By Michael Susin


Nestle cut its 2025 profitability target and said it would step up advertising and marketing investment as part of Chief Executive Laurent Freixe's plan to revive sales growth at the Swiss food giant.

The maker of KitKat chocolate bars and Nescafe coffee said Tuesday that it would target measures to deliver 2.5 billion Swiss francs ($2.83 billion) in additional cost savings by the end of 2027 to help fund higher investment.

Investment in advertising and marketing is expected to amount to 9% of sales by the end of next year, Nestle said.

The company said that, as a result, it expected an underlying trading operating profit margin for 2025 moderately lower than its 2024 guidance, which puts the figure for this year at about 17%.

At its previous mid-term update in 2022, Nestle set out a target of an underlying trading operating profit margin of 17.5% to 18.5% by 2025, with organic sales growth in the mid single-digit percentage range.

Over the medium term, Nestle said it expects organic sales growth of more than 4% and an underlying trading operating profit margin of more than 17%.

The company said its water and premium beverages segment activities will become a global standalone business as of Jan. 1 and that it will be led by Muriel Lienau, currently head of Nestle Waters Europe.


Write to Michael Susin at michael.susin@wsj.com


(END) Dow Jones Newswires

11-19-24 0149ET