Consumer goods giant Nestle has posted a disappointing set of earnings for 2017, with sales growth falling to its lowest level in more than two decades.
The KitKat-maker reported that revenues rose 2.4 per cent last year on an organic basis, which was below analyst expectations for a 2.7 per cent increase. For this year, chief executive Mark Schneider said that Nestle was aiming for revenue growth of between 2 and 4 per cent.
The group also opened the door to a potential sale of its investment in L’Oreal, explaining that it would not raise its stake of 23 per cent in the French cosmetics group and that it would keep all its other options open.
It also said that it would not renew a shareholder pact with the Bettencourt family, which is also a major L’Oreal stakeholder, but that it remains “committed to the company that has given us very good returns over the years”.
L’Oreal’s sales growth helped to buoy Nestle’s results in 2017, which were challenged by a tough performance across its mass-market food and drinks business. Last week, L’Oreal said that it had the resources to buy out Nestle’s holding and is ready to do so.
Mr Schneider took over as boss around a year ago and has demonstrated a keen focus on merger and acquisition opportunities.
As well as hiving off Nestle’s US chocolate business, he has overseen the purchase of Canadian dietary supplements maker Atrium Innovations for $2.3bn.
On Thursday the group indicated that it would continue this strategy of “active portfolio management”.
“The sweet spot is in small to mid-sized deals, but we don’t want to rule out anything,” Schneider told reporters.
Additional reporting by newswires
