Nestle Q1 sales rise 4.4 percent to $24.6 billion on strong growth in emerging economies

Nestle first-quarter sales rise 4.4 percent

GENEVA — Nestle AG posted a 4.4 percent increase in first-quarter sales on Thursday as the world’s largest food and drink maker made gains in emerging economies.

The Swiss-based company said sales totaled 26.3 billion Swiss francs (about $24.6 billion), which it described as a strong performance in a still-difficult economic environment.

The results beat analysts’ expectations, and Nestle shares rose 1.5 percent to close at 52.80 francs ($49.37) in Zurich.

“Our strong sales performance in the first quarter confirms we are capturing opportunities in our different growth pillars, both in emerging and developed markets,” said Paul Bulcke, the CEO of Nestle, which offers premium brands such as Nescafe, Perrier, Jenny Craig and Haagen Dazs.

Nestle is aiming for a third successive full-year turnover above 100 billion francs ($95 billion), offering new low-cost products in developing countries where it expects the percentage of the group’s sales to grow from 32 percent to 45 percent over the coming decade.

Food and beverage sales accounted for over 90 percent of Nestle’s sales. In Africa, Asia and Oceania, they jumped 10 percent to 4.1 billion francs, while sales rose only 2 percent in the Americas and 1.8 percent in Europe.

Nestle said organic growth reached 6.5 percent in the first quarter, while foreign exchange rates negatively impacted sales significantly.

The overall growth in all regions “confirms the momentum gathered in the latter part of 2009,” it said, noting an acceleration in demand in Western Europe and particularly strong performances in the emerging markets of Brazil, China, India and Russia.

Nestle said it gained market share in Western Europe thanks to the rollout of Nescafe’s Dolce Gusto and Green Blend coffees, while there were good performances from Maggi’s new Juicy Chicken range, Herta chilled products and doughs, Buitoni frozen pizzas and Nesquik.

In North America, Dreyer’s ice cream and Purina petcare started the year well, Nestle said.

Zuercher Kantonalbank said consensus expectations were clearly surpassed, noting better than expected performances by Alcon eyecare products. It said prices improved from last year’s low base, but said the effect of exchange rates was worse than expected.