Nestlé’s water and premium beverages to become standalone business as firm plots growth
Laurent Freixe, Nestlé CEO.
Nestlé’s waters and premium beverages operations will become a standalone global business as part of the food and drink manufacturer’s action plan to fuel and accelerate growth.
Laurent Freixe, Nestlé CEO, said the move provides the opportunity to unlock the full potential of its products in addition to invest further in its brands and growth platforms.
“Our action plan will also improve the way we operate, making us more efficient, responsive and agile,” noted Freixe. “This will allow us to deliver value for all our stakeholders. I am confident that we can deliver superior, sustainable and profitable growth and gain market share, while transforming Nestlé for long-term success.”
Nestlé’s actions will include targeted investments in winning brands and growth platforms, more focused innovation activities to drive greater impact, and systematically addressing underperformers.
Nestlé will step up investment in advertising and marketing to support growth. The necessary resources will be generated through cost savings and growth leverage. In addition to the ongoing programs, Nestlé aims to deliver incremental cost savings of at least CHF 2.5 billion (€2.7bn) by the end of 2027. Work has already begun on key initiatives across procurement, commercial investments and structural costs.
Nestlé will also accelerate its digital transformation to be a real time, end-to-end connected enterprise, powered by data and artificial intelligence. It is additionally ensuring that sustainability is embedded into its activities.
Nestlé’s water and premium beverages activities will operate under the leadership of Muriel Lienau, head of Nestlé Waters Europe, as of January 1, 2025. The new management will evaluate the strategy for this business. This will include exploring partnership opportunities to enable Nestlé’s iconic brands and growth platforms to achieve their full potential.
Nestlé’s action plan will allow the company to deliver superior, sustainable and profitable growth. In the medium term, organic sales growth is expected to be at 4% plus in a normal operating environment, with an underlying operating profit margin 17.0% plus.
Nestlé confirms 2024 guidance, with organic sales growth of around 2%, underlying trading operating profit margin of around 17.0% and underlying EPS broadly flat in constant currency. Looking ahead to 2025, Nestlé expects an improvement in organic sales growth compared to 2024, with the underlying trading operating profit margin anticipated to be moderately lower than the 2024 guidance.
