Nestle beats Q2 sales estimate, set to raise €3 billion from joint venture

Nestle on Thursday posted slightly better than expected second-quarter 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 per cent to 4 per cent, instead of its previous target of “around 3 per cent”. Nestle and Platinum Equity would each own 50 per cent of the joint venture, which will be named Peranel, the company said.  

The company has been reshaping its portfolio under Chief Executive Officer Philipp Navratil, who has sought to improve growth and profitability by focusing on the company's core brands.  

 

Nestle 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.  Second-quarter organic sales, which exclude the impact of currency movement and acquisitions, rose 3.7 per cent in the second quarter ended June 30, the maker of KitKat candy bars and Nescafe coffee said. Analysts had on average expected organic sales growth of 3.6 per cent.