On Thursday, Nestlé released its latest results, with the group’s shares dropping 2.1% in response. Total sales for the period came in at 89.8b Swiss francs, or $96.9b, 0.4% higher than that reported previously and in-line with estimates. However, organic growth, which excludes the effects of currency changes, acquisitions and divestments, stood at 2.4% during 2017. This was slightly lower than expectations of a 2.6% increase and was also down from the 3.2% recorded previously. Overall, net profit for the period declined by 16% to 7.2b Swiss francs, or $7.76b, much lower than estimates of 9.63b Swiss francs. This poor performance was partly due to a goodwill impairment in its skin health unit.
Nestle shed 1.42% on Wednesday to settle at 83.20 Swiss franc’s in what turned out to be a busy day for the company. Firstly, according to new reports, Nestle is set to choose a buyer for its US chocolate business by the end of the week. As it stands, Italy’s Ferrero is the favorite for the deal, mainly due to its improved offer which is believed to be in the region of $2.5bn. Secondly, reports also surfaced which indicate Nestle may be the front-runner for Merck’s consumer health unit. Nestle has apparently submitted the highest offer, and Merck will make a final decision during the first quarter of 2018.
On Monday, Nestle announced it would be acquiring Atrium Innovations for an amount of $2.3bn. Atrium Innovations is a maker of vitamins, probiotics and meal replacements and currently sources 80% of its $700mn in sales from the United States. From Nestle’s side, the deal aims to expand the group’s presence in consumer healthcare as well as offset weakness in packaged foods. The acquisition is in-line with Nestle’s ambition of becoming a nutrition, health and wellness company. Given Nestle’s decision to make consumer health a strategic priority, this marks the group’s fourth purchase in recent months.