Nestle announces $8.8-bn share buyback

Written by Reuters | Zurich | Updated: Aug 8 2014, 08:02am hrs
Nestle announced an 8-billion-Swiss franc ($8.8-billion) share buyback and stood by its full-year sales forecast on Thursday, after revenue growth in emerging markets picked up in the second quarter. The company said it wanted to complete the buyback by the end of 2015.

Its comments came after Anglo-Dutch rival Unilever blamed a slowdown in Asia for second-quarter sales missing forecasts last month, and profits at Frances Danone were hit by weak dairy sales in Europe.

Food groups are facing tough conditions as prices in developed markets remain under pressure and demand in emerging markets has also been slowing, but Nestle has been able to soften the blow by pouring marketing funds into its leading brands and by getting rid of underperformers.

Net profit at Nestle fell about 10% to 4.6 billion francs in the six months to June, short of analysts average estimate of 5.01 billion francs in a Reuters poll.

Sales growth adjusted for currency swings and acquisitions accelerated to 4.7% in H1, from 4.1% a year earlier and 4.2% in Q1, as volumes and pricing both picked up.