Analyst Jon Cox stated on Friday that investors might view Laurent Freixe, a corporate veteran, as Nestle’s CEO in place of Mark Schneider.
Head of consumer equities at Kepler Cheuvreux, Cox told CNBC he anticipates the move will be well received by investors after a period of underwhelming performance at the largest food company in the world.
“I believe there has been a significant loss of trust in the case, especially with Schneider,” he stated to “Squawk Box Europe. “He remarked, “I assume most people will think Schneider’s departure isn’t all that bad at this point.”
At 8:48 a.m. London time, Nestle’s stock was down 2.57%.
After eight years in charge, Schneider “has decided to relinquish his roles as CEO and member of the board of directors,” the Swiss company said in a statement on Thursday.
Joining Nestle in 1986, Freixe most recently held the positions of executive vice president and CEO of the company’s Latin American division. He will begin his new role on September 1.
At this point, Laurent is the ideal match for Nestlé. Through steady and long-term wealth generation, Nestlé will further solidify its reputation as a trustworthy business under his direction, according to Paul Bulcke, the chairman of the board of directors.
The action was taken in response to a string of disappointing profit results that have put pressure on Nestle’s share price.
Under pressure from inflation, consumers have moved away from labeled products, making it difficult for the corporation to hold onto market share.
Although Cox acknowledged that investor confidence had been weakened recently, she said the timing was “unfortunate” for Schneider. The speaker expressed that Schneider had made several strategic errors, such as failing to effectively incorporate certain add-ons related to consumer health.
Nestle has usually nominated business insiders to CEO positions, so Schneider’s appointment—she joined from the health-care industry in 2017—was viewed as an unusual decision.
In a note published on Friday, Bernstein analysts hypothesized that differences regarding Schneider’s operating style may have led to his replacement.
They added, “It is possible that this is where they found Mark falling short because of the chairman’s focus on the new CEO’s executional capability and his leadership style.”
Disagreements about Schneider’s operating approach may have led to his replacement, according to a note published by Bernstein analysts on Friday.
While some slight adjustments to the portfolio may be anticipated, Deutsche Bank stated that it anticipated the new CEO to be more focused on top line growth than mergers and acquisitions activity.
“We don’t see a big one-time margin reset at this time, and we expect the incoming CEO’s skill set to be more suited to Nestle’s needs,” the statement continued.
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