By Martinne Geller
LONDON Oct 1 Nestle hinted on Tuesday
it was getting closer to disposing of bad brands and shaking up
its portfolio to deal with businesses that have underperformed
for too long.
The company's chief executive Paul Bulcke told investors
Nestle had drawn up lists of businesses that could be fixed and
those that could not.
"Divestitures, we're going to have some," Bulcke said. "We
want to be in business, not in agony."
"The shortlists are there and now the action has to come.
The timelines have to be wise, but action will come," he told a
presentation to investors, stressing that managing the portfolio
was a top priority.
Without identifying specific brands, Bulcke said some had
been "sailing under the radar screen for too long without being
part of the party."
Suggesting the process is already under way, sources told
Reuters last week that Nestle's PowerBar energy bars were up for
Nestle's performance in recent quarters has lagged some
peers, in part because of the company's mammoth size and
multiple brands, from Gerber baby food to Perrier water to
Nescafe coffee to name only a few. The company posted 92.2
billion Swiss francs in annual sales last year and has 203.81
billion Swiss francs ($225.16 billion) in market capitalization.
Bulcke said other priorities included structural efficiency
and scaling back capital expenditure. Moving ahead, Nestle's
capital expenditure should be around 4 percent to 5 percent of
sales, he said, below 2012's 5.8 percent.
After consumer goods rival Unilever warned on
Monday of a sharper slowdown in its emerging markets, Bulcke
acknowledged that sales in the region were slower than before,
but added that growth was more stable than before. A degree of
slowdown was healthy, he said, given that the double-digit rates
in some markets, like China, was unsustainable.
Bulcke declined to comment on Nestle's plans regarding its
closely-watched 30 percent stake in L'Oreal beyond
repeating that all options were on the table. Restrictions on
selling the stake expire in April.
Nestle shares were down 0.6 percent at 62.85 euros at 1122