Food for thought

15 February 2018 By Carol Ryan

Lacklustre 2017 sales have focused investors on issues the Swiss group would rather avoid. Not renewing a shareholder agreement with L’Oréal suggests a rethink of its stake is underway. But the future of sugary brands and a push into health supplements need clearer explanation.

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Nestlé said on Feb. 15 that it does not plan to renew a shareholder agreement with L'Oréal’s founding Bettencourt family when it expires on March 21, “in order to maintain all available options for the benefit of Nestlé’s shareholders.” The Swiss food company currently owns a 23 percent stake in the French cosmetics group.

Nestlé is also exploring strategic options for Gerber Life Insurance, a business it acquired as part of its 2007 acquisition of Gerber from Novartis. Gerber Life Insurance generated 1 percent of Nestlé group revenue in 2017.

Full-year organic revenue growth of 2.4 percent was below analyst expectations of 2.7 percent.

Nestlé shares were down 2.2 percent at 75.7 Swiss francs by 0843 GMT on Feb. 15. L’Oreal’s shares were down 0.3 percent at 174.7 euros.

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