Nestlé beat market expectations today to report a 12.7 per cent rise in first-half net profits to euro 1.25 billion.
The company also forecast record results for the year despite the global economic slowdown.
Strong sales growth in emerging markets and in water and pharmaceutical products helped drive turnover at the world's biggest food company up 6.3 per cent to euro 27.1 billion.
But Nestlé shares fell on profit-taking amid some analysts' concerns with a dip in the half-year operating margin. The shares were down 2.43 per cent in a weaker Swiss market this morning.
The shares have fallen around 4.5 per cent this year - and marginally underperformed the Dow Jones Stoxx food index.
The company said its operating margin of 10.5 per cent was lower than last year's 11.1 per cent, mainly due to the one-time impact of an accounting change and the cost of its GLOBE operational efficiency and performance programme.
GLOBE is expected to cost euro 165 million a year until 2005 and will yield benefits that will reach euro 3 billion by 2006, it said.
Marketing expenditure also rose as a result of investment in brands and the launch of new products, Nestlé said.