Nestle's new chief executive scraps the food company's long-standing sales target as it reports disappointing annual results, adopting a more cautious tone in an uncertain environment. Sonia Legg reports
It was his first public appearance since becoming CEO of Nestle. And Ulf Mark Schneider might have hoped to be delivering better news. The maker of Kitkat chocolate bars and Nescafe coffee reported a 3.2 percent sales increase for 2016. That's more than half a percent down on 2015 and the fourth time it's missed its target of 5 - 6 percent. (SOUNDBITE) (English) NAEEM ASLAM, CHIEF MARKET ANALYST, THINK MARKETS, SAYING: "What we are hoping for from the new CEO Mr. Schneider is that perhaps he will bring nutrition at the heart of his strategy. He should put more money towards research and policy because that's where the revenue will come from. Organic growth 5.4 per cent, we know today that that's not going to happen, the real figure is going to be 2.4 percent." The world's largest producer of packaged food isn't the only consumer goods group to report tepid results. Weakness in emerging markets - down from 7 to 5.3 percent in Nestle's case - has also hit Danone and Unilever . And that's not their only problem. (SOUNDBITE) (English) NAEEM ASLAM, CHIEF MARKET ANALYST, THINK MARKETS, SAYING: "Deflation which they have been facing very badly in the euro zone and then their infant products aren't doing that well either. Finally, it is the competition in the U.S. when it comes to the chocolate market." Schneider's given up on current targets. He's instead going for mid-single digit organic growth and significant structural costs savings by 2020. And there's one encouraging aspect - prices should start improving now inflation is on the up.