Nestlé SA : Who, Where, How Much?

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Nestlé SA


Who, Where, How Much?


Nestlé SA

Avenue Nestlé 55 / Case postale 353

1800 Vevey

Switzerland

Tel: +41-21-924 21 11

Fax: +41-21-921 18 85

+41-21-921 17 20

+41-21-921 64 88

+41-21-924 48 00

Company Structure/Ownership

Nestlé SA is a publicly owned company with 406 subsidiaries around the world. Many of these are operated in its own name, with exceptions such as the Israeli food company Osem. Its website lists company addresses in 104 countries[7].

Share Value

See: http://www.ir.nestle.com/Stock_Financials/Shares_ADRs/Stock_Quote/Stock+Quote.htm

Shareholders

Nestlé has about 250 000 shareholders, none of whom individually own more than 3% of the shares. As of December 31, 2003, Swiss investors held the major part of the stock (42%) followed by US citizens (22%) and British (10%), French (8%), and German (5%) shareholders. [8].Following the splitting of Nestlé shares in 2001 by a factor of 10, less well-heeled people can now afford to buy a share. Previously each share cost around £1,470.[A]

Unfortunately, shareholder identities are not made public under Swiss law, but we do know that Liliane de Bettencourt, heiress to the L'Oréal fortune and the richest woman in France, has a holding in Nestlé[9]. Nestlé and L'Oréal have a close relationship dating back to a shareholder pact made in 1974. Nestlé holds a 26.4% stake in the world's largest cosmetics group and has right of first refusal over the Bettencourt family's 27.5 percent stake for 10 years, but with no obligation to buy. Whilst it is unlikely that Nestlé will take over L'Oréal in the immediate future, it could well do so in a few years. It already has cosmeceutical joint ventures with L'Oreal through Galderma and Innéov. [B]

A Swiss investments company called Pelham Investments SA is also named as a shareholder.

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Annual Turnover

In 2003, total sales were a massive 88bn Swiss Francs (£39bn) with a net profit of 6,213m Swiss Francs (£2,7bn) [12] - a fall of 1.3% on the previous year's figures. Nestlé, which only reports yearly and half-yearly results, posted disappointing half-yearly results for the period January-June 2004, with sales of 42.45bn Swiss francs (£18bn) and a net profit of 2.84bn Swiss Francs (£889m). In a statement, Nestlé blamed the higher prices of raw materials such as milk, coffee and sugar, as well as expensive energy and packaging materials, poor weather conditions and a difficult business environment in Western Europe. With 'efficiency programmes' on track, Nestlé plans to cut costs by more than six billion Swiss Francs by 2006, by closing factories and eliminating jobs. However, it has met with considerable resistance to closures by workers across Europe, especially in French factories producing the loss-making Perrier brand, in a German factory producing food for the Maggi brand, and in a chilled dessert factory in Staverton, Wiltshire where unions and locals have set up a 'Staverton must survive' campaign with support from European and international trade union federations.[C]

Company Officers:

Honorary Chairman Helmut O. Maucher [13]

Maucher is one of the leading agenda-setters behind corporate globalisation. Through his leadership of the International Chamber of Commerce, European Round Table of Industrialists and Geneva Business Dialogues, Maucher has relentlessly promoted corporate interests in the WTO, UN, G8 and OECD. He has also spoken out against what he calls 'globophobia' (read: anti-capitalism) and in a private meeting with Tony Blair at the 1998 G8 summit urged him to weed out troublesome NGOs [D]

Maucher is also on the boards of Bayer AG (genetic engineering enthusiasts); Ravensburger AG; Koç Holding A.S.; Istanbul Union Bancaire Privée, Geneva; and Qualiclick.com AG, Zollikon. He is a Member of the Board of Trustees, World Economic Forum (WEF), Geneva; Member of the Board of Trustees, Fondation Simón I. Patiño, Geneva; Chairman of the Board of Trustees, Council on European Responsibilities (COEUR), Paris; Chairman of the Special Presidency Group, International Chamber of Commerce (ICC), Paris; Chairman of the Board of Trustees, "Stiftung Demoskopie Allensbach", Germany; Member of the Board, Konstanz University, Germany; Member of the Board, Industrial Investment Council (IIC), Berlin; Member of the Advisory Council, 'Deutsche Vermögensberatung AG' (DVAG), Frankfurt and Member of the Advisory Board, 'Orchester-Akademie des Berliner Philharmonischen Orchesters', Berlin[14].

