, Vaud, Switzerland-based Nestle announced the transition of its US pizza and ice cream businesses from a direct-store-delivery network to a warehouse distribution model. It said the transition would begin in the second half and is expected to be completed in the second quarter of 2020.
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