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Nestle SA (NESN.VX), the world's largest food and beverages company, Thursday gave a guarded outlook for 2009 even though it raised its dividend after reporting a 69% rise in 2008 net profit due to higher sales and the proceeds from disposals.

The maker of Nescafe soluble coffee and KitKat chocolate bars said it expects to post organic growth of "at least approaching 5%," in 2009, which would be below its long-standing annual organic growth rate target of 5% to 6%. But it expects to improve operating profit margins in constant currencies.

Net profit for 2008 increased to 18.04 billion Swiss francs ($15.4 billion) from CHF10.65 billion in 2007, boosted by a $10.4 billion gain on the partial sale of eye-care company Alcon Inc. (ACL) to Novartis AG (NOVN.VX).

Sales rose to CHF109.91 billion, up 2.2% from CHF107.55 billion in 2007.

Still, the results were below consensus estimates of CHF20.1 billion for the bottom line and CHF110.3 billion for sales.

Organic growth, a performance yardstick comprising volume growth and price increases, was 8.3%, on the high end of consensus estimates of 8.2%.

Nestle remained vague on the future of its large stake of about 29% in French cosmetics company L'Oreal SA (12032.FR). It said it will continue to take a long-term strategic view on L'Oreal, adding it doesn't need to take "any action or decision" regarding its stake next April.

Markets have eagerly awaited a statement on L'Oreal due to mounting speculation Nestle may soon sell its stake.

Nestle and the other controlling L'Oreal shareholder, the French Bettencourt family, entered a lockup agreement several years ago but part of the contract will expire April 29.

Nestle is proposing to increase its dividend by around 15% to CHF1.40 per share.

The company said it plans to spend around CHF4 billion on share buybacks this year under a CHF25 billion scheme launched in 2007.

Nestle shares closed at CHF37.02 Wednesday. They are down 11% so far this year.

 
   Company Web site: www.nestle.com 
 
   -By Martin Gelnar, Dow Jones Newswires, +41 43 443 8042; martin.gelnar@dowjones.com