Nestle sales rise 6.1%

Nestle profits are up

Swiss food and drink giant Nestlé has reported that its 6.1 percent growth in sales is down to its investment in marketing.

For the first half of the year, Nestlé has seen sales increase to 55.3 billion Swiss Francs (£33.2 billion), with sales of popular brands such as Nescafé coffee, Vittel water, Cheerios cereal and Kit Kat chocolate bars increasing 5.7 percent.

The increase in sales came as the company increased its marketing budget by 14 percent compared to the year before.

Increased investment

In a statement, Nestlé said, "Recent innovations across all categories, combined with increased investment in consumer-facing marketing, were key to strengthening the Group's market positions."

It appears to have worked. On the continent, sales increased by 2.2 percent to 10.7 billion Swiss Francs. Nestle's food and beverages margin on an earnings before interest and taxes level increased by 60 basis points to 13.0 percent in the first half. However, the company doesn't appear to be resting on its laurels, and has said that it aims to improve profitability even more over the full year. Furthermore, it hopes to see organic growth of around five percent.

Commenting on the figures, Paul Bulcke, chief executive of Nestle, said the group's "very successful" first-half performance is due to its global strategies "covering the full range from premium brands to value-priced offerings".

He added that "we have increased investment in our brands, people and capabilities and have prepared the company for a more challenging second half."

With Unilever also seeing strong profits, it will be interesting to see the results with increased competition and higher raw material costs.

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