Nestle : chairman defends long-term strategy in face of shareholder activist
January 25, 2019 at 07:31 am EST
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DAVOS, Switzerland (Reuters) - Nestle SA chairman Paul Bulcke said on Friday he would not pursue short-term efforts at the expense of long-term success, in the face of scrutiny from shareholder activists who know how to "pressure-point you and tease."
Hedge fund Third Point LLC, run by shareholder activist Daniel Loeb, took a $3 billion stake in Nestle in 2017, and has said that the maker of KitKat bars and Perrier water could double its earnings per share by 2022 if it splits up its businesses.
"If the capacity of delivering is there, we should. If it jeopardizes my future thinking, and if it compromises my future success, we should not do this," Bulcke said at the World Economic Forum in Davos.
"It's my job to explain that, to go around, talk to investors and listen to all of them, also him."
Bulcke did not mention Loeb by name on the panel on corporate agility on the final day of the week-long conference in a Swiss ski resort town. A Swiss journalist had asked Bulcke how he deals with answering to a New York hedge fund demanding earnings growth.
"He’s one investor, we have many others," said Bulcke, who served as the CEO of Nestle from 2008 to 2016.
(Reporting by Jessica DiNapoli; Editing by Mark Trevelyan)
Nestlé S.A. is the world's leading agri-food group. Net sales break down by category of products as follows:
- powdered and liquid beverages (26.7%): soluble coffees (Nescafé and Starbucks brands), coffee in capsules (Nespresso), chocolate drinks (Nesquik, Milo, etc.), tea drinks (Nestea), etc.;
- pet food (20.3%): brands such as Purina, Friskies, Felix, etc.;
- pharmaceutical, nutrition and well-being products (16.4%): nutritional supplements (Resource, Boost, Nutren, Optifast, Peptamen brands, etc.), infant and maternal nutrition products (NAN, illuma, Cerelac, Nido, Gerber), ketogenic beverages (BrainXpert), (Nesquick, Fitness, Cheerios, Lion, etc.), etc.;
- ready meals and seasoning products (12.5%): frozen and chilled dishes (Lean Cuisine, Hot Pockets and Stouffer's brands), soups (Maggi), etc.;
- dairy products and ice cream (11.8%): powdered milk, sweetened condensed milk, yoghurt and cream desserts, ice cream (Nido, Nesvita, Carnation, La Laitière, Coffee Mate, Nestlé Ice Cream, Dreyers, Häagen-Dazs, Extrême brands, etc.);
- chocolates, sweets and biscuits (8.7%): Kit Kat, Smarties, Cailler, Terrafertil, etc. brands;
- bottled waters (3.6%): Nestlé Pure Life, Vittel, Perrier, S. Pellegrino, etc. brands.
Net sales are distributed geographically as follows: Switzerland (1.2%), France (3.8%), the United Kingdom (3.8%), Germany (2.4%), Europe (12.8%), the United States and Canada (35%), China (5.9%), Asia and Oceania (21.4%) and Latin America (13.7%).
NESTLÉ S.A. 
