In the first half the Group delivered organic growth of 4.7%, composed of 2.9% real internal growth and 1.8% pricing. Total sales were CHF 43 billion. The strong Swiss Franc continued to have a substantial negative impact (-8.8%) and after divestitures, net of acquisitions (-0.7%), reported total sales were down by 4.8%.
The Groups trading operating profit was CHF 6.4 billion. The reported trading operating profit margin was 15.0% (-10 basis points), +30 basis points in constant currencies.

The cost of goods sold increased by 20 basis points, reflecting input cost pressures, especially in dairy.

Total marketing and administrative costs decreased by 30 basis points, reflecting efficiencies. At the same time we continued to strengthen the support for our brands, increasing consumer facing marketing spend in constant currencies.

Net profit was down to CHF 4.6 billion, reported earnings per share were CHF 1.45, both impacted by the strong Swiss Franc. Underlying earnings per share in constant currencies were up 3.6%.

Operating cash flow was CHF 4.3 billion. Working capital remains an area of focus and we have continued to lower it as a percentage of sales.

Business review
The organic growth of the Nestl Group was broad-based; 4.9% in the Americas, 1.4% in Europe, and 7.5% in Asia, Oceania and Africa. Globally, our businesses in developed markets grew 0.6%, whilst emerging markets grew 9.7%.

The real internal growth was 2.4% in the Americas, 2.3% in Europe and 4.2% in Asia, Oceania and Africa.

The newly established Nestl Skin Health, based on our Galderma business, reinforces our long-term strategic ambition to be the leading nutrition, health and wellness company. This investment complements other value-added growth platforms in our portfolio including Nestl Health Science, created three years ago to drive innovation in the area of personalised nutrition. Nestl Skin Health has been further strengthened with the acquisition of the full rights to commercialise several key aesthetic dermatology products in the US and Canada.

Zone Asia, Oceania and Africa
Sales of CHF 8.9 billion, 4.7% organic growth, 1.9% real internal growth; 18.9% trading operating profit margin, -20 basis points

The Zone delivered growth in both developed and emerging markets. Good performances in parts of the Zone were counterbalanced by the effects of deflation and of unrest elsewhere. Real internal growth was impacted by increased pricing taken to compensate for the weakness of some currencies.

The premium businesses continued to be a growth driver for the Zone. The continuing rollout of Nescaf Dolce Gusto delivered double-digit growth. Innovation also contributed with new launches including Yinlu Walnut Milk in China and new portioned packs of Milo in Australia. There was solid growth for Milo in cocoa and malt beverages, Maggi in ambient culinary and for creamers.

In the emerging markets the Philippines, Turkey, Pakistan and many markets in Africa all grew strongly. China was challenged but we see fundamentals improving. South Asia recovered, its growth reinforced with innovations like Nestl Masala Buttermilk and Nestl Sweet Lassi beverages launched in India. Nesquik Optifast had a good start in Turkey and the Middle East.

The developed markets in the Zone delivered positive growth with Japan having a strong start to the year. There were successful rollouts of low fat Carnation Cooking Cream and Felix cat food in Oceania.

The trading operating profit margin was impacted by increasing costs, mainly dairy, which were not fully offset by pricing and efficiencies.