Nestle Sales Rise

NEW YORK - Oct 20/05 - SNS -- Nestle Group reported consolidated sales of CHF 67.7 billion during the first nine months of 2005.

Real internal growth accelerated to 3.8%, while pricing, at 2.0%, was also higher than in the first half, resulting in organic growth of 5.8%. Foreign exchange fluctuations had a minimal negative impact of -0.2% on consolidated Swiss franc sales while divestitures, net of acquisitions, reduced Swiss franc sales by -0.8%.

Nestle said. "The 5.6% organic growth of the food and beverage business was achieved through a continued emphasis in our markets on the successful extension of our distribution beyond the traditional supermarket grocery channel. They are also making effective use of consumer insight to build both a strong pipeline of product innovation and dynamic, consumer-relevant communication."

Zone Europe delivered positive organic growth of 1.6%, a slight improvement on the first half of the year. Western Europe's organic growth rose slightly, to 1.3%, in spite of continued challenging business conditions in some areas. Nestle Purina PetCare Europe and Great Britain did particularly well in Western Europe. France accelerated to achieve positive organic growth. Eastern Europe reached 4.6% organic growth, with Russia continuing to be held back by the restructuring of the distribution network there. Russia is expected to return to normal growth rates in 2006.

Zone Americas' organic growth remained impressive at 7.3%. There were good performances in the US and Canada, with the Nestle Prepared Food Company, Nestle Purina PetCare North America and Dreyer's Grand Ice Cream Holdings doing particularly well. Latin America's organic growth rose to 8.9%, due to an acceleration in Brazil. Mexico and the smaller regions continued to experience strong organic growth.

Zone Asia, Oceania and Africa's organic growth accelerated to 7.0%. The recovery measures taken in Greater China, following the product exchange earlier in the year, are delivering sales growth again. Among many strong performances in other parts of the zone, India and the Middle East both achieved double-digit organic growth. Japan's real internal growth accelerated to be positive for the year to date, although pricing pressure held back organic growth. There was also improved organic growth in the Philippines and Africa.

Nestle Waters' organic growth rose to 8.4%. Although Europe was flat, North America and the rest of the world experienced strong organic growth.

Within Other activities, Alcon, with 9.8% organic growth, once again enjoyed an excellent performance, as did Nespresso, with about 30% organic growth.