Nestle to focus capital spending on high-growth food and beverage categories

Swiss firm Nestlé has revealed that capital spending will be focused on advancing high-growth food and beverage categories, as well as expanding its presence in high-growth geographic markets.

The food and beverage categories include coffee, petcare, infant nutrition and bottled water.

This follows after the company initiated a comprehensive review of its capital structure and priorities to advance the implementation of its value creation model, which is based on the profitable growth, margin improvement and capital efficiency.

The company also intends to explore new growth opportunities in the consumer healthcare sector and employ a more disciplined approach to acquisitions.

Nestlé recently revealed that it would explore new strategic options for its confectionery business in the US, which is in line with its growth objectives.

Using targeted efficiency programmes, the company will be evaluating new opportunities for margin improvements and ensure that these programmes do not affect the company's performance in long-term growth categories. 

In order to generate high-cash inflows and low-interest rates, the company is considering the option of share buybacks offer to create shareholder value.

The company’s board of directors has approved the buyback programme of up to Sfr20bn ($20.8bn), which is to be completed by the end of June 2020.

The programme is scheduled to start on 4 July.