Seeking Alpha

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."
From other sites
Comments (1)
  • John LaRosa
    , contributor
    Comments (76) | 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
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs