It will review its low -performance vitamin business, which can lead to the divestment of some brands. The information was released on Thursday (24), after the company reported that the volumes of sales in the first semester grew more slowly than expected by analysts.
Nestlé’s shares, the world’s largest food producer, fell to the lowest level in six months at the beginning of market negotiations and were 4.7% lower at 9:50 am.
As the global economic slowdown pressed customers and led them to look for cheaper alternatives, the Swiss manufacturer of Kitkat chocolate bars, Café Nespresso and Tempero Maggi had more difficulty selling their brand projects.
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The results increase investor pressure on the executive president Laurent Freixe to recover the price of stocks and sales of the company. Since its appointment in August last year, Nestlé’s stock price has been below its rivals, including Unilever and Danone.
The Swiss company kept its goal to 2025, saying it expects organic sales growth to improve. Nestlé estimated an underlying commercial operating profit margin of 16%or greater, including the negative impact of current tariffs and exchange rates.
Strategic review
Nestlé’s vitamin, minerals and supplements business generates about 1 billion Swiss francs in annual sales, Nestlé told Nestlé.
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“We launched a strategic review of our low performance brands, including Nature’s Bounty, Osteo Bi-Flex, Puritan’s Pride and US own brands, which can result in the divestment of these brands,” Nestlé told Nestlé.
Freixe said Nestlé would focus on its premium global VMs and that a possible divestment of other brands could occur by 2026.
Nestlé said that the organic growth of sales in the first half, which excludes the impact of currency and acquisition movements, increased by 2.9% in six months to June, just above the average of analyst forecasts, 2.8%.
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However, real internal growth, or Rig, was 0.2%, below the consensual forecast of 0.4%, reflecting a milder demand as customers refuse to increase prices.
The total reported sales decreased by 1.8% to 44.2 billion Swiss francs compared to the expectations of 44.6 billion francs analysts, a fall that Nestlé attributed partly to the negative impact of 4.7% of the exchange rate, as the Swiss Franco strengthened this year.
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