The food giant presented its new strategy on Tuesday. Nestlé plans savings of at least 2.5 billion francs by the end of 2027. At the same time, investments in advertising and marketing will increase.
The Vevey group presented its strategy on the sidelines of its investor day. However, he did not detail his savings plan. We therefore do not know the consequences for employment.
Advertising and marketing spending will be increased to 9% of sales by the end of 2025. “Required resources will be generated through cost savings and growth leverage,” the company wrote in a press release.
“We will invest more in our brands and our growth pillars in order to exploit the full potential of our products”, with the objective of “achieving superior, sustainable and profitable growth and gaining market share”, underlined general director Laurent Freixe.
Reorganization in the beverage sector
The multinational has also decided to automate its activities in “high-end” waters (San Pellegrino, Perrier, Acqua Panna, Nestlé Purelife) and drinks (Nesquik, Nestea, Milo, Nescafé). Muriel Lienau, who heads the Nestlé Waters unit in Europe, will be responsible from the start of 2025.
Nestlé does not specify whether separating mineral waters from the Nestlé entity is a first step towards a sale of its activities.
The stock fell
Nestlé shares fell to just over 76 francs on Tuesday morning, something not seen since 2015. Over the last three years, the stock has lost 40% of its value.
The reason: Nestlé’s sales are declining, as consumers turn to cheaper brands, but also following the increase in prescriptions for new anti-obesity drugs.
Finances
Nestlé has confirmed that it anticipates organic sales growth of around 2% for the current financial year. At the end of July, the group lowered this objective to “at least 3%”, compared to 4% previously. The recurring operating margin should rise to around 17.0%, compared to 17.3% in 2023, while recurring earnings per share should remain stable over one year.
In 2025, the group expects an improvement in organic growth, accompanied by a “moderate” decline in operational profitability. In the medium term, the company targets organic revenue of at least 4% and an underlying operating margin of at least 17%.
Radio subject: Nicolas Rossé
Web adaptation: Julie Liardet with ats
