GENEVA (AP) -- Swiss food and drinks giant Nestle SA reported first-quarter sales of 20.26 billion Swiss francs ($22.64 billion) Friday -- a more than 9 percent drop from comparable sales a year ago -- but organic growth was still up strongly.
The Vevey, Switzerland-based company blamed the declining sales on the strength of the Swiss franc, which has been soaring against the dollar. It said the franc's effect on exports and exchange rates shaved as much as 9.8 percent off its first-quarter sales. The company had posted sales of 22.34 billion francs in the first quarter of 2010.
It said turnover on sales was down 1.2 percent compared with first-quarter sales a year ago.
Nestle CEO Paul Bulcke, however, said the company "achieved growth in all categories in the first three months of 2011, maintaining last year's momentum."
By that measure, the world's biggest food and beverage maker said, its organic sales growth was still robust at 6.4 percent, while real internal growth was 4.9 percent, reflecting what the company called "strong, broad-based growth, building on the momentum in 2010."
Bulcke said the company was continuing to invest in research and development and "consumer-facing marketing," while dealing with higher input costs and ensuring a balance between savings and pricing.
"In view of the strong start to the year, we are able to reconfirm our guidance for 2011 as a whole" -- continued strong organic growth.
Nestle said the organic growth was 4.3 percent in the Americas, 3.9 percent in Europe and 13.8 percent in Asia, Oceania and Africa.
That made for a positive outlook, the company's statement said.
"The first quarter of 2011 saw a number of high-impact events ranging from civil unrest and natural disasters to extreme volatility in raw material prices," it said.
"Nonetheless, our strong momentum, both in organic growth and our drive for improved efficiency and effectiveness, enables us to confirm our full-year guidance: to achieve the Nestle Model of organic growth between 5 percent and 6 percent and a margin improvement in constant currencies."
Earlier this year Nestle boasted a full-year net profit for 2010 of 34.23 billion francs, inflated by the sale of its stake in eye care company Alcon to Swiss drug maker Novartis AG, that added 24.5 billion francs net to Nestle's balance sheet.
But Nestle said Friday the disposal of Alcon, taking into account the effect of acquiring Kraft Foods Inc.'s frozen pizza business early in 2010, led to a contraction of 5.9 percent of turnover.