Bars of original KitKat chocolate, produced by Nestle SA.
Jason Adlen | Bloomberg | Getty Images
LONDON — Investors may think that the replacement of Nestle CEO Mark Schneider with company veteran Laurent Freixe is “not such a bad thing,” analyst Jon Cox said Friday.
Cox, who is head of consumer equities at Kepler Cheuvreux, told CNBC that he expects many investors will welcome the move following a period of lackluster performance at the world’s largest food manufacturer.
“I think confidence has been severely hit in the case and particularly in Schneider,” he told “Squawk Box Europe.”
“I presume most people will think it’s not such a bad thing at this point for Schneider to go,” he said.
Nestle shares were trading 2.57% lower at 8:48 a.m. London time.
The Swiss firm said in a statement Thursday that Schneider, who was at the helm for eight years, “has decided to relinquish his roles as CEO and member of the board of directors.”
Freixe, who joined Nestle in 1986 and served most recently as executive vice president and CEO of the Latin America unit, will take over from Sept. 1.
“Laurent is the perfect fit for Nestlé at this time. Under his leadership, Nestlé will further strengthen its position as a dependable, reliable company through consistent and sustainable value creation,” said Paul Bulcke, chairman of the board of directors.
The move comes as Nestle’s share price has come under pressure following a series of earnings misses.
The company has struggled to retain market share as consumers have shifted away from labelled products amid inflationary pressures.
Cox said the timing was “unