NESTLÉ MAY REDUCE PORTFOLIO ON BEHALF OF DECELERATION

After four quarters of weaker sales, the solution may be the sale of some of its 8 thousand marks after weaker quarterly growth of the last four years, Nestle, owner of 8 thousand sea-cas, wants to identify the latecomers to its portfolio. Its annual growth target is to expand en-tre 5% and 6% of sales.
The challenging scenario is composed-to by slowing emerging markets, weakness in Europe and for eco-shy performances of waters, frozen dishes and dietary options. This loss of breath increases the urgency to attack low-performance areas. Unilever, which competes with Nestle in products such as soups and creams, grossed more than $ 1 billion by selling assets this year to focus on faster-growing segments, as xam-pus and deodorants.
"We're talking about making a surgery, not an amputation," said Thomas Russo, Nestlé investor since 1987. "They allocated capital to companies with prospects for high return. Which leads me to think that the capital-starved businesses would be under potentiality of sale. And I support it. "
Nestlé introduced an unusual dilemma for his investors, who for much of the last decade have parlayed the gains of a model based on price-to-earnings ratio. Now, shares are traded at a discount. "The air of invincibility and reliability the company was corroded," he pointed out Andrew Wood, an analyst at Sanford c. Bernstein.
Giving up a large in-prey food would be a starting point for Nestlé. Unilever, just this year, sold the Skippy peanut butter for $ 700 million, in addition to the brand of Wish-Bone salad dressings by another $ 580 million. Its strategy consists of giving up companies with sales concentrated in Europe.
Meanwhile, Nestlé has similar assets in the United States, as the Jenny Craig diet products, frozen Lean Cuisine, cereal bars PowerBar and some brands of bottled water.
Called "cell methodology", Nestlé follows nearly a thousand business units dis-paints in 194 countries in which it operates. The process helps to identify which points should receive more or less investment. "Or you put the units in acceptable conditions with the application of cro-plan has been realised or you waive them," explains Wan Ling Martello, Chief Financial Officer of Nestle.
Frozen us, the perception growing among consumers is that these Americans res meals are less healthy than fresh dishes. Second Oberhuber, the PowerBar can pay this account. With the sale of the brand, Nestlé would increase the chances of returning to a more active level.
The bottled water business represent 80% of the revenues of $ 7.7 billion in Es-results us and Europe, with an operating profit margin that is half of other units of Nestlé. Are 65 brands, including Perrier and San Pellegrino, with Pure Life being the largest label in the world. "It is possible that they put the focus on Pure Life and give up u.s. regional brands like Arrowhead and Deer Park" evaluated James Targett, Ms Berenberg Bank analyst.
The dilemma of Switzerland is clear: with the current portfolio, you can Nestle show same traits of nation when bet on bad-Nespresso machine, which only gave cer-to 15 years after, or is it the right time to separate some operations for the better health of business?