The Swiss food giant Nestlé reported on Thursday a lower profit in 2017 due to write-offs in its skin care business and weak organic growth.
Nestlé concluded 2017 with a 15.8 percent lower net profit, amounting to 7.2 billion Swiss francs (6.2 billion euros).
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– The main reason is the write-off of intangible assets related to Nestlé Skin Health, which was carried out to reflect the current outlook for that part of the business, the statement said.
Revenues stagnated at 89.8 billion francs. Adjusted for currency fluctuations and acquisitions or asset sales, they increased by 2.4 percent.
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– Organic growth … was at the lower end of the expected range, concluded CEO Ulf Mark Schneider, who took office in January 2017.
Shareholder pressure
This year, Nestlé expects organic growth between two and four percent.
The management is under pressure from shareholders, the American hedge fund Third Point, to sell its 23 percent stake in L’Oréal. They have abandoned the extension of the shareholder agreement with the Bettencourt family, shareholders of L’Oréal, under which neither party may increase its stake, simultaneously signaling that they do not intend to increase their stake.
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– In order to keep all available options in favor of Nestlé’s shareholders, the board of directors decided not to renew that agreement. We do not intend to increase our stake in L’Oréal and wish to maintain our constructive relationship with the Bettencourt family, the statement said.
