Nestlé has reported its slowest like-for-like sales growth for at least two decades in the first annual results at the Swiss producer of baby milk and KitKat chocolate bars published under new chief executive Mark Schneider.
Mr Schneider promised to this year step up restructuring at the world’s largest food and drinks company after it achieved organic growth of just 3.2 per cent in 2016. That was down from 4.2 per cent in 2015. Last October, Nestlé had predicted 3.5 per cent organic growth.
The pace of expansion was the slowest since at least 1996, according to comparable figures provided by the company. “Our 2016 organic growth was at the high end of the industry but at the lower end of our expectations,” Mr Schneider said.
He added: “In 2017, we expect organic growth between 2 per cent and 4 per cent. In order to drive future profitability, we plan to increase restructuring costs considerably in 2017. As a result, the trading operating profit margin in constant currency is expected to be stable.”
Mr Schneider, who was previously the boss of German healthcare group Fresenius, was appointed chief executive last June but only took charge at Vevey, Switzerland-based Nestlé at the start of this year.
Thursday’s reported slowdown in sales reported highlights the strategic challenges facing the new chief executive.