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Last updated: October 17. 2013 5:36AM - 304 Views
Associated Press



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(AP) Swiss food and drink giant Nestle SA posted a modest 4 percent increase Thursday in sales of dozens of its household name brand products for the first nine months of 2013.


The Vevey, Switzerland-based company, whose business reflects the global economy, said it had sales of 68.4 billion Swiss francs ($74.5 billion) through September, up from a restated 65.7 billion Swiss francs during the same period in 2012.


The world's biggest food and drink company had previously reported its nine-month sales in 2012 as 67.6 billion Swiss francs through September, up from 60.9 billion during the same period in 2011.


"Our real internal growth has regained momentum and is broad-based across categories, price points and geographies. Most notably, Europe continues to grow and Asia and Africa have picked up speed," Nestle Chief Executive Paul Bulcke said.


The news sent shares in Nestle up by more than 2 percent to 63.30 francs in Thursday morning trading.


But the maker of Nescafe, Jenny Craig and Haagen-Dazs, which last year at this time reported that its sales growth had slowed to 11 percent in the first nine months of 2012, acknowledged some headwinds in a statement issued before the opening of the Zurich exchange.


"Today's challenging environment is the right time for us to further reinforce the fundamentals of our business: those which drive growth like innovation, distribution and consumer engagement, and those which drive operational performance like strengthening our portfolio, improving our resource allocation and increasing our structural efficiency," Bulcke said.


"We expect our continued growth momentum to enable us to deliver around 5 percent organic growth for the full year," he added, "together with an improvement in margins and underlying earnings per share in constant currencies."


Earlier this year, Nestle had cautioned that it might not be able to meet its usual target of between 5 to 6 percent annual organic growth, a measure that removes the costs from recent acquisitions and fluctuations in currency.


In its biggest market, North America, Nestle said sales continued to grow particularly for frozen meals, pizza and snacks, despite the tough economic environment. It said cereals, Kit Kat bars, Nescafe and pet care were doing well in Latin America, despite the economic slowdown from inflationary pressures.


Europe's weak consumer demand and deflationary pressures were affecting sales, and poor summer weather resulted in a short season for ice cream, Nestle said, though Britain, Austria, Germany and Switzerland were holding up better than other areas.


There was a continuing general economic slowdown across emerging markets in Africa, Oceania and the Middle East, where local conflicts and civil disturbances disrupted several markets though Central and West Africa, and Indonesia saw strong sales growth, Nestle said.


China's sales also continued to grow, the company said, but in a somewhat slower trading environment.


Associated Press
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