Nestle NSRGY reported full-year results for 2019, highlighted by a 3.5% organic growth and a 1.2% sales increase. Nestle CEO Mark Schneider was a guest on "Bloomberg Markets: European Open" to talk about the company's performance and his outlook for 2020 and beyond.
'Super Pleased'
Nestle is "super pleased" with its organic growth as it matched management's guidance and is expected to continue growing in 2020 and beyond, Schneider said. In fact, growth can accelerate above 3.5% but in a year or two and ultimately achieve a 4% to 6% goal.
Coronavirus And China
Nestle has more than 30 factories in China and the "large majority" are now operating as normal, he said. Food and nutritional products are "essential" to the people and the company will do its best to operate in a difficult and constrained environment.
The exact financial impact on Nestle can't be determined at this time, especially since the disruption started during the "low" period coinciding with the Chinese New Year, he said.
Aside from the virus, Nestle is doing "really well" in premium categories in China, the CEO said. The Chinese consumer is in good financial shape to enjoy higher-end items.
L'Oreal
Nestle owns a 23% stake in L'Oreal and the luxury segment has seen some difficulties in Asia. Schneider said he sees no reason to divest its stake and Nestle doesn't "day trade" with L'Oreal's stock. In fact, he said Nestle remains "very, very happy shareholder" after a four-decade-long relationship.
Only "if needed" would Nestle tap into its stake in L'Oreal, perhaps to help finance an acquisition, he said.
Plant-Based Food
Nestle doesn't see itself falling behind in the food business at a time when food delivery apps continue to grow and give consumers better access to food. The CEO said its grocery exposure is a strong business but it has plans to make it even strong through plant-based and meat-alternative food products. These new and emerging food items will be counted on "re-energizing and re-defining" the multi-billion dollar industry.
Related Links
Nestle CEO Discusses Sustainability Program
Food Giant Nestle Invests $2B In Ambitious Green Goal
Photo by inma · lesielle on Unsplash
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.