Nestlé plans to distribute up to CHF 20 billion ($20.1 billion) to shareholders from 2020 to 2022 and has announced changes to its waters unit.
The world’s largest food and beverage maker will start a share buyback programme in January 2020 and may consider distributing part of the total amount as one or more special dividends.
Should any sizable acquisitions take place, the amount of cash to be distributed to shareholders will be adjusted accordingly.
The company has also reveaeld plans to integrate its Nestlé Waters business into the group’s three geographical zones, effective January 2020.
Nestlé said the move will allow for better responses to rapidly changing consumer preferences, accelerate profitable growth and create synergies.
The bottled water division was created in 1992 following Nestlé’s acquisition of Source Perrier. The unit owns brands such as Poland Spring, Deer Park and S.Pellegrino.
The announcements have been made the same day as Nestlé released its nine-month results. Sales stood at CHF 68.37 billion ($68.84 billion) and were up 3.7% on an organic basis compared to the year-ago period.
Year-on-year growth acceleration was supported by both the US and Brazil while all product categories saw positive growth, led by Purina PetCare and coffee. The newly launched Starbucks products saw strong demand with further expansion into new countries.
Within Nestlé Waters, organic growth was 0.5% for the nine-month period. In the third quarter, growth slowed due to high pricing comparables in North America and a disappointing summer season in Europe.
“We are pleased with our nine-month results and have made further progress towards our 2020 financial goals,” said Nestlé CEO Mark Schneider. “We continue to see good momentum in our largest market, the United States, and very strong growth for Purina PetCare globally.
“Nestlé’s growth was supported by investment behind our brands, rapid innovation and disciplined execution. During the third quarter, the roll-out of Starbucks products continued, now reaching 34 countries. Our portfolio transformation is fully on track, as shown by the timely completion of the Nestlé Skin Health disposal.
“With prudent investments and a disciplined approach to acquisitions, our value creation model is generating profitable growth and attractive cash returns for our shareholders.”
© FoodBev Media Ltd 2020