First half 2011: solid performance in a volatile environment

• Sales of CHF 41.0 billion, 7.5% organic growth, 4.8% real internal growth 
• Trading operating profit of CHF 6.2 billion, margin of 15.1%; +20 basis points, +40 basis points in constant currencies
• Consumer facing marketing spend up 6.2% in constant currencies
• Underlying earnings per share up 5.2% in constant currencies
• Strong Swiss franc: major impact on consolidation, little effect on operational performance
• Full-year outlook: organic growth at top end of 5% to 6% range, combined with a margin increase in constant currencies

Paul Bulcke, Nestlé CEO: “Nestlé continued to make good progress in a period characterised by political and economic instability, natural disasters, rising raw material prices and, yes, a strong Swiss franc. This has made for an extremely tough, volatile and competitive environment. But by leveraging our competitive advantages, investing behind our growth drivers and excelling in operational efficiency and effectiveness, we managed to drive growth not only in emerging markets but also in developed countries, especially in Europe. Furthermore we improved our trading operating margin while increasing investment in our brands. For the full year, we expect organic growth at the top end of the 5% to 6% range, combined with a margin increase in constant currencies.”

Vevey, 10 August 2011 – The Group reported organic growth of 7.5% and a trading operating profit margin of 15.1%, up 20 basis points reported, up 40 basis points in constant currencies, from that achieved by the continuing operations in the first half of 2010.

We continued to deliver growth both in emerging and developed markets, with organic growth of 5.7% in the Americas, 5.8% in Europe and 13.3% in Asia, Oceania and Africa. This performance reflects strong alignment and investment in our strategic growth priorities and brands to support our fast-flowing innovation pipeline. We also continued to step up our investment in R&D, factories and capabilities to support our growth in both emerging and developed markets.
 
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