Corporate Profiles - 2024 - 98

COMPANY overview
Nestle SA
N
New CEO looks to boost productivity,
innovations with focus on execution
estle SA has been challenged by slipping
sales amid a difficult consumer environment
characterized by pricing pressure.
Consequently, Laurent Freixe, the Switzerlandbased
company's new global chief executive
officer, has had his hands full since taking over
the top leadership post Sept. 1 from Ulf Mark
Schneider, who was CEO for eight years and
has now left the company.
" There will always be challenges, but we have
unparalleled strengths, such as iconic brands
and products, an unmatched global presence,
leading innovation and execution capabilities,
and above all, exceptional people and teams, "
Freixe said when he was named global CEO in
late August. " We can strategically position Nestle
to lead and win everywhere we operate. "
He clarified his goals for the world's largest
($4.98 billion), although a rise in net profit margin
pushed up earnings per share by 1.8% to
2.16 Swiss francs ($1.92) on a reported basis.
The company also lowered its full-year organic
sales guidance from " around 4% " to
" at least 3%, " citing a challenging consumer
environment. It now expects mid-single-digit
growth in underlying EPS in constant currency,
compared with its earlier estimate of a 6% to
10% increase.
Financial challenges also have impacted
the company's US business. Citing the need
to optimize its manufacturing network, Nestle
laid off nearly 300 workers at its Solon, Ohio,
manufacturing facility between last fall and this
spring and shifted production to other US sites.
On the plus side, Nestle's North American
business posted first-half sales growth in water
products, flavored water and confectionery, led
by Toll House in the United States and Kit Kat
in Canada.
The company also continues to roll out inChief
executive officer -
Laurent Freixe
food company during an Aug. 23 analyst call,
stating that productivity and cost management
would allow strategic investments in Nestle's
key brands and key innovations.
" We will be laser-focused on execution,
starting with quality, safety, simplicity, speed
and agility, " Freixe said. " This is pivotal to our
success going forward. "
Nestle has plenty of work ahead to lift net
earnings following improved but mixed results
from its fiscal 2024 first half. Net earnings for
the period were flat at 5.6 billion Swiss francs
98 \ October 2024
novations, most recently with the introduction
of DiGiorno Thin & Crispy Stuffed Crust pizza,
Stouffer's Classic Single Serve and the launch
of its Vital Pursuit line of frozen meals targeted
at users of GLP-1 weight-loss medication and
consumers focused on weight management.
Positioning toward the latter trend is also evident
with Boost nutritional drinks and Optifast
diet-management products.
Nestle continues to hold the No. 1 spot
among the most valuable global food brands,
according to a recent report from Brand Finance,
despite a 7% drop in the company's
brand value from $22.4 billion to $20.8 billion.
The
size
and
content
of
the company's
portfolio may change as Nestle prioritizes the
brands within it to make sure the appropriate
resources are targeted to those " big bets " that
can thrive and win, Freixe said in response to
questions from the Aug. 23 analyst call.
" Not everything is equal in the portfolio, " he
said. " So, we want to make sure that we resource
and support the best possible way the
core. " CP
Nestle SA net profit
in millions of Swiss francs
2023
11,209
2022
9,270
2021
16,905
Source: Nestle SA
Nestle SA net sales
in millions of Swiss francs
2023
92.998
2022
94.424
2021
Source: Nestle SA
87.088
Nestle SA share price
in Swiss francs
103
110
Source: SIX Swiss Exchange
82
89
96
Sept. Nov.
2023
NESTLE SA
Jan.
2024
HIGH =
Sept. 21, 2023 = 104.52
LOW =
Aug. 5, 2024 = 87.28
Sept. 4, 2024 = 89.64
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Corporate Profiles - 2024

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