Food group Nestlé is in no hurry to acquire companies given rich valuations and will stick to its traditionally cautious approach to deals, its chief executive told a conference on Thursday.
"I've done hundreds of deals in my life, the largest one ever was Starbucks at 7 billion so I'm not a 'mega deal' maker," Mark Schneider said in a discussion organised by Bernstein.
The maker of KitKat chocolate bars and Nespresso portioned coffee has been adjusting its portfolio under Schneider's leadership, gearing it more towards high-margin premium products.
'Have To Stay Level-Headed'
"I'm a strong believer in that statement by former US President Obama: don't do stupid stuff. That to me in M&A is sort of the guiding light. You have to stay level-headed, down to earth, even if something looks attractive on paper it has to add up in all components," he said.
"If in a year no major deal happens, we can live with that," Schneider said. "We're not in a rush, we have lots of ways to grow our business next to M&A. Deals are optional because in most categories we have strong market shares."
Schneider said valuations were still quite rich, also for small to mid-sized deals, but at least these smaller deals were offering better prospects to earn back the costs.
In July, Nestlé raised its full-year sales growth forecast to between 7% and 8% and trimmed its margin guidance after cost inflation hurt the world's biggest food group less than expected and price increases boosted first-half organic sales growth.
News by Reuters, edited by ESM. For more A-Brands news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.