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Board of Directors (Year Denotes Term Expiry)

Rainer E. Gut - Chairman (2005)

Formerly of Credit Suisse, Gut is also on the board of directors of Uprona (Canada) Ltd. (Chairman and Delegate); Gesparal, Paris, France (Vice-Chairman); L'Oréal, Paris, France; Pechiney S.A., Paris, France; Sofina S.A., Bruxelles, Belgium [15].

Peter Brabeck-Letmathe - Vice Chairman & Chief Executive Officer (2007)

Brabeck-Letmathe is Vice-Chairman of the Boards of Directors of Credit Suisse Group, Credit Suisse and Credit Suisse First Boston. Furthermore, he is a member of the Boards of Directors of L'Oréal and of Roche Holding S.A. He is also a member of ERT (European Round Table of Industrialists), of the Bretton Woods Committee's International Council, of the Board of The Prince of Wales Business Leaders Forum and of A.P.P.I. (International Association for the Promotion and Protection of Private Foreign Investments) [16].

At Nestlé's 2004 Annual General Meeting, one shareholder complained that Mr Brabeck's yearly remuneration – if his shares were taken into account - amounted to nearly 12 million Swiss Francs (£5.3m).

Jean-Pierre Meyers (2006)

Board memberships: L'Oréal (since 1987; vice-chairman since 1994), Gesparal (since 1989), Pargeral (since 1996), Bettencourt-Schueller Foundations (since 1988), Rothschild Ophthalmological Foundation, Paris (since 1992) [19].

Peter Böckli (2008)

A lawyer by training, Böckli is a big fan of corporate self-governance. In fact, he drafted the Swiss Code of best practice for corporate governance. [E]

His other board memberships: UBS (since 1998 - merger with SBC), SBC (1985 - 1998), Firmenich (International) S.A. (since 1990), Habasit A.G./Habasit Holding A.G. (since 1969), Hason A.G. (since 1980), Nomika Immobilien A.G., Chairman (since 1981), Assivalor A.G. (since 1969), Pertinax A.G. (since 1972) [20]. He is also President of the Committee of Patrons of the Museums of Fine Arts, Basle and a visiting professor at the University of Basle.

André Kudelski (2006)

He started his career at Kudelski SA, founded by his father, and in 1986 was appointed product manager for Pay-TV products. He became the director of the Pay-TV division, then called NagraVision, from 1989 to 1990. In 1991, he took over the position of Chairman and CEO of the Kudelski group. The Kudelski family owns 2/3 of the company. In 1992, he became Chairman and CEO of Nagra Plus SA, a joint-venture of Kudelski SA and Canal Plus.

In 1995, André Kudelski was nominated by the World Economic Forum as a "Global Leader for Tomorrow". In 1997, he became member of the Board of Directors of the Geneva International Airport. Since 1998, André Kudelski is board member of Edipresse, the second largest press group in Switzerland. He is also on the advisory board of an information technology fund. In March 1999, he became member of the Credit Suisse Swiss Advisory Board. [23]

Nobuyuki Idei (2006)

Idei is the CEO and Chairman of Sony Corporation, having worked for Sony since 1960. He was elected onto the board of General Motors in November 1999. Idei served as Chairman of the IT Strategy Council, an advisory committee to Japan’s Prime Minister from July to November 2000. As Chairman of the Council, Idei played a major role in the development of Japan’s IT Basic Law. Based on this Law, the IT Strategy Headquarters was established in January 2001, in which Idei was appointed a member [24].

Andreas Koopman 2008

Koopman is the CEO of the Bobst Group SA. He is on the Advisory Board of Credit Suisse Group, member of the Executive Board and Board Member of Swissmem and a member of the Board of Directors of SIG Holding AG.

