Nestlé abandons long-term targets after weak fiscal year | Progresiv
Nestlé has dropped its long-term sales forecast, even as it said it will look to introduce new cost cuts, after reporting a weak set of results for its last fiscal year. 
In 2016, the group saw net profit drop by 6.6% to 8.5bn Swiss francs, while sales edged up 0.8% to 89.5bn francs (+3.2% organic basis). The results were affected by weakness in Developed markets, where sales grew by 1.7% on an organic basis to 52.1bn francs, while Emerging Markets recorded a modest 5.3% rise to 37.4bn francs.
New CEO Ulf Mark Schneider noted: “Our 2016 organic growth was at the high end of the industry, but at the lower end of our expectations.”
Nestlé said it is now aimed to grow sales by 2%-4% in 2017, moving away from its previous 5%-6% long-term target, which it has missed four years in a row. The group is now aiming for “mid-single-digit organic growth” by 2020.
Schneider explained the move by noting: “This is a volatile and still somewhat deflationary environment. We felt this was wise and prudent.” He added that the group will use cost-cutting and portfolio management to meet its new targets. (www.kamcity.com)
