Nestlé to Refresh Bottled-Water Business as Sales Turn Flat
October 17 2019 - 7:59AM
Dow Jones News
By WSJ City
Nestlé said it would overhaul its struggling bottled-water arm,
hoping to reinvigorate growth in a business grappling with rising
competition, high costs and growing concerns about single-use
plastic.
KEY FACTS
--- Its water arm will go from being a stand-alone to one
managed locally in Nestlé's various regions.
--- Nestlé Waters employs 28,000 people. A spokesman declined to
comment on whether there would be job losses.
--- In the water business, revenue was flat over the nine
months, while volumes dropped 2.2%.
--- The head of Nestlé Waters, Maurizio Patarnello, will leave
the company by the end of the year.
--- The change mimics a restructuring in the infant nutrition
arm where the company says results have improved.
--- Sales in the nine months ended Sept. 30 were 68.37bn Swiss
francs, up from 66.42bn francs year-on-year.
Why This Matters
Water is a "problem category" for Nestlé, said Jefferies analyst
Martin Deboo earlier this month, saying the business is losing
share to rivals in the US, its biggest market. The company backed
its 2019 estimates and said it would return 20bn francs to
investors over the next few years, primarily through share
buybacks. It didn't release profit figures.
Since taking over in 2017, CEO Mark Schneider has tried to focus
energies on a handful of core businesses he views as high-growth.
Water is one of these, along with nutrition, pet food and
coffee.Meanwhile, the company has faced scrutiny from activist
investor Daniel Loeb to improve its financial performance and sell
its stake in L'Oréal.
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(END) Dow Jones Newswires
October 17, 2019 07:44 ET (11:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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