Kaspar Villiger 2009

Villiger is an industrialist and a politician. He was president of the Swiss Confederation twice in 1995 and 2002, resigning at the end of 2003, and served as Defence Minister in 1989-1995 and Finance Minister in 1995-2003. He is also a governor of the IMF for Switzerland and sits on the Board of Directors of reinsurance company, Swiss Re.

Rolf Hanggi (2009)

Former deputy CEO of Zurich Insurance Company.

Daniel Borel (2009)

Chairman of Logitech International SA. He is a Director of Phonak Holding Ltd., a Swiss hearing aid device company; a director of Julius Baer Holding Ltd. and Bank Julius Baer & Co. Ltd., the Swiss parent company and the Swiss banking subsidiary of the Julius Baer banking group; he is on the board of Fondation Defitech, a Swiss foundation which contributes to research and development projects aiming at assisting the disabled. He also serves as Chairman of the Board of SwissUp, a Swiss educational foundation promoting higher learning.

Lord Edward 'Eddie' George of St Tudy (2007)

The former governor of the Bank of England (1993-2003). Board memberships include Rothschilds Continuation Holdings A.G., Zug, Switzerland; Bank for International Settlements, Basle, Switzerland; N. M. Rothschild and Sons Ltd, London, UK; Grosvenor Group Holdings Ltd, London, UK.

Carolina Müller-Möhl (2009)

Chair of the Müller-Möhl Group. Young, beautiful and worth $260 million (£145m).

Secretary to the Board: Bernard Daniel, Secretary General.

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Former Board members include:

Vreni Spoerry (2004)

Since 1983, she has managed to fit in being a member of the Swiss National Council (Parliament), Member of the permanent commissions for the economy, for social security and health, Member of the ad hoc commission for the revision of the federal pension and retirement insurance scheme, Chair of the finance and taxes committee of the Swiss Liberal-Radical Party, Member of the Executive Committee of the Swiss Liberal-Radical Party, Member of the Board of the Credit Suisse Group (elected 1997), and Vice-Chairman of SV Service AG (since 1999) [17].

Stephan Schmidheiny (2003)

Board memberships: ANOVA Holding AG (Chairman), UNOTEC Holding AG (Chairman), NUEVA Holding, Inc. (Chairman) WRI, IIE, American International Group, International Advisory Board, President of the FUNDES Foundation for aid to developing countries, President of the Board of the Max Schmidheiny Foundation at the University of St Gallen, President of the Board of the IMI Foundation, the International Management Institute in Geneva [18].

Arthur Dunkel (2004)

In 1960 he began working at the Federal Office of Economic Affairs in Berne, and took responsibility for the areas of the OECD, EFTA and UNCTAD. From 1976, was representative of the Swiss government at economic treaties with the rank of ambassador. Between 1980–1993 he was director-general of the General Agreement on Tariffs and Trade, which preceded the WTO.

Board memberships: Credit Suisse Group (since 1994) [21].

George Simpson (2004)

Lord Simpson of Dunkeld has worked in the motor industry since 1969, mainly in Leyland and Rover. In 1990 he joined the Board of British Aerospace plc, and became Industrial Professor of Warwick University in 1991. He became Chairman of Rover Ltd. in1992, and Deputy Chief Executive of British Aerospace in1994. He was Chief Executive of Lucas Industries plc from 1995 – 1996, President of the Society of Motor Manufacturers and Traders Ltd from September 9, 1996, and succeeded Lord Weinstock as Chief Executive of the General Electric Company plc. He is also non-executive Director of ICI plc and Pilkington plc and is Vice President of the Society of British Aerospace Companies. He is a member of the European Round Table, and sits on the Mayor of Shanghai's International Business Leaders' Advisory Council [22].

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Executive Board

Nestlé executives tend to join and never leave. According to one report, the 12-man board has notched up 349 Nestlé years - an average of 29.1 per man (there are no women in senior management). For an interesting insight into the Nestlé corporate culture see http://www.fromeuropewithlove.net/planet_Nestlé.htm.


Chief Executive Officer

Peter Brabeck-Letmathe (see above)

Executive Vice Presidents:

Francisco Castañer: Pharmaceutical and Cosmetic Products, Liaison with L'Oréal, Human Resources, Corporate Affairs. Has been with Nestlé since 1964 [25].

