Nestlé has turned its back on more big acquisitions, surprising investors yesterday with plans for a SFr25 billion ($20.5 billion) three-year share buyback.

The news came as the world's biggest food group shrugged off fears of higher commodity and raw materials prices to reveal what analysts described as "stellar" first-half results.

The earnings numbers and share buyback mark a triumph for Peter Brabeck, chairman and chief executive, before he hands over operational management next year to concentrate on strategy as chairman.

Under Mr Brabeck, Nestlé has outpaced sluggish rivals, such as Unilever, by focusing on profitability through pruning its portfolio, buying higher-margin businesses and improving IT.

The latest results, far above analysts' expectations, set a high hurdle for Mr Brabeck's successor.

That person, widely tipped to be Paul Polman, chief financial officer, may be named at a board meeting next month.

Nestlé's figures lifted its shares - which have a weighting of about 17 per cent in the main Swiss equity index - 9.5 per cent to SFr494.50. That rise represented a SFr17.1 billion increase in the group's market value to SFr198.2 billion.

Both growth, traditionally difficult in the cut-throat foods business, and margins exceeded internal and market targets, and Nestlé was confident it could maintain the pace for the year.