Nestle prepares to get rid of the bad brands in shake-up of its portfolio

The company’s chief executive Paul Bulcke told investors Nestle had drawn up lists of businesses that could be fixed and those that could not.

“Divestitures, we’re going to have some,” Mr Bulcke said. “We want to be in business, not in agony. The shortlists are there and now the action has to come.

“The timelines have to be wise, but action will come,” he told a presentation to investors, stressing that managing the portfolio was a top priority.

Without identifying specific brands, Mr Bulcke said some had been “sailing under the radar screen for too long without being part of the party”. Suggesting the process is already under way, sources told Reuters last week that Nestle’s PowerBar energy bars were up for sale.

Nestle’s performance in recent quarters has lagged some peers, in part because of the company’s mammoth size and multiple brands, from Gerber baby food to Perrier water to Nescafe coffee to name only a few.

The company posted 92.2 billion Swiss francs in annual sales last year and has 203.81 billion Swiss francs in market capitalisation.

Mr Bulcke said other priorities included structural efficiency and scaling back capital expenditure.

Moving ahead, Nestle’s capital expenditure should be around four per cent to five per cent of sales, he said, below 2012’s 5.8 per cent.

Nestle has confectionery sites in York and Halifax.