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Nestle CEO plans to jettison laggards, reduce capex

  • Nestle (NSRGY.PK) CEO Paul Bulcke told investors the company had completed a review of 97% of its 1,800 divisions and has a shortlist of businesses it will try to sell - "laggards it cannot fix," according to Bloomberg.
  • Analysts have cited Jenny Craig, PowerBar, and Lean Cuisine as candidates for jettison.
  • The move comes as Nestle delivered its weakest quarterly revenue growth in 4 years. Nestle fell yesterday after Unilever warned of a slowdown in emerging markets, which have been Nestle's main growth driver in the past.
  • Bulcke also said he plans to limit capex spending to 4-5% versus the previously forecast 5.7%: "Over the last three or four years we have increased our capex quite extensively ... We now want to sweat those assets."
Comments (1)
  • John LaRosa
    , contributor
    Comments (73) | Send Message
     
    No surprise here. Jenny Craig, as the most expensive commercial weight loss program, has seen revenues fall for the last 3-4 years. Also, when a large conglomerate like Nestle takes over a niche competitor, the results are more often bad than good. Remember Slim-Fast? It was a $600 million brand when Unilever bought it out, and they turned it into a $180 million brand last year. Lack of advertising and other marketing support--never a good thing for weight loss products/brands. Danny Abraham sold it for $2+ billion. Wow, did he sell at the right time!
    1 Oct 2013, 03:08 PM Reply Like
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