FDBusiness.com

Nestlé Outlines Future Value Creation Model

 Breaking News
  • Müller to Review UK Food Service Delivery Operation A food service delivery operation supplying fresh milk and other products to 3,000 non-residential customers in England and Wales which is suffering losses of around £5 million per annum, is to be reviewed by Müller Milk & Ingredients. The company has confirmed a 45 day review and consultation, placing 250 roles at risk of redundancy. [...]...
  • Ryvita’s New Re-Launch Following a hugely successful year in 2017, healthy snacking favourite Ryvita is kicking off 2018 with not only a brand new campaign but also an exciting re-freshed look in addition a host of new and innovative products. On a mission to help women enjoy positive healthy living every day, Ryvita has teamed up with CRUK and one of the [...]...
  • Campari Group Launches New Super Premium Gin Campari Group has launched its new super-premium Italian gin, O’ndina, in the UK. The UK is the first market to roll out the product, which will later launch globally. With the launch of O’ndina, Campari Group enters the fast-growing Super Premium Gin category, with this Small Batch Italian Gin, crafted in Italy using fresh basil [...]...
  • KITKAT Ruby Arrives in the UK Nestlé UK is introducing a Ruby chocolate version of its iconic four finger KITKAT. Consumers in the UK will be the first in Europe to try a four finger KITKAT made with Ruby chocolate, a fourth chocolate after dark, milk and white. This unique KITKAT offers a new taste experience. The crispy four-finger wafer bar is [...]...
  • A Wee Dram Goes Further Than You Think Thanks to Goplasticpallets.com It’s one of the world’s favourite food exports and it’s important to keep the whisky flowing at all times. As the US writer, Mark Twain said: “Too much of anything is bad, but too much good whisky is barely enough.” That’s why The Edrington Group, the international premium spirits company, approached Goplasticpallets.com when it needed [...]...

Nestlé Outlines Future Value Creation Model

Nestlé Outlines Future Value Creation Model
June 29
10:34 2017

Nestlé has announced another step forward in the implementation of its comprehensive value creation model. Early in 2017, the company’s management, together with the Nestlé board of directors, initiated a comprehensive review of the company’s capital structure and priorities to support and enhance its ability to deliver on its value creation model.

Nestlé regularly revisits its capital structure to reflect changing market conditions and strategic priorities. Nestlé’s financial strategy aims at striking the right balance between growth in earnings per share, competitive shareholder returns, flexibility for external growth and access to financial markets.

As a result of this review, Nestlé determined that capital spending will be focused particularly on advancing high-growth food and beverage categories such as coffee, pet care, infant nutrition and bottled water, as well as expanding its presence in high-growth geographic markets. In line with the company’s nutrition, health and wellness strategy, it will also pursue growth opportunities in consumer healthcare. Consistent with a disciplined approach to acquisitions, Nestlé will only prioritize external growth opportunities that fit within targeted categories and geographies, deliver attractive returns, and build on the company’s leadership position in fast growing food and beverage categories.

Nestlé’s recent announcement that it would explore strategic options for its US confectionery business is consistent with this overall approach. The company will continue to adjust its portfolio in line with its strategy and growth objectives.

Nestlé will also continue to assess opportunities for margin improvement through targeted efficiency programs that do not undermine the company’s performance in attractive long-term growth categories.

In the context of low interest rates and strong cash flow generation, share buybacks offer a viable option to create shareholder value. Therefore, as a result of its review, the board of directors has approved a share buyback program of up to SFr20 billion (€18 billion), to be completed by the end of June 2020. Should any sizeable acquisitions take place during this period, the share buyback program will be adapted accordingly.

The program is scheduled to start on 4 July 2017. The volume of monthly share buybacks will depend on market conditions but is likely to be backloaded in 2019 and 2020 to allow the pursuit of value-creating acquisition opportunities. Based on current projections, the company expects a net debt to EBITDA ratio of circa 1.5 in 2020.

The company is committed to maintaining its sustainable dividend practice.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • April 24, 2018Scandinavian Wine Expo
  • April 24, 2018InterFood Krasnodar
  • April 24, 2018Seafood Processing Global
  • May 2, 2018The Food and Drink Trade Show
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements