Nestlé said it would overhaul its struggling bottled-water arm, hoping to reinvigorate growth in a business grappling with rising competition, high costs and growing concerns about single-use plastic.
--- Its water arm will go from being a stand-alone to one managed locally in Nestlé's various regions.
--- Nestlé Waters employs 28,000 people. A spokesman declined to comment on whether there would be job losses.
--- In the water business, revenue was flat over the nine months, while volumes dropped 2.2%.
--- The head of Nestlé Waters, Maurizio Patarnello, will leave the company by the end of the year.
--- The change mimics a restructuring in the infant nutrition arm where the company says results have improved.
--- Sales in the nine months ended Sept. 30 were 68.37bn Swiss francs, up from 66.42bn francs year-on-year.
Why This Matters
Water is a "problem category" for Nestlé, said Jefferies analyst Martin Deboo earlier this month, saying the business is losing share to rivals in the US, its biggest market. The company backed its 2019 estimates and said it would return 20bn francs to investors over the next few years, primarily through share buybacks. It didn't release profit figures.
Since taking over in 2017, CEO Mark Schneider has tried to focus energies on a handful of core businesses he views as high-growth. Water is one of these, along with nutrition, pet food and coffee.Meanwhile, the company has faced scrutiny from activist investor Daniel Loeb to improve its financial performance and sell its stake in L'Oréal.
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