By Elias Hazou
Copyright cyprus-mail
Nestle investors and analysts view the early departure of the Swiss company’s chairman, Paul Bulcke, as a chance for fresh leadership to accelerate growth and address lagging units and weak sales.
The company announced late on Tuesday that Bulcke would hand over the role six months earlier than planned to Pablo Isla, the former Inditex CEO. The move follows the recent dismissal of CEO Laurent Freixe over an undisclosed relationship.
The abrupt exit of two of Nestle’s longest-serving executives has sparked speculation of a broader shake-up at the world’s largest consumer goods maker, whose shares have fallen more than 40 per cent since peaking in 2022, with a challenging consumer environment weighing on performance.
Investors are pushing for faster sales growth, improved efficiency, cost-cutting measures, and increased investment in flagship brands, including Nescafé coffee and Purina pet food.
Nestle’s shares opened slightly higher on Wednesday before giving up those gains and edging lower.
“Nestle needs to return to calmer waters and regain its former stature,” said Jean-Philippe Bertschy, analyst at Bank Vontobel, citing years of weak growth, leadership missteps, governance concerns and turbulence at the top. “This also creates an opportunity to accelerate growth and tackle underperforming units more effectively. Further change is likely; the organisation is poised for a significant shake-up.”
The overhaul is the most dramatic management reshuffle in decades for the Swiss food giant, which counts KitKat and Nespresso among its household brands.
Bulcke’s early departure, following Freixe’s exit, clears the way for new CEO Philipp Navratil and incoming chairman Isla to take full control and implement their strategy.
Analysts said investor pressure for leadership renewal had been building, with Freixe’s dismissal raising expectations for a complete reset.
Nestle said Isla and Navratil remain committed to driving organic growth while “leveraging efficiencies” to reinvest in its portfolio and brands.
Jon Cox, analyst at Kepler Cheuvreux, said he expects a closer review of Nestle’s business portfolio. “The strategy is likely to be the same in terms of freeing up savings to drive growth through investment in innovation, new products and advertising,” he said, noting the company could act more aggressively to cut costs and divest lagging businesses such as its frozen food operations in North America.
“I would not be surprised to see more businesses being put under review,” Cox added.
