Nestlé chief executive Mark Schneider has reiterated the company’s willingness to focus more on brand building than cost cutting, in an address to shareholders at the firm’s 151st Annual General Meeting.
Schneider said that Nestlé is “clearly focused on the long-term”, describing this long-term thinking as a ‘state of mind rather than a time scale.
“This long-term focus is anchored in the belief that we should constantly anticipate, adapt and invest to prepare for the future, as others have done successfully before us.”
Generate Growth
As the former Frenesius chief executive has stated on numerous occasions in the past, he believes that “Nestlé’s ability to generate growth” should remain a key element of the company’s future strategy, rather than focus on ways to make savings.
“Reducing costs is a way to improve margins,” he told the AGM. “But, most importantly, it is also a way of having the means to invest in innovation and brand development. Sooner or later, companies that focus primarily on radical cost-cutting, driven by short- term profit maximisation, show signs of fatigue and weakness.
“At Nestlé, we stress the central role of innovation and growth in creating value. We will not compromise on this.”
Schneider did outline, however, plans to reduce “structural costs” in areas such as production, procurement and general administration, with the company saving CHF 500 million last year, and planning to deliver total savings of CHF 2 billion to CHF 2.5 billion by 2020.
New Board Members
At the AGM, which was attended by 1,988 shareholders, representing 54.6% of the capital and 78.2% of the shares entitled to vote, a proposed dividend of CHF 2.35 per share was approved, as were a number of new additions to the company’s Board of Directors.
Shareholders elected Pablo Isla, CEO of Inditex; Kasper Rorsted, CEO of adidas; and Kimberly A. Ross, former CFO of Baker Hughes, as new members of the Board. Three directors, Andreas Koopmann, Steven G. Hoch, and Naïna Lal Kidwai, did not stand for re-election as they have reached the term limit.
"Nestlé's long-term orientation comes from the belief that we must constantly anticipate, adapt and invest to prepare for the future,” Nestlé chairman Paul Bulcke added.
“It is through permanent innovation and by investing for the future that our company will continue to develop in a sustainable and profitable way."
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
