Nestle Net Profit Declines; Won't Renew L'Oreal Shareholder Pact

   By Anthony Shevlin 
 

Nestle SA (NESN.EB) said Thursday that an impairment charge pressured 2017 net profit lower and that it would keep its options open regarding its L'Oreal SA (OR.FR) stake.

The food and beverage company said net profit was 7.2 billion Swiss francs ($7.72 billion), compared with CHF8.53 billion a year earlier. An analyst consensus provided by Nestle had estimated net profit of CHF9.72 billion.

Net profit was hit by a charge mainly related to a goodwill impairment for its skin-health business. The company nevertheless proposed a dividend of CHF2.35, up 5 Swiss centimes.

Sales rose 0.4% to CHF89.8 billion and organic sales growth was 2.4%, it said. Analysts had expected sales of CHF90.02 billion and organic sales growth of 2.6%.

Nestle said it wouldn't renew a shareholders agreement for its 23.12% L'Oreal stake with the Bettencourt family, which holds a major stake in the French company, "in order to maintain all available options for the benefit of Nestle's shareholders." It said however that it remains committed to L'Oreal and has confidence in the company's management and strategy.

Nestle also said it is exploring a potential sale of its Gerber Life Insurance business.

Nestle expects 2018 organic sales growth of between 2% and 4% and expects restructuring costs of CHF700 million.

Write to Anthony Shevlin at [e-mail]

(END) Dow Jones Newswires

February 15, 2018 02:03 ET (07:03 GMT)

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