Thursday, June 20, 2019
Home Business Nestlé, ready to sell the Herta charcuterie in decline

Nestlé, ready to sell the Herta charcuterie in decline

Under pressure from the American activist fund Third Point, the management continues to reshape the agri-food group.

By Laurence Girard Posted today at 11:36

Time to Reading 3 min.

Subscribers article

Nestlé, in Vers-chez-les-Blanc, Switzerland, in 2014.
Nestlé, in Vers-chez-les-Blanc, Switzerland, in 2014. FABRICE COFFRINI / AFP

Nestlé just put a new ad online, Thursday, February 14th. On Valentine's Day, the world's leading agri-food company announces that it is ready to part with the Herta charcuterie. A flagship brand in France, known for its industrial charcuterie, but also its pasta pie and, recently, its vegetarian range.

The rumor was recurrent. In any case, since the group of Vevey has started a grooming of its activities. A strategy spearheaded by the American activist fund Third Point. The fund, led by Daniel Loeb, made a big splash into the Swiss giant's capital in June 2017 and claims to own 1.3% of the shares.

In a statement, Nestle says "Explore strategic options for Herta's charcuterie business, including a possible divestiture". The scope covers France, Germany, Belgium, Luxembourg, the United Kingdom and Ireland. That is a group that weighed 680 million Swiss francs (598 million euros) in 2018. In France, this business employs 1,800 people and includes two factories. One in Saint-Pol-sur-Ternoise in Pas-de-Calais has 1,000 employees; the other, at Illkirch-Graffenstaden (Bas-Rhin), 350.

Accelerated development

The group would continue to market in France under the Herta brand, pasta pie and the vegetarian range known under the label Le Bon Végétal. Products that are not manufactured in France but in Switzerland for pasta and in the Czech Republic for the vegetarian range.

Nestle sees this operation as "A further step in the evolution of its portfolio towards attractive high-growth categories". Exit the activities that slow down the engine of the group. However, in France, since the broadcast of programs criticizing the composition of ham, and the publication of studies highlighting the health risks of excessive consumption of cooked meats, the French have reduced their purchases. This trend particularly affects ham, which has been hitherto popular with households. A market that weighs 1.5 billion euros, but a fund of 2% per year.

Ulf Mark Schneider, who was appointed head of Nestlé two years ago, has made accelerating development one of his priorities. Especially since in 2017, the group posted its weakest organic growth in twenty years, at 2.4%. For 2018, it amounts to 3%, for a turnover of 91.4 billion Swiss francs according to data released Thursday. The operating margin also increased to 15.1%. Net profit jumped 41.6% to 10.1 billion Swiss francs. Inflated by the proceeds of the disposals.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Must Read

"a huge mistake", for Donald Trump

Iran shot down an American drone it thought was in its airspace, provoking a strong reaction from the US president....

Benalla case: "We have certainly played down," admits Brigitte Macron

Brigitte Macron acknowledged that the presidential couple did not take sufficient account of the Benalla affair. "Personally, I was surprised at the extent it...

Rabiot and Juventus Turin, it's hot

For Adrien Rabiot, penance will soon end. The team's first loss since this winter, his contract with the club will end on June 30....

Annecy, it's over, but the winners are picked up in Lyon and Paris

Before a possible winter edition of the Annecy Festival resuming a selection of films from the official selection with novelties at the end of...