KitKat maker Nestle has revealed plans to slash costs by at least another 2.5 billion Swiss francs (£2.2 billion) and spin off its premium water and drink business as part of a turnaround being led by its new boss.
Recently-appointed chief executive Laurent Freixe said the Swiss group will make the mammoth savings by the end of 2027 – on top of an ongoing existing programme to trim costs by 1.2 billion Swiss francs (£1.1 billion).
It said “work has already begun on key initiatives across procurement, commercial investments and structural costs” as it looks to ramp up cost-cutting.
Mr Freixe said the group will instead channel spending into advertising and marketing, with investment in those areas being increased by up to 9% of sales by the end of 2025.
Nestle added that its water and premium drinks arm will become a separate global standalone business as of January 1 next year and its new management team will “evaluate the strategy for this business”, including possible partnership deals.
The firm – which makes a raft of well-known household brands also including Nescafe coffee and Cheerios – maintained recently lowered sales guidance for 2024, but cut its profitability outlook for 2025, saying it was set to be “moderately lower” than the expected result for this year.
The consumer goods giant had already trimmed its sales outlook in July and October after weaker-than-expected sales.
Mr Freixe said: “We will now invest further in our brands and growth platforms to unlock the full potential of our products for our consumers and our customers.
“Our action plan will also improve the way we operate, making us more efficient, responsive and agile.
“This will allow us to deliver value for all our stakeholders.
“I am confident that we can deliver superior, sustainable and profitable growth and gain market share, while transforming Nestle for long-term success.”
