ZURICH (AFX) - Nestle AG's raw material environment will remain tough this year, Roddy Child-Villiers, Nestle head of investor relations said.
'Cost inflation is a factor to watch for 2006,' with slight increases experienced in milk and cocoa and heavy increases in green coffee and sugar, he said in a conference call.
In its first quarter sales, released this morning, Nestle was partially able to compensate for the negative effect by price increases, which contributed 1.9 pct to overall growth.
Nestle also said that its GLOBE programme -- which aims to offset higher raw material prices in coffee, cocoa, sugar, milk and oil -- is well on track.
The programme's positive effect should be more pronounced as the year progresses, it said.
Of its ongoing (second) 3-bln sfr share buyback programme, shares worth over 1.4 bln sfr have so far been repurchased, Child-Villiers said.
Nestle reported in-line first quarter sales of 22.795 bln sfr, up from 19.971 bln the year earlier, citing strong organic growth with a positive contribution from all regions and activities.
Organic sales growth was 6.7 pct, beating the average analyst forecast of 6.0 pct. Real internal growth (RIG), excluding currency effects, divestments and acquisitions, reached 4.8 pct, beating the 4.2 pct average forecast. afx.zurich@afxnews.com at/cml COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
