Post by : Saif Rahman

Nestle clarified in an interview with Swiss newspaper Finanz und Wirtschaft that its investment in cosmetics leader L’Oreal is strictly financial. CEO Philipp Navratil emphasized that no new changes are anticipated regarding the holding.

“For us, this stake represents a financial investment,” Navratil noted. “We periodically review it with our board of directors, but currently, there’s no new information to disclose.” The interest surrounding Nestle’s stake has been significant, yet the company insists it is not included in any operational strategies.

Taking the helm in September amid internal challenges, Navratil outlined Nestle’s objective of achieving 4% organic growth swiftly. He pointed to the robust growth potential in pet food and coffee, labeling them as “incredible opportunities” for future success.

Navratil also highlighted the company's ongoing assessment of its water segment and its vitamins and nutritional supplements business, both under consideration for strategic partnerships or divestitures. He mentioned that this process is intricate but aims for a timely and careful conclusion.

“These divestiture plans will contribute to lowering Nestle’s debt,” Navratil remarked. Additionally, there is a review underway of the balance sheet to strengthen financial stability. The aim is to redirect cash flow towards achieving 10 billion Swiss francs, he stated.

Nestle’s inclination towards innovation over acquisition indicates a strategic shift towards organic growth rather than relying on extensive purchases. According to Navratil, creating new products and enhancing high-growth segments like coffee and pet food are pivotal.

By holding a financial stake in L’Oreal while focusing on its principal operations, Nestle aspires to harmonize financial returns with sustainable business growth. The company is dedicated to strategic measures that bolster its financial standing while capitalizing on prominent consumer market opportunities.

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