London, Oct. 1 (Reuters): Nestle hinted on Tuesday it was getting closer to disposing of bad brands and shaking up its portfolio to deal with businesses that have underperformed for too long.
Chief executive Paul Bulcke told investors Nestle had drawn up lists of businesses that could be fixed and those that could not. “Divestitures, we’re going to have some,” Bulcke said. “We want to be in business, not in agony.”
“The shortlists are there and now the action has to come. The timelines have to be wise, but action will come,” he told investors, stressing that managing the portfolio was a top priority.
Without identifying specific brands, Bulcke said some had been “sailing under the radar screen for too long without being part of the party”.
Suggesting the process is under way, sources said last week that Nestle’s PowerBar energy bars were up for sale.
Nestle’s performance in recent quarters has lagged some peers, in part because of the company’s mammoth size and multiple brands, from Gerber baby food to Perrier water to Nescafe coffee to name only a few. The company posted 92.2 billion Swiss francs in annual sales last year and has 203.81 billion Swiss francs ($225.16 billion) in market capitalisation.