FDBusiness.com

Nestlé Outlines Future Value Creation Model

 Breaking News
  • Glanbia Cheese Joint Venture to Build New €130 Million Mozzarella Cheese Facility Glanbia Cheese, the joint venture business between Glanbia plc and Leprino Foods, plans to build a new, world-class mozzarella cheese manufacturing facility in Portlaoise, County Laois, Ireland. A site for the new facility has been identified at the recently established Togher National Industrial Estate in Portlaoise. A total of €130 million will be invested in [...]...
  • PepsiCo Reveals the 10 Finalists Joining its 2018 Nutrition Greenhouse Programme PepsiCo has announced the 10 entrepreneurs that will form the second class of its health and wellness incubator in Europe. First launched in 2017 to support the next generation of food and beverage entrepreneurs, the PepsiCo Nutrition Greenhouse programme offers each of the 10 participating companies a €20,000 grant, and access to PepsiCo mentors and experts to take [...]...
  • PureCircle Increases Capacity to Supply Reb M PureCircle, the world’s leading producer and innovator of stevia sweeteners, has announced that its recent advances in expanding capacity now enable it to supply significantly more Reb M to global beverage and food companies. Using beverage sweetening as an equivalized example, PureCircle can now supply enough Reb M to sweeten about 500 million cases of zero-calorie [...]...
  • Introducing the Propack Synchronized Staging Transfer Model PSST/120 Propack has announced a new, economical, safe product delivery system that uses stepper servo technology to receive randomly presented products from baggers, pouchers and flow wrappers to synchronise product delivery to high-speed cartoning machines. With a maximum packing rate of 120 packs per minute (PPM) to 80 twin PPM (depending on product size), the PSST/120 [...]...
  • Bel to Produce Mini Babybel at its First Canadian Factory Bel Group, a world leader in branded cheese and a major player in the healthy snack market, plans to build its first Canadian plant in Sorel-Tracy, Quebec. The facility, which is scheduled to begin commercial production in early 2020, will be fully dedicated to producing Mini Babybel® cheese. These dairy snacks encased in small and [...]...

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

  • September 5, 2018Int'l Food Products and Processing Technologies Exhibition (WorldFood Istanbul)
  • September 15, 2018iba
  • September 25, 2018PPMA Show 2018
  • September 27, 2018Int'l Fruit Show (eurofruit)
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements