Nestlé: Strong Start in 2001

• Consolidated sales up 4.5 percent
• Real internal growth exceeded target with 4.6 percent
• All zones and all product groups contributed to growth
• Peter Brabeck, CEO of Nestlé: " With the strong real internal growth in the first quarter, Nestlé is well on track for another record year in sales and profits."
• 1:10 share split to be completed by June 11, 2001

Pursuing the positive growth trend of the past years, the Nestlé Group's consolidated sales reached CHF 19.4 billion during the first three months of 2001, a 4.5 percent increase over the period January-March 2000. At comparable structure and constant exchange rates, sales rose by 9.6 percent.

Cumulative real internal growth at the end of March stood at 4.6 percent, as compared to 3.8 percent during the first three months of 2000. All geographic zones and all activities contributed to this growth; particularly good progress was achieved in Asia, Oceania and Africa, as well as in Alcon and in the water business. Europe, with a real internal growth of 2.5 percent, exceeded its objective.

With the depreciation of all major currencies - the US dollar excepted - against the Swiss franc, exchange rates in 2001 had an adverse impact of 4 percent on consolidated Swiss franc sales. Divestitures, net of acquisitions, lowered the consolidated sales by 1.1 percent.

The largest single factor in the nominal sales growth, amounting to 5 percent, is represented by changes in selling prices and other items. Price adaptations account for 1.7 percent. The balance results from a review of trade spend and rebates which has a one-time positive impact on the corresponding net sales in 2001 but without any effect on the absolute level of profits. This initiative is in line with a global drive to improve the transparency and the efficiency of Nestlé's trade spend.

Beverages continued to perform well with a RIG of 5.7 percent. All parts of the product group were above 4 percent. Milk products, nutrition and ice cream achieved a RIG of 3.5 percent, with the nutrition and cereals businesses doing particularly well, and milk being above the product group average. Prepared dishes, cooking aids and pet care reached 4.5 percent RIG due to strong performances by frozen food, culinary chilled products and Friskies Europe. Chocolate, confectionery and biscuits reached 4 percent due to a continued good performance by the chocolate business.
With real internal growth during the first quarter clearly above target, the Nestlé Group is off to a good start for 2001. Unless major negative influences are felt in the economic or monetary context, the Group looks forward to ending the year with another record in sales and profits.

On April 5, 2001, the General Meeting of the Company approved a 1:10 split of the Nestlé S.A. shares. The law will allow such splits as from May 1, 2001 and all Nestlé shares will be converted to a nominal value of CHF 1.-. The new shares will be traded for the first time on June 11, 2001. The value of the American Depositary Receipts will be adjusted from 20 ADRs per old share to 4 ADRs per new share; the newly valued ADRs will be traded on June 15 for the first time. The exchange operations will be handled directly by the depositary banks or by the Share Office of Nestlé S.A. in Cham. Shareholders who administer the shares themselves are invited to send them to the Nestlé Share Office for the change. The exchange operation is free of charge for shareholders.

Nestlé S.A. CFO Wolfgang Reichenberger will be hosting a financial analysts' presentation today at 0900 CET and at 1500 CET. These can be listened to via http://www.nestle.com.