Nestlé outlines future value creation model including strategic growth priorities and supporting capital structure

Vevey, 27 June 2017

Nestlé outlines future value creation model including strategic growth priorities and supporting capital structure

Company advancing value creation model based on profitable growth, margin improvement and capital efficiency

Nestlé today announced another step forward in the implementation of its comprehensive value creation model. Early in 2017, the company's management, together with the Nestlé Board of Directors, initiated a comprehensive review of the company's capital structure and priorities to support and enhance its ability to deliver on its value creation model. Nestlé regularly revisits its capital structure to reflect changing market conditions and strategic priorities. Nestlé's financial strategy aims at striking the right balance between growth in earnings per share, competitive shareholder returns, flexibility for external growth and access to financial markets.

As a result of this review, Nestlé determined that capital spending will be focused particularly on advancing high-growth food and beverage categories such as coffee, petcare, infant nutrition and bottled water, as well as expanding its presence in high-growth geographic markets. In line with the company's nutrition, health and wellness strategy, it will also pursue growth opportunities in consumer healthcare. Consistent with a disciplined approach to acquisitions, Nestlé will only prioritize external growth opportunities that fit within targeted categories and geographies, deliver attractive returns, and build on the company's leadership position in fast growing food and beverage categories.

Nestlé's recent announcement that it would explore strategic options for its US confectionery business is consistent with this overall approach. The company will continue to adjust its portfolio in line with its strategy and growth objectives.

Nestlé will also continue to assess opportunities for margin improvement through targeted efficiency programs that do not undermine the company's performance in attractive long-term growth categories.