LONDON — Nestlé on Thursday posted slightly better-than-expected second-quarter (Q2) organic sales growth and said it expects to raise around 3 billion euros ($3.43 billion) from a joint venture with investment firm Platinum Equity for its waters and premium beverages business.
The world’s biggest packaged food company also said it now expects full-year organic sales to grow 3 percent to 4 percent, instead of its previous target of “around 3 percent.”
Nestlé and Platinum Equity would each own 50 percent of the joint venture, which will be named Peranel, the company said. Its portfolio will have more than 30 brands sold in 120 countries, including S.Pellegrino, Source Perrier and Acqua Panna as well the global Nestlé Pure Life brand and other major local water brands.
The company has been reshaping its portfolio under CEO Philipp Navratil, who has sought to improve growth and profitability by focusing on the company’s core brands. Reuters reported in May last year that Nestlé had hired Rothschild to explore a partnership or sale of a stake in its European water business while retaining part ownership.
Nestlé said its second-half underlying trading operating profit margin would be higher than the first half of the year on the back of lower coffee and cocoa costs. It said, however, that it had also seen “some higher transportation and energy costs arising from the Middle East conflict.”
Second-quarter organic sales, which exclude the impact of currency movement and acquisitions, rose 3.7 percent in the second quarter ended June 30, the maker of Maggi stock cubes, KitKat candy bars and Nescafé coffee said. Analysts had on average expected organic sales growth of 3.6 percent.
Nestlé’s 1.9-percent price increases were ahead of the average analyst estimate of 1.8 percent. Real internal growth — or sales volume — expanded 1.8 percent, meeting expectations. REUTERS
