UPDATE 2-Nestle restates 2009 guidance, sees better H2
* Repeats organic growth, EBIT margin targets for 2009
* Says water business improved in N.America
* Nutrition business seen better in H2
* No need to renegotiate sale of Alcon stake to Novartis
* Europe head sees commodities, forex markets stabilising
(Adds quotes, details)
ZURICH, June 29 (Reuters) - Nestle AG (NESN.VX), the world's biggest food group, reiterated on Monday its target for 2009 organic sales growth "at least approaching 5 percent", as well as an increase in the operating margin.
"We stick to our guidance we have given but we do see performance weighted to the second half when we have growth coming less from pricing and more from volume growth," Chief Executive Paul Bulcke told an online investor seminar.
He also stuck to a forecast for a rise in the earnings before interest and tax (EBIT) margin in constant currencies.
Bulcke said Nestle sees first-quarter trends persisting in both Europe and North America, with petcare and frozen foods performing well in both regions as consumers eat out less.
"We expect to see that our second-half performance will be slightly better than the first half," chief financial officer Jim Singh said, adding the view was supported by likely better economic conditions and an easier comparison with last year.
Nestle, which is due to post first-half results on Aug. 10, reported organic sales growth, which strips out currency effects and acquisitions, of 3.8 percent in the first quarter.
However, the maker of Nescafe coffee, KitKat chocolate bars and Maggi soup also reported overall first-quarter sales fell 2.1 percent to 25.2 billion Swiss francs ($23.16 billion), undershooting forecasts due to a strong Swiss franc.
Nestle shares were little moved by the presentation, up 0.9 percent at 41.20 Swiss francs at 1519 GMT, in line with a 1 percent firmer DJ Stoxx European food and drinks sector index .SX3P.
Bulcke said Nestle's struggling bottled water business had seen some improvement in North America although western Europe was unchanged despite share gains in some markets.
Singh said he expected improved organic growth and margins from the water business going forward.
Bulcke said Nestle's Nutrition business should also improve in the second half, with some signs of improvement in the baby food business in Europe and U.S. diet food brand Jenny Craig.
Singh said Nestle was sticking to its plans to sell its stake in the Alcon (ACL.N) eye care business to drug group Novartis (NOVN.VX)in 2010, rejecting speculation it would have to revisit the deal sealed in 2008 due to volatile markets.
"We firmly believe that the business looks to deliver excellent results and therefore there is no need to renegotiate," he said.
Meanwhile, Laurent Freixe, head of Nestle in Europe, said he saw commodities and foreign exchange markets stabilising.
"There is some light at the end of the tunnel," he said. "The situation will continue to improve."
Nestle, a major processor of coffee, cocoa and milk, still expects input costs to rise an average of 2 percent in 2009, Singh said. ($1=1.088 Swiss Franc) (Editing by Greg Mahlich)
