Nestle, the world's biggest food group, reported a slowdown in core sales growth in the first quarter as a strong Swiss franc weighed, but reiterated its full year target despite the global slowdown.
Nestle said it still expects 2009 organic sales growth of 'at least approaching 5%' compared to its long-term target of 5-6%. Organic sales growth, which strips out currency effects and acquisitions, was 3.8% in the first quarter, the company said.
Total sales slipped 2.1% to 25.2 billion Swiss francs ($21.5 billion) from 25.7 billion a year ago as the strong Swiss currency had a negative impact of 5.2%.
Nestle's CEO Paul Bulcke said the 3.8% underlying growth figure was an achievement given tough comparisons with the near 10% rise in the year-ago quarter.
All business units recorded positive organic growth in the first quarter apart from the bottled water division, where sales fell 2.5%, which Nestle said was due to ongoing weakness in the industry, particularly in western Europe.
Nestle Nutrition recorded flat organic growth due to weak growth in the European baby formula business and for the US Jenny Craig diet food range. Nestle also said ice cream sales were hit as consumers cut back on eating out.
Analysts said the maker of Nescafe coffee and KitKat chocolate bars was well positioned to ride out the recession compared to its rivals due to its range of products and wide geographical presence.
French food group Danone stuck to its 2009 earnings growth targets earlier this month after demand for its baby food and medical nutrition products helped lift first-quarter like-for-like sales by 1%.
