Nestle CEO: Committed to Organic Sales Growth Ambition of 5% to 6%
October 20 2016 - 6:18AM
Dow Jones News
By Brian Blackstone
VEVEY, Switzerland--Nestle SA (NESN.EB) is committed to its
"ambition" of organic sales growth of between 5% and 6% despite
falling short in recent years, the company's chief executive, Paul
Bulcke, said Thursday.
Faster global economic growth and an end to deflationary
headwinds would help Nestle get back to its long-term revenue
objective dubbed the "Nestle model," Mr. Bulcke told The Wall
Street Journal in an interview at the company's headquarters in
Vevey, Switzerland, along Lake Geneva.
"I do believe that in normal conditions that 5%-6% is definitely
something we have to aspire to," Mr. Bulcke said. "We're living in
quite special conditions. Everyone has to admit that.
"I will not...take it from the table as an ambition," said Mr.
Bulcke, who will leave his post after more than eight years as CEO
at the end of the year and become Nestle board chairman next year.
He joined Nestle in 1979 as a marketing trainee and steadily rose
through the ranks, becoming CEO in 2008.
Under his stewardship, Nestle weathered the global financial
crisis and its aftermath as a mix of rising prices, strong growth
in emerging markets and popularity of brands such as Nespresso
boosted revenue.
But some of those global economic forces reversed in recent
years. The company has missed its 5%-6% organic sales growth
target--which strips out currencies and acquisitions--for three
years running, and Nestle said Thursday that it will fall short
again this year with expected growth of 3.5%.
"Bulcke has been fighting fires over the last three or four
years," said Jon Cox, head of Swiss equities at Kepler Cheuvreux.
"He inherited a business that did very well up until 2012. After
2013 he has been struggling to get growth back in a much more
competitive environment."
Looking back at his CEO tenure, Mr. Bulcke said one frustration
is that the company wasn't always quick to respond to fast-changing
consumer needs, citing Nestle brands Lean Cuisine and Stouffer's as
examples.
Still, he pointed to areas of innovation where he thinks Nestle
is poised to prosper. One of the company's most prominent moves
under Mr. Bulcke's stewardship has been a shift into health
sciences and medical foods, which include prescription-based
powders and drinks intended to treat diseases such as Alzheimer's
and intestinal disorders.
"I think this company is stronger, and is going to get out of
this a little bit depressed environment stronger," he said.
Mr. Bulcke will be succeeded on Jan. 1 by Ulf Mark Schneider,
who headed German health-care company Fresenius SE before joining
Nestle in September.
Write to Brian Blackstone at brian.blackstone@wsj.com
(END) Dow Jones Newswires
October 20, 2016 07:03 ET (11:03 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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