Nestlé, the world's largest food company, reported a sales increase of 9.2% to CHF 107.6bn (€66.4billion) and earning before interest and taxes (EBIT) of CHF 15bn (€9.2 billion) (+12.9%). Net profit grew by 15.8% to CHF 10.6 billion (€6.6 billion), resulting in a net margin of 9.9% despite a difficult external environment.

Peter Brabeck-Letmathe, chairman and CEO of Nestlé said," Nestlé has ventured far beyond the traditional food industry: our success is now driven more by our capacity to innovate and use our R&D pipeline to launch new, added-value products and services, than by raw material prices or the economic climate."

Nestlé is confident that the momentum built up will be maintained over the coming years. Operational efficiency and capital discipline will remain high on the agenda while four key strategic areas have been identified as having above-average growth and profit potential in 2008 and beyond.

Nestlé Nutrition:  The integration of Novartis Medical Nutrition and Gerber was achieved in record time and the two businesses' performance is already exceeding expectations. Nestlé's strong R&D pipeline will continue to drive its growth and fuel the performance of mainstream products.

Popularly Positioned Products (PPPs): Products aimed at lower income consumers in the developing world will continue to grow strongly in 2008 and beyond. Nestlé PPPs, which mostly consist of dairy products, Nescafé and Maggi culinary products, grew by over 25% to reach around CHF 6 billion (€3.7 billion) in sales in 2007. The overall market for such products in Asia, Africa and Latin America is estimated at over CHF 80 billion (49.6 billion).

Out-of-home: With the on-going transformation of Nestlé's FoodServices Strategic Business Division into Nestlé Professional, the company is well poised to take advantage of a business opportunity over coming years estimated at around CHF 400 billion (€248 billion) in total.

Luxury and premium products: With growth of well over 40% in 2007, Nespresso is set to reach the CHF 2 billion (€1.2 bilion) sales mark in 2008. Mövenpick of Switzerland, which was relaunched as a pan-European super-premium ice cream brand in 2007, should continue growing fast in 2008, as should Häagen-Dazs in North America and Antica Gelateria del Corso in Europe. In confectionery, the strong growth of darker, premium chocolate is another visible sign of "premiumisation" and explains Nestlé's partnership with Belgian luxury chocolatier Pierre Marcolini, as well as the acquisition of Ruzskaya Confectionery Factory (RCF), producer of Russia's leading premium chocolate brands Comilfo and Ruzanna. The "premiumisation" of mainstream Nestlé products, as witnessed for instance by the recent launch of Nido Excella Gold in Asia and Latin America, will pick up further speed over years to come.