Nestlé appoints Bulcke as its new CEO
Swiss food multinational Nestlé has chosen Paul Bulcke of Belgium to succeed Peter Brabeck as its chief executive from April 10 next year.
Bulcke, aged 53, took the business world by surprise. The expectations were that Chief Financial Officer Paul Polman would replace Brabeck, who is to remain chairman of the board.
There was a cool response to the news at the stock exchange with Nestlé’s share price dipping by 3.59 per cent to close on Thursday at SFr510 ($435.95).
Bulcke, who has been with the world’s largest food concern since 1979, is currently head of the group’s Americas division.
“The board chose a strong and pragmatic business leader, ideally suited to lead the group in a period that will be marked by a phase of strategic and operational consolidation and a continued broadening of our Nutrition, Health and Wellness business,” commented Brabeck in a statement.
“At the same time Nestlé will maintain its strong growth momentum in the developing and emerging world.”
Brabeck, who comes from Austria, added that Bulcke had played a “decisive role” in transforming the Americas region not only into the group’s largest, but also into its most profitable one.
A Nestlé spokesman said there was no indication of a change in the CFO position.
Helvea analyst James Amoroso said that provided Polman stayed at the company, it could be a good move to have two such strong executives at the top, one with extensive knowledge of the company and the other with a grip on the finances.
Big difference
“If Polman stays, and I really hope he does because he’s already made such a big difference to the way the business is run and the company’s image to investors and the business community… this is an interesting move,” he commented.
The company statement said that with Bulcke’s nomination, the board had completed a process initiated in 2005.
At that time it had decided to combine the roles of chairman and CEO to speed up the transformation of the group in the direction of Nutrition, Health and Wellness.
That goal had now been achieved and a new organisational structure put in place to continue the process of generating “significant performance improvement and strong growth”.
It said the board felt the time was now right to separate the two key functions again.
The timing, it added, was designed to give the role of chief executive to a younger person who could assume the position for a “number of years”.
Criticism
Brabeck became chairman of the board in 2005, sparking criticism from a number of Nestlé shareholders for breaking with the traditional practice of keeping the two key posts separate and preventing any one executive from holding too much power.
However justified the criticism, Brabeck can look back on ten years of impressive financial figures in his role as chief executive.
Under his leadership, the share price has almost tripled and net profit more than doubled. Turnover has risen from around SFr70 billion ($65.85 billion) in 1997 to a figure widely expected to exceed SFr100 billion this year.
swissinfo with agencies
Nestlé first half 2007
Sales: SFr51.114 billion (+ 8.4% compared with first half last year)
Earnings before interest and tax (Ebit): SFr6.919 billion (+14.2% or +SFr859 million)
Net profit: SFr4.916 billion (+18.4% or +SFr765 million)
Bulcke has been with the Nestlé group since 1979 when he started as a marketing trainee in Switzerland, Spain and Belgium.
Between 1980 and 1996, he had marketing, sales and division functions in Peru, Ecuador and Chile.
From 1996-98 he was managing director of Nestlé Portugal before moving on in the same position to the Czech Republic and Slovakia (1998-2000), and Nestlé Germany (2000-2003).
Bulcke has been responsible for the Americas (United States, Canada, Latin America and the Caribbean) since 2004.
The company was founded in Vevey in 1866 by Henri Nestlé and is today the world’s largest food and beverages company.
It is in the top 30 of the world’s largest companies in terms of market capitalisation.
Sales for 2006 were SFr98.5 billion, with a net profit of SFr9 billion.
The company employs around 265,000 people and has factories or operations in almost every country in the world.
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