Nestlé: new strategic priorities and share buybacks.
(CercleFinance.com) - Two days after the Third Point activist fund's arrival, Nestlé yesterday presented the key points of its new strategy.
The announcement follows the review ordered by new CEO Mark Schneider, who took office early this year. In essence, it entails a focus on growth, savings and share buybacks.
The Swiss agri-food giant, which intends to focus on "value creation", states that Nestlé's financial strategy seeks to strike the right balance between growth in EPS, a competitive return for shareholders, flexibility for external growth and access to the financial markets.
The first point: the group will concentrate its investments in the most dynamic markets, such as coffee, pet food, baby food, water and emerging markets.
Acquisitions are also envisaged "following a disciplined approach", which respects growth criteria, geographical exposure and specific levels of profitability. In addition, there may be disposals, which include the recent sale of the Sweets division in the United States.
The third point is that the group is considering taking steps to make savings in order to improve its margins, in proportions that have not been specified. Fourth point: Nestlé will begin a share buyback program amounting to 20 billion Swiss francs, or 7.5% of its current market capitalisation, which will run from 4 July 2017 to June 2020.
Nestlé said that it is committed to maintaining its sustainable dividend practices.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The announcement follows the review ordered by new CEO Mark Schneider, who took office early this year. In essence, it entails a focus on growth, savings and share buybacks.
The Swiss agri-food giant, which intends to focus on "value creation", states that Nestlé's financial strategy seeks to strike the right balance between growth in EPS, a competitive return for shareholders, flexibility for external growth and access to the financial markets.
The first point: the group will concentrate its investments in the most dynamic markets, such as coffee, pet food, baby food, water and emerging markets.
Acquisitions are also envisaged "following a disciplined approach", which respects growth criteria, geographical exposure and specific levels of profitability. In addition, there may be disposals, which include the recent sale of the Sweets division in the United States.
The third point is that the group is considering taking steps to make savings in order to improve its margins, in proportions that have not been specified. Fourth point: Nestlé will begin a share buyback program amounting to 20 billion Swiss francs, or 7.5% of its current market capitalisation, which will run from 4 July 2017 to June 2020.
Nestlé said that it is committed to maintaining its sustainable dividend practices.
Copyright (c) 2017 CercleFinance.com. All rights reserved.