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Capital Markets Day: Nestlé presents plan to fuel and accelerate growth
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Saturday, 23 November, 2024, 16 : 00 PM [IST]
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Vevey, Switzerland
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Nestlé S.A. is holding a Capital Markets Day for investors and analysts focused on 'Accelerating Nestlé'. The presentations outline a clear action plan to drive the performance and transformation and to shape its long-term future.
Laurent Freixe, Nestlé CEO, said, "Nestlé is a strong company with global reach, exceptional demand generation and in-market capabilities. We have a diverse and strategically well-positioned product portfolio. Our iconic brands and innovative products connect with people every day, at every stage of their lives. These strengths give us a unique advantage and position us to win in the marketplace. We will now invest further in our brands and growth platforms to unlock the full potential of our products for our consumers and our customers. Our action plan will also improve the way we operate, making us more efficient, responsive and agile. This will allow us to deliver value for all our stakeholders. I am confident that we can deliver superior, sustainable and profitable growth and gain market share, while transforming Nestlé for long-term success."
The action plan presented will allow the company to drive category growth and improve market share performance. Actions will include targeted investments in winning brands and growth platforms, more focused innovation activities to drive greater impact, and systematically addressing underperformers. The company will step up investment in advertising and marketing to support growth. The necessary resources will be generated through cost savings and growth leverage. In addition to the ongoing programs, it aims to deliver incremental cost savings of at least CHF 2.5 billion by the end of 2027. Work has already begun on key initiatives across procurement, commercial investments and structural costs.
The company will also accelerate its digital transformation to be a real time, end-to-end connected enterprise, powered by data and artificial intelligence. It is additionally ensuring that sustainability is embedded into its activities.
As part of the action plan to drive operational performance and unlock potential, its water and premium beverages activities will become a global standalone business under the leadership of Muriel Lienau, head of Nestlé Waters Europe, as of January 1, 2025. The new management will evaluate the strategy for this business. This will include exploring partnership opportunities to enable Nestlé's iconic brands and growth platforms to achieve their full potential.
The action plan will allow the company to deliver superior, sustainable and profitable growth. In the medium term, organic sales growth is expected to be at 4% plus in a normal operating environment, with an underlying operating profit margin 17.0% plus.
The company confirms 2024 guidance, with organic sales growth of around 2%, underlying trading operating profit margin of around 17.0% and underlying EPS broadly flat in constant currency. Looking ahead to 2025, the company expects an improvement in organic sales growth compared to 2024, with the underlying trading operating profit margin anticipated to be moderately lower than the 2024 guidance.
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