Nestle Plans Major Restructuring and Cost Cuts

Nestle is implementing significant changes under new CEO Laurent Freixe, including plans to cut costs by at least 2.5 billion Swiss francs ($2.83 billion) by 2027 and to spin off its water and premium drinks business into a standalone global unit by January 1, 2025. The company will increase its advertising and marketing investment to 9% of total sales by 2025, up from 7.7% in 2023, as part of its strategy to drive growth amid a challenging market environment. Nestle projects medium-term organic sales growth of over 4% and a trading operating profit margin of 17%. However, it has lowered its profitability target compared to previous forecasts set by former CEO Mark Schneider. These changes come as Nestle adapts to a slow growth period, with ongoing initiatives expected to lead to substantial cost savings. The new management will assess potential strategies for the water and premium drinks business, including possible partnerships.