Nestle sales resist recession

Nestle has seen demand for its core products hold up

ZURICH, Switzerland -- Nestle, the world's largest food maker, saw sales rise 10.1 percent in the first quarter, slightly below forecasts, as the firm predicts an improved performance for the rest of the year.

Nestle on Thursday said revenue increased to 21.3 billion Swiss francs ($13 billion) from 19.4 billion francs a year earlier. Analysts polled by Reuters had expected sales to grow by bigger margin of 11 percent.

Nestle said its core products -- including Nescafe instant coffee, Perrier and Vittel bottled water, KitKat chocolate and Friskies cat food -- were largely recession resistant and an improving global economy would only increase sales growth in 2002.

The rate of real internal growth (RIG) -- minus the effects of price changes, currency movements and acquisitions -- was 3.3 percent in the first quarter, also below analysts' forecasts of 4 percent.

By region, Nestle reported RIG of 1.8 percent in Europe and 2.1 percent in the Americas.

Acquisitions accounted for 7.9 percent of first quarter growth, which for the first time included sales by U.S. food group Ralston Purina, bought for $10.3 billion last year.

"We are confident that we will again reach our RIG of 4 percent and that Nestle will once more improve sales and profits for 2002," chief executive Peter Brabeck said in a statement.

"Unless there are major economic or monetary downturns, the Nestle Group should again be able to report record sales and profits at the end of 2002."