Home of Sth America’s biggest Muslim community out to prove it’s more than just about halal beef16 Feb 2017
Rising demand, opportunities in Islamic markets driving up Bulgaria’s halal certification and exports16 Feb 2017
Will the current spike in awareness boost Nigeria’s lagging halal industry?13 Feb 2017
Indonesia chasing quality to boost halal industry development30 Jan 2017
Halal-certified salmon, lamb and dried fruits: Chile’s global halal opportunities15 Jan 2017
Halal or not halal: Challenges and opportunities for Rotterdam, Europe’s busiest port08 Jan 2017
OVERVIEW-South Africa’s halal food industry04 Jan 2017
Food bloggers emerging as important influencers for halal restaurants12 Dec 2016
Halal food sector moves to maturity12 Dec 2016
How robust is Brazil’s $2 bln halal poultry industry?04 Dec 2016
New Nestle CEO ditches sales target after latest missPrint
Photo: Nestle CEO Ulf Mark Schneider(L) and Chief Financial Officer Francois-Xavier Roger(r) during a news conference at the company headquarters in Vevey, Switzerland, February 16, 2017. REUTERS/Pierre Albouy
Thu Feb 16, 2017 | 4:00am EST | VEVEY, Switzerland
Nestle's (NESN.S) new chief executive scrapped the food company's long-standing sales target as it reported disappointing annual results on Thursday, adopting a more cautious tone in an uncertain environment.
The maker of Kitkat chocolate bars and Nescafe coffee is aiming for 2 to 4 percent underlying sales growth this year, below analysts' estimates and the "Nestle Model" for growth of 5 to 6 percent.
In his first public appearance since becoming CEO at the start of the year, food industry newcomer Ulf Mark Schneider said the lower target reflected economic uncertainty.
"This is a volatile and still somewhat deflationary environment," Schneider told reporters at the company's Vevey headquarters. "We felt this was wise and prudent."
The earnings from Nestle are the latest in a series of tepid results from consumer goods groups which have blamed weakness in the emerging markets that had previously fueled their growth.
In 2016, Nestle's net profit fell and sales rose less than expected, hit by slowing emerging markets and deflation.
The company's shares were down 1.1 percent at 72.35 Swiss francs at 0845 GMT (2:45 a.m. ET).
Schneider replaced the "Nestle Model," which the Swiss company has missed for four straight years, with the slightly vaguer goal of "mid-single-digit organic growth and significant structural cost savings by 2020".
He said he expects pricing to improve this year and plans to use a combination of cost-cutting and portfolio management to help hit his mid-term targets.
The company, which also makes Gerber baby food and Perrier water, forecast a "stable" trading operating profit margin in 2017, due to expectations for increased restructuring costs of around 500 million Swiss francs ($498 million).
WEAKER THAN EXPECTED
Nestle, the world's largest packaged food group, reported 2016 sales of 89.5 billion Swiss francs ($89.3 billion), up 3.2 percent on an organic basis. That was below the 4.2 percent growth seen in 2015 and marks the fourth time Nestle has missed its model for 5-6 percent growth.
Analysts on average were expecting 2016 growth of 3.4 percent, according to a Reuters poll.
Net profit fell to 8.5 billion francs, well short of the average estimate for 9.59 billion francs in the poll, hit by a one-off non-cash adjustment to deferred taxes and an inventory level adjustment at Nestle Skin Health.
Nestle proposed to increase its dividend to 2.30 francs per share, after 2.25 francs last year.
Growth in emerging markets slowed to 5.3 percent from 7.0 percent a year ago, hit by continuing problems at the Yinlu drinks business in China. ($1 = 1.0038 Swiss francs)
(Additional reporting by Angelika Gruber; Editing by Michael Shields/Keith Weir)
© Thomson Reuters 2017 All rights reserved
AHDB Beef & Lamb Halal Seminar
- Crowne Plaza Stratford Upon Avon Bridge Foot Stratford-upon-Avon CV37 6YR
Global Trade Development Week 8.0
- Jakarta, Indonesia
Turin Islamic Economic Forum
- Torino Incontra – via Nino Costa, 8
UK’s Halal Food Authority receives ESMA recognition, gains access to UAE market
19 Feb 2017 | regulations-compliance
Unilever rejects $143 bln Kraft offer as bid too low
17 Feb 2017 | finance-investing
Kraft Heinz proposes merger deal which Unilever rejects
17 Feb 2017 | finance-investing
Dubai Exports program to assist importers
17 Feb 2017 | marketing-sales