![https://img.particlenews.com/image.php?url=3BePXK_0v7TwIrd00](https://img.particlenews.com/image.php?type=thumbnail_580x000&url=3BePXK_0v7TwIrd00)
![https://img.particlenews.com/image.php?url=1u5aLR_0v7TwIrd00](https://img.particlenews.com/image.php?type=thumbnail_580x000&url=1u5aLR_0v7TwIrd00)
![https://img.particlenews.com/image.php?url=0ud6Af_0v7TwIrd00](https://img.particlenews.com/image.php?type=thumbnail_580x000&url=0ud6Af_0v7TwIrd00)
By John Revill
ZURICH (Reuters) -Nestle shares tumbled early on Friday following the abrupt departure of CEO Mark Schneider from the world's biggest foodmaker and his replacement by company veteran Laurent Freixe.
Schneider's surprise exit was announced late on Thursday following a board meeting that put an end to the near eight-year tenure of the 58-year-old German, the first company outsider to lead Nestle in nearly a century.
Investors, whose confidence in Schneider had waned over the last 15 months, were rattled, with shares in the maker of KitKat chocolate bars and Nescafe instant coffee falling by nearly 4% after trading started.
Freixe, a 62-year-old Frenchman with deep roots at Nestle, has already started work in his new role, faced with the task of rebuilding market share and increasing sales volumes in a tough market.
Nestle has trailed rivals like Danone and Unilever in recent quarters and the new CEO immediately pledged to focus Nestle on organic growth rather than acquisitions.
"We want to gain market share, and that comes back to investing in our brands. That comes back to investing in our growth platforms," Freixe told analysts on Friday.
"The focus will be on driving the current portfolio. Primarily organic growth is of the essence. On the portfolio there might be of course adjustment, but again top priority is absolutely organic growth."
Critics argue Nestle has been too reliant on price increases, which have hit sales volumes as cash-strapped customers turned to cheaper brands.
A popular figure at Nestle's HQ in Vevey, next to Lake Geneva, Freixe is used to challenging times, having led Nestle's European business in the wake of the global financial crisis before heading the business in the Americas.
Most recently he has been head of Nestle's Latin America zone, which has seen strong growth on his watch.
"With Laurent Freixe in charge, the priority for Nestle will be to go back to its roots, its fundamentals. He's a sales and marketing guy with a real passion for the products," said Jean-Philippe Bertschy, an analyst at Bank Vontobel.
"If you look at successful food companies lately, like Lindt and Danone among others, they all have marketing and sales people as CEO."
'SUPERTANKER'
Restoring sales growth will be vital to winning the trust of investors, Bertschy said.
After hitting an all-time high in January 2022 as Nestle enjoyed a pandemic-driven boom, the company's shares have been on a downward slide since May 2023 after a series of mishaps, earnings misses and guidance downgrades.
Schneider had drawn praise for attempting to shake up the firm, selling its U.S. confectionery unit to Ferrero for $2.8 billion in 2018 and, three years later, several North American water brands to two private equity firms for $4.3 billion.
But Nestle also paid $2 billion to take complete ownership of a maker of treatments for peanut allergies, only to sell the business three years on for what analysts said was a big loss.
Likening the firm to a "supertanker", Swiss newspaper Neue Zuercher Zeitung said Nestle's weight in the local stock market made it crucial for many pension funds, meaning pressure from investors to perform was high.
The NZZ also noted that executives eager to lift sales in the U.S. were unlikely to take comfort from political moves to contain prices, pointing to Democratic presidential candidate Kamala Harris's plan to tackle price gouging.
"Freixe will be measured primarily by one thing: whether the share price recovers in the long term," the paper said.
(Reporting by John Revill; Additional reporting by Dave Graham; Editing by Jan Harvey)
Comments / 0