KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
Key Takeaway: Nestle aims to revive sluggish sales growth by increasing advertising and marketing efforts, even as it lowers its profitability target.
Nestle SA, under new CEO Laurent Freixe, has adjusted its profitability goals and announced a strategic overhaul of its water business to address stagnating sales.
Key Updates:
Profit Margin Target Adjusted
- Nestle now targets a trading operating margin of 17%, down from the previous 17.5% to 18.5% goal set by former CEO Mark Schneider.
- Sales are expected to grow 4% or more in the medium term, compared to Schneider's mid-single-digit prediction for 2025.
Water Business Restructure
- Starting Jan 1, 2025, Nestle’s water brands, including Maison Perrier and Acqua Panna, will operate as a standalone entity led by Muriel Lienau.
- This division represents less than 4% of Nestle's revenue and has faced challenges like contamination issues and supply constraints. Nestle will explore potential partnerships for this segment.
Increased Marketing Spend
- Nestle plans to significantly increase its advertising and marketing investments to bolster its brands and regain consumer trust after missteps, including a sales target cut in July.
Cost-Cutting Measures
- The company aims to save 2.5 billion Swiss francs by 2027, balancing its increased spending on marketing.
CEO Freixe’s Strategy:
Freixe, a 38-year Nestle veteran, took over in September following the ouster of Mark Schneider. His immediate priorities include:
- Reviving organic sales growth, which hit a historic low of 2% in 2024.
- Improving sales momentum in 2025 while managing a drop in profit margins.
Under Schneider, Nestle had relied on higher prices during the inflationary period, causing many customers to switch to cheaper alternatives. Freixe's focus on enhanced marketing is part of a broader effort to rebuild investor confidence and attract customers back to Nestle products.
Comments
Post a Comment