In 1998, the Nestlé Group's consolidated sales reached CHF 71.7 billion, an increase of 2.4 percent over the preceding year. In contrast with 1997, when a positive variation of exchange rates contributed 8.1% to the increase in sales, the exchange rates of most foreign currencies against the Swiss franc had a negative effect of 5.6% in 1998. Selling prices increased by 1.8% in spite of the difficult economic conditions prevailing during the year under review, while acquisitions - net of disinvestments - contributed 2.9% to the increase in sales. Real internal growth reached 3.3% for the full year, a slight acceleration compared with 3.2% in 1997.
This means that the ambitious target of 4% which the Group had set for itself was not met. There were in fact successive economic crises in several emerging regions of the world in Southeast Asia and Latin America as well as in Eastern Europe.
Moreover, the slowing down of sales at the end of the year reflects the general sluggishness of the world economy during the second half of 1998. It was aggravated, as far as Nestlé is concerned, by extraordinary events outside the Company's control.
Under these circumstances, Nestlé, which was able to reinforce its competitive positions, considers the result obtained as satisfactory. Real internal growth was good in the food area in North America as well as in Africa and the Middle East. It was strong in mineral waters, in breakfast cereals and in pharmaceutical products.
Full results for 1998 as well as the dividend proposal will be released on March 26, 1999, following the Meeting of the Board of Directors of March 25. The General Meeting of Shareholders will take place on June 3, 1999, in Lausanne.