Nestle Sales Rise 2.4%

NEW YORK - Aug 17/05 - SNS -- Nestle SA reported consolidated sales rose 2.4% to CHF 43,474 million during the first half of the 1005 fiscal year, despite the negative impacts of currencies of -1.8% and divestitures, net of acquisitions, of -1%.

Net profit (Profit for the period attributable to the Group) increased 32.4% to CHF 3.7 billion to give a net profit margin of 8.5% of sales, an increase of 190 basis points. Earnings per share grew 32.4% to CHF 9.48.

The 2005 net profit is not comparable to 2004 mainly due to the new accounting treatment of goodwill as from January 1, 2005 following the adoption of IFRS 3 (business combinations). The underlying earnings per share increased 11.2% to CHF 9.95.

The key growth driver was organic growth of 5.2%. This was within the Nestle long-term trend target of 5-6% and comprised 3.4% real internal growth (RIG) and 1.8% pricing.

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