Nestle closer to getting rid of bad brands - CEO


By Martinne Geller

LONDON, Oct 1 (Reuters) - Nestle hinted on Tuesdayit was getting closer to disposing of bad brands and shaking upits portfolio to deal with businesses that have underperformedfor too long.

The company's chief executive Paul Bulcke told investorsNestle had drawn up lists of businesses that could be fixed andthose that could not.

"Divestitures, we're going to have some," Bulcke said. "Wewant to be in business, not in agony."

"The shortlists are there and now the action has to come.The timelines have to be wise, but action will come," he told apresentation to investors, stressing that managing the portfoliowas a top priority.

Without identifying specific brands, Bulcke said some hadbeen "sailing under the radar screen for too long without beingpart of the party."

Suggesting the process is already under way, sources toldReuters last week that Nestle's PowerBar energy bars were up forsale.

Nestle's performance in recent quarters has lagged somepeers, in part because of the company's mammoth size andmultiple brands, from Gerber baby food to Perrier water toNescafe coffee to name only a few. The company posted 92.2billion Swiss francs in annual sales last year and has 203.81billion Swiss francs ($225.16 billion) in market capitalization.

Bulcke said other priorities included structural efficiencyand scaling back capital expenditure. Moving ahead, Nestle'scapital expenditure should be around 4 percent to 5 percent ofsales, he said, below 2012's 5.8 percent.

After consumer goods rival Unilever warned onMonday of a sharper slowdown in its emerging markets, Bulckeacknowledged that sales in the region were slower than before,but added that growth was more stable than before. A degree ofslowdown was healthy, he said, given that the double-digit ratesin some markets, like China, was unsustainable.

Bulcke declined to comment on Nestle's plans regarding itsclosely-watched 30 percent stake in L'Oreal beyondrepeating that all options were on the table. Restrictions onselling the stake expire in April.

Nestle shares were down 0.6 percent at 62.85 euros at 1122GMT.

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