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Nestle posts first-half organic growth of 3.6%

FILE PHOTO: The Nestle logo is seen during the opening of the 151st Annual General Meeting of Nestle in Lausanne

ZURICH (Reuters) - Food giant Nestle said strong demand for its products in the United States and Brazil helped the KitKat chocolate bar maker post its fastest sales growth in three years during the second quarter.

Organic sales, which strip out currency swings and acquisitions and disposals, accelerated to 3.9% in the three months to the end of June, the highest rate since the first quarter of 2016.

"Our growth was broad-based with our largest market, the United States, performing particularly well," Chief Executive Mark Schneider said in a statement.

For the half year, Nestle matched analyst expectations for 3.6% growth, an improvement over 2.8% in the year-ago period.

Net profit at the world's largest packaged food company fell 14.6% to 5.0 billion Swiss francs ($5.05 billion), as the year-ago period benefited from a $2.8 billion one-off gain linked to selling it U.S. confectionery business to Ferrero.

Nestle's trading operating profit margin improved by a better-than-expected 17.1% as the company pressed ahead with its premiumisation strategy.

Its profit margin has improved as it exited low margin businesses like U.S. confectionary and rolled out higher price brands like rose chocolate KitKat and flavoured San Pellegrino water.

For the year overall, Nestle confirmed its guidance, saying it expects organic sales growth around 3.5% and a margin on underlying trading operating profit at or above 17.5%.


($1 = 0.9908 Swiss francs)


(Reporting by John Revill; editing by Brenna Hughes Neghaiwi)