Nestle 9-month sales up 4.1 percent

[October 22, 2010]  GENEVA (AP) -- Nestle, the world's biggest food and drink company, said Friday that sales over the first nine months of the year increased 4.1 percent to 82.8 billion Swiss francs ($85.6 billion) as stronger demand was dampened by the drop in the dollar, which hurt its international sales.

The maker of Kit Kat, Nestle and Perrier and Haagen-Dazs posted sales of 79.6 billion francs for the same period last year. The company only reports half and full-year earnings.

Nestle shares dipped 0.5 percent to 52.80 ($54.26) as analysts expressed mild disappointment about the results. Zuercher Kantonalbank noted that the currency effects were stronger than anticipated.

Nestle saw sales grow in all regions and categories, with food and beverage sales reaching 77 billion francs. However, adverse currency conditions -- mainly related to the dollar's weakness -- reduced revenue by 2.7 percent.

"The first half's growth momentum continued unabated in the third quarter, providing a good base for the full year as we face challenging comparatives in the final quarter," Chief Executive Paul Bulcke said.

Nestle has been realigning its portfolio over the past quarter, selling its remaining stake in eye care company Alcon to pharmaceutical giant Novartis and opening a new health science division aimed at developing medicinal food products.

Still, the company's main focus remains its so-called 'billionaire brands.' During the quarter it opened its 200th Nespresso shop -- in Shanghai, China -- and launched the premium Dolce Gusto coffee range in North America, including in 2,000 Wal-Mart stores. Nestle also rolled out its dietary ready meal range Jenny Craig across Europe.

In its core food and drinks business the strongest growth occured in developing countries. The Asia, Africa and Oceania zone reported 9.2 percent organic growth with sales reaching 12.9 billion francs, whereas Europe saw sales increase by only 2 percent to 15.9 billion francs. Zone Americas, which includes rapidly developing economies such as Brazil, experienced organic growth of 5.7 percent with sales reaching 25.0 billion francs.

[Associated Press; By FRANK JORDANS]

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