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Nestle ‘08 sales growth beats goal, confident for ‘09

Nestle, the world's biggest food group, beat forecasts with underlying sales growth of 8.3% in 2008, although sales and net profit slightly undershot, and it was cautiously upbeat for 2009.

Nestle reported that net profit rose 69% to 18 billion Swiss francs, compared to average analyst forecasts for 20 billion Swiss francs, helped by a big book gain from the sale of a 25% stake in US eyecare firm Alcon.

The Vevey-based maker of Nescafe coffee, KitKat chocolate bars and Maggi soup said sales rose 2.2% to 109.9 billion Swiss francs, compared to 110.5 billion Swiss francs forecast in a Reuters poll, as a strong Swiss franc dampened volume growth.

Analysts had expected closely-watched organic or underlying sales growth of 8.2%, after an 8.9% rise for the first nine months of the year.

For 2009, Nestle said it was committed to achieving organic growth “at least approaching 5%” compared to a long-term goal for 5% to 6% underlying growth, and reiterated its goal of profit margin improvement at constant currencies.

Analysts expect organic sales growth of 4.5% in 2009.

Big rivals like Procter & Gamble (P&G) and Kraft have recently cut their targets due to the consumer slowdown and retailer destocking, while Unilever said it could not give a specific 2009 outlook. (Reuters)