CEO Mark Schneider is stepping down as CEO after around eight years and is leaving the Swiss company, Nestle announced on Thursday after the stock market closed. Laurent Freixe will take over the leadership of the manufacturer of Nespresso, Maggi, KitKat and Perrier on September 1. Freixe, who currently heads the Latin American business, is also set to be elected to the Nestle Board of Directors in 2025.
“He has proven that he is able to deliver results in difficult market conditions,” said Chairman of the Board Paul Bulcke in the statement. Nestle lowered its outlook at the end of July and now expects organic sales growth of at least three percent (previously four percent) for the full year 2024. This announcement pushed the share price down by a further five percent. From a high of over 127 francs, the share has now fallen to under 90 francs. Many investors invest in Nestle because they hope for small price fluctuations.
In the management position since 2017
Schneider took over as CEO at Nestle in January 2017. The former head of the medical technology group Fresenius restructured the food manufacturer by selling weaker areas and buying up stronger growth ones. While Nestle weathered the Corona crisis well, inflation increasingly affected the group. “Mark has made a significant contribution to the great progress in our sustainability efforts,” explained Bulcke.
Like other consumer goods manufacturers, the company from Vevey on Lake Geneva increased prices in order to pass on the additional costs of raw materials to consumers. After almost three years of price increases that drove up the cost of living worldwide, Nestle took its foot off the gas because consumers were increasingly turning to cheaper products. Consumers have become more price-sensitive and competition between retailers is becoming increasingly intense, explained Schneider when publishing the half-year figures.
A homegrown talent takes over
In this phase, Nestle is now relying on the veteran Freixe. Unlike Schneider, the Frenchman is a homegrown talent. He also has decades of experience in the food industry. Freixe joined Nestle in 1986 and has been part of the Group Executive Board for the past 16 years. His responsibilities included the European business. He has led several global projects with the aim of increasing productivity and efficiency, simplifying processes and driving innovation. “Laurent is exactly the manager that Nestlé needs now,” explained Bulcke. “With him, Nestlé will further expand its position as a reliable company with consistent and sustainable value creation.”
Freixe explained that he wanted to focus on expanding market share. “That is the definition of success in the market.” Nestle will concentrate on the existing portfolio of products and brands; there are no plans for restructuring. Freixe wants to continue to drive the digitalization of the company.
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