Nestlé Raises Organic Growth Outlook

Thursday, 13. March 2008 07:31
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* Very strong organic growth projected for first
quarter 2008
* Full year 2008 organic growth to approach 2007 level
* Expected EBIT margin improvement in constant
currencies reconfirmed

Vevey, March 13, 2008 - Nestlé expects organic growth for the full
year 2008 to be close to the previous year's level and clearly above
the long-term trend target of between 5 and 6 percent.

During 2007 and in the current year, commodity markets have been
characterized by sharp upward movements and increased volatility.
This reflects strong global demand for food, accelerating usage of
food raw materials for biofuels and the decisive presence in the
market of non-traditional speculative players.

Consequently, the Group was forced to advance price increases for
finished goods in order to partially absorb the higher input costs.
Combined with the pricing effects in place at the end of last year,
this accounts for a strong pricing element in organic growth for the
first two months of 2008. At the same time, the Company accelerated
its real internal growth momentum and had a successful early Easter
season as well as an additional sales day in February. Together,
these factors have resulted in an outstanding organic growth rate for
the first two months, and this will be reflected in the first quarter
sales which will be published on April 21, 2008.

The other elements influencing sales - foreign exchange as well as
acquisitions and divestitures - are evolving as expected. Currencies,
mainly as a result of the strength of the Swiss franc relative to the
US dollar, but also to the Euro and other currencies, will weigh on
consolidated sales, whereas acquisitions net of divestitures, mainly
due to Novartis Medical Nutrition and Gerber, will boost sales
growth.

Peter Brabeck-Letmathe, Chairman and CEO of Nestlé, said: "The
Group's organic growth is off to a very strong start in 2008. This
demonstrates the benefits of Nestlé's strategic reorientation to
Nutrition, Health and Wellness, reflected in the strong underlying
momentum in our business, but also our strategy to respond
immediately to exceptional cost evolutions in the commodity markets.
We expect our raw material cost pressures to abate somewhat in the
course of the year, and foresee price increases to trend lower in the
second half of 2008, resulting in a full year organic growth rate
close to the level reached in 2007, clearly above our long-term
target. As for full year 2008 results, we maintain our commitment to
the Nestlé model, delivering once again an improvement in the EBIT
margin in constant currencies."


Contacts:
Media: François-Xavier Perroud
Tel.: +41-21-924 2596
Investors: Roddy
Child-Villiers Tel.: +41-21-924 3622



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Nestlé S.A.
Avenue Nestlé 55 Vevey

WKN: 887208; ISIN:
CH0012056047; Index: SLCI, SMI, SPI, SMIEXP;
Listed: Main Market in SWX Swiss Exchange;
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