Ed Marra: Strategic Business Units, Marketing. Joined Nestlé in 1981. He sits on the Executive Committee - Food Industry Association (Canada). He is a member of the Executive Committee and Board of Directors of the Food and Consumer Products Manufacturers of Canada. He is also a board Member of the Grocery Industry Foundation (Canada).

Michael W.O. Garrett: Asia, Oceania, Africa and Middle East. Australian by nationality, he began with Nestlé in 1961. He was appointed by the Australian Government as Chairman of the Food Industry Council and Member of the Industry Council of Australia. He is a member of the Advisory Committee for an APEC (Asia-Pacific Economic Cooperation) Food System. He is also Joint Deputy Chairman of the Evian Group (the Europe-Asia forum for debating the framework of the global economic order).[27]

Werner J. Bauer: Technical, Production, Environment, Research and Development. Was a professor of chemical engineering and later of food technology.

Lars Olofsson: Europe. Joined Nestlé in 1976 [29].

Wolfgang H. Reichenberger: Chief Financial Officer. With Nestlé since 1977 [30].

Paul Bulcke: The Americas. Been with Nestlé since 1979.

Frits Van Dijk: CEO Nestlé Waters (new name for Perrier Vittel SA). Started as a sales rep with Nestlé in 1970.

Chris Johnson: Deputy Executive Vice President, GLOBE Programme leader, responsible for Information Systems and Logistics [32]

Luis Cantarell: Deputy Executive Vice President, Nutrition Strategic Business Division. Joined Nestlé in 1976. He is Co-Chairman of Laboratoires Innéov, France. Board Member of Life Ventures Nestlé S.A. Chairman of the Board and Director of Sofinol S.A., Manno (Switzerland).

Another important director is Xavier Perroud who is head of Communications and has been with Nestlé for 25 years.

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Joint Ventures

Nestlé SA has several joint ventures. These are some of the larger ones:

Beverage Partners Worldwide, formed in 2001, is a joint venture between the Coca-Cola Company and Nestlé S.A. It concentrates on tapping markets in the beverage sectors, particularly ready-to-drink coffee and teas, such as Nestea.

Cereal Partners Worldwide is a joint venture between Nestlé and General Mills.

Laboratories Innéov is a joint venture between Nestlé and L'Oréal, formed in 2002.

Dairy Partners Americas is a 50/50 partnership between New Zealand dairy multinational, Fonterra and Nestlé and was established in January 2003. The alliance now operates joint ventures in Argentina, Brazil, Venezuela, Ecuador and Colombia.

Such partnerships between huge corporations are an interesting feature of an economic system which is said to take competition as one of its defining features. In reality, apparent competitors work very closely together to ensure their common interests are pursued.

UK Operations:

Nestlé Holdings (U.K.) plc

Nestlé UK Ltd

St. George's House

Croydon

CR9 1NR

Telephone:

+44 (0)20 8686 3333

Consumer Services: 00800 63785385

Direct Fax: +44 -1904 603461

Company Directors

Company secretary: Isabelle Deschamps

Chief executive: Alastair Sykes

Executive Director: Graham Millar


Nestlé UK Ltd.

Managing Director: Chris White

Manager, Sales communications: Graham Walker

Directors

Albert Willi

Alastair Sykes

Christopher Tyas

David Hudson

Graham Millar

Fiona Kendrick

Isabelle Deschamps


"Nestlé Rowntree is a business in crisis. The past couple of years have been tough and the advertising hasn’t delivered. We have created ads to win awards, not to get people to buy our products."

Chris White, Managing Director, Nestlé Rowntree [F]

Nestlé is the number 3 confectionery brand in the UK after Cadbury's and Mars. It sells probably the most popular chocolate brand in the UK, Kit Kat, which it acquired in 1988 when it bought York-based confectioners, Rowntree, in the largest ever foreign takeover of a British company to date. However, not all is going well for Nestlé UK and Kit Kat, with research by analysts Information Resources showing a 9.1% year-on-year decline in Kit Kat sales in the year to 2003. In 2003, Nestlé UK's turnover was £1.8bn and its profit (before tax) was a paltry £6.3m. That is a 0.35% profit margin. Nestlé in the UK has 9,196 employees.[G]

In response to its poor performance in the UK, Nestlé has had an extensive programme of closure, sale or the shedding of jobs in most of its UK operations recently.

