Strong growth for Nestle

An advertising campaign fronted by pop group Girls Aloud today helped Nestle achieve strong first-quarter sales growth.

The food giant hailed the launch of chocolate bar KitKat Senses in the UK - which featured an advert with band member Sarah Harding unwrapping the hazelnut-cream bar on a red carpet, watched by photographers.

Nestle reported a 6% rise in first-quarter revenue to 25.7 billion Swiss francs (€15.8bn), compared to last year.

The Swiss-based firm, owner of the Nescafe coffee brand, said like-for-like group sales increased 9.8%, with the UK seeing “near double-digit organic growth”.

Nestle’s strong quarterly figures come despite soaring world prices for staple ingredients such as wheat and rice.

It gave a bullish outlook for the future, predicting raw material cost pressures will “abate in the course of 2008” and forecast its product prices will fall in the second half of the year.

Nestle said: “In view of its strong start to the year, Nestle foresees organic growth approaching the 2007 level for the full year, clearly above the company’s long-term outlook.” Organic growth in 2007 was 7.4%, and the firm added profit margins would improve further.

The food group benefited from continued “double-digit” growth in Eastern Europe, and singled out success in the roll-out of its Nescafe Dolce Gusto coffee capsule system.

Emerging markets in south Asia and the Middle East continued to perform well, while the company reported it had increased prices in North and Latin America to offset higher costs.

Nestle reported a “successful Easter”. Further to its UK launch of KitKat Senses, it said European market share for KitKat had grown with the re-launch of four-finger bars in Germany and France.

However, sales of water, which include Vittel and Perrier, fell 0.6% against the first quarter of 2007, amid “softer market conditions in the developed world”.