Activist Investor Pushes for More Changes at Nestlé -- WSJ
21 Octobre 2017 - 09:02AM
Dow Jones News
By Saabira Chaudhuri
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 21, 2017).
Activist investor Daniel Loeb on Friday praised Nestlé SA's
recent moves to raise shareholder value but indicated he will
continue to push the packaged foods giant to make further
changes.
In a letter to investors, the Third Point LLC hedge fund founder
said he was "pleased" with Nestlé Chief Executive Mark Schneider's
"overall shift in tone, particularly indicated by the willingness
to give a specific margin target and commit to selling assets."
In recent months Mr. Loeb has become one of Nestlé's biggest
shareholders, building up a 1.3% stake in the maker of KitKat
chocolate and Nescafe coffee. He pushed for four big changes of
which Nestlé has already begun executing three: driving growth
through shuffling its portfolio, raising leverage to return capital
to shareholders and setting a formal profit margin target.
However, Mr. Schneider has resisted Mr. Loeb's call for the
company to sell its 23.29% stake in L'Oréal SA, saying the
investment remains a good one.
On Friday, Mr. Loeb indicated he won't back down from urging
Nestlé to do more.
"We believe there is much more opportunity to unlock value,
particularly by further optimizing capital allocation and carefully
evaluating the L'Oréal stake as part of a comprehensive portfolio
review," he said.
Nestlé didn't immediately respond to a request for comment on
Mr. Loeb's remarks.
Mr. Loeb, the Third Point LLC hedge fund founder who flew to
London last month to attend Nestlé's investor day said he had been
impressed by Mr. Schneider's "strong presentation" at the event. He
said the company's new target of a 17.5% to 18.5% profit margin by
2020 and its $20.8 billion share buyback "imply a return to double
digit EPS growth through 2020 after five years of essentially zero
growth."
"Meeting these goals alone would create enormous value for
shareholders, " said Mr. Loeb.
His largely bullish remarks give Nestlé some breathing room as
the company struggles to jump-start sales growth.
Earlier this year Nestlé ditched a longstanding goal of
achieving 5% to 6% organic sales growth after it missed the target
for four straight years through 2016. The Swiss consumer giant on
Thursday reported sales growth of 2.6% for the first nine months of
the year. It said it was on track to post 2.6% growth for the full
year, too, compared with 3.2% last year.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
October 21, 2017 02:47 ET (06:47 GMT)
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