First Half 2014: 4.7% organic growth in a volatile trading environment, CHF 8 billion share buy-back programme

Aug 7, 2014



- Sales of CHF 43 billion, 4.7% organic growth, 2.9% real internal growth
- Strong Swiss Franc impacts sales by -8.8%
- Trading operating profit 15.0% (-10 basis points); +30 basis points in constant currencies
- Underlying earnings per share up 3.6% in constant currencies
- CHF 8 billion share buy-back announced
- 2014 outlook confirmed: organic growth around 5% and improvements in margins, underlying earnings per share in constant currencies and capital efficiency


Paul Bulcke, Nestlé CEO: "We delivered solid, broad-based organic growth, driven by real internal growth and pricing in what is still a very volatile trading environment. We continued to drive the growth momentum with innovation, increased support behind our brands, and a focus on efficiencies. The creation of Nestlé Skin Health with the Galderma business expanded our nutrition, health and wellness strategy, reinforcing our long-term strategic ambition to improve people’s lives through science-driven innovation. We plan to buy back CHF 8 billion shares in a programme that will start this year and continue into 2015, providing additional competitive returns for our shareholders. The performance in the first half allows us to confirm our outlook for the full year: organic growth around 5% and improvements in margins, underlying earnings per share in constant currencies and capital efficiency."


First Half 2014 Group Results


In the first half the Group delivered organic growth of 4.7%, composed of 2.9% real internal growth and 1.8% pricing. Total sales were CHF 43 billion. The strong Swiss Franc continued to have a substantial negative impact (-8.8%) and after divestitures, net of acquisitions (-0.7%), reported total sales were down by 4.8%.
 The Group’s trading operating profit was CHF 6.4 billion. The reported trading operating profit margin was 15.0% (-10 basis points), +30 basis points in constant currencies.
The cost of goods sold increased by 20 basis points, reflecting input cost pressures, especially in dairy.
Total marketing and administrative costs decreased by 30 basis points, reflecting efficiencies. At the same time we continued to strengthen the support for our brands, increasing consumer facing marketing spend in constant currencies.
Net profit was down to CHF 4.6 billion, reported earnings per share were CHF 1.45, both impacted by the strong Swiss Franc. Underlying earnings per share in constant currencies were up 3.6%.
Operating cash flow was CHF 4.3 billion. Working capital remains an area of focus and we have continued to lower it as a percentage of sales.


PDF press releases: First Half 2014 (English)