In 2001, Nestlé UK scaled down its operations by selling its UK ice cream division to Richmond Frozen Confectionery Ltd. They were further scaled down in 2002, with Nestlé's sale of the Crosse & Blackwell and Branston Pickle businesses to Premier International Foods, having failed raise the profile of these brands. The division also included Sun Pat butter, Gales Honey, Sarsons Vinegar and Rowntree Jelly. Nestlé retains the brand for preserves and sauces in the US and a few other markets. [H] In 2002, Nestlé UK acquired Ski and Munch Bunch from Northern Foods Plc.

Nestlé UK has a joint venture with Finsbury Foods (Memory Lane cakes) since January 2004 to recreate well known Nestlé brands in the UK.

Shareholders:

Entreprises Maggi (Switzerland) 4,940,000 shares

Nestlé SA (Switzerland) 5,3000,000 shares[35]

Nestlé subsidiaries in the UK under Nestlé Holdings (U.K.) Plc

Neslaw No 1 Ltd

Nespresso Ltd

Nestlé Purina Holdings (UK) Ltd

Nestlé Purina Petcare (UK) Ltd

Nestlé UK Ltd

Nestlé Waters Powwow (UK) Holdings Ltd

Nestlé Waters UK Ltd.

Purina Pension Trust Ltd.

Buxton Mineral Water Company

Cereal Partners UK Pension Trust

Daflaw Ltd

Dallaw Ltd

Eblaw Ltd

Luda Petfood Ltd

Paragon Petcare Ltd

Raw Products Ltd

Auditors

KPMG Audit Co.

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References

[7] http://www.Nestlé.com/Header/Country_Access/Country+Access.htm

[8] http://www.ir.nestle.com/Stock_Financials/Investor_FAQs/General_Faqs/General+FAQs.htm

[9] www.forbes.com/chat/trans/dolan_0619.shtml

[10] Baby Milk Action Boycott News, Issue No.29, June 2001 www.babymilkaction.org/www.babymilkaction.org/boycott/boyct29.html

[11] www.Nestlé.com/investor_relations/kf_swiss_index.html

[12] http://www.Nestlé.com/NR/rdonlyres/74F5A6ED-C072-4CD2-B701-C1AE3C5E482C/0/quickfactsenglish.pdf

[13] For more on this man, see www.oneworld.org/ni/issue332/worldbeaters.htm and www.oneworld.org/ni/issue275/Nestlé.html

[14] www.Nestlé.com/investor_relations/index.html

[15] www.Nestlé.com/investor_relations/index.html

[16] www.Nestlé.com/investor_relations/index.html

[17] www.Nestlé.com/investor_relations/index.html

[18] www.Nestlé.com/investor_relations/index.html

[19] www.Nestlé.com/investor_relations/index.html

[20] www.Nestlé.com/investor_relations/index.html

[21] www.Nestlé.com/investor_relations/index.html

[22] www.Nestlé.com/investor_relations/index.html

[23] www.Nestlé.com/investor_relations/index.html

[24] www.Nestlé.com/investor_relations/index.html

[25] www.Nestlé.com/investor_relations/index.html

[26] www.Nestlé.com/investor_relations/index.html

[27] www.Nestlé.com/investor_relations/index.html

[28] www.Nestlé.com/investor_relations/index.html

[29] www.Nestlé.com/investor_relations/index.html

[30] www.Nestlé.com/investor_relations/index.html

[31] www.Nestlé.com/investor_relations/index.html

[32] www.Nestlé.com/investor_relations/index.html

[33] www.Nestlé.com/all_about/ww_address/index.html

[34] Annual Return, Nestlé UK Ltd.

[35] Annual Return Nestlé UK (Holdings) PLC

[36] Annual Return, Nestlé UK (Holdings) PLC

[37] Nestlé Press Release, 30th January 2001, www.Nestlépress.com/

[38] www.forbes.com/best/2001/0521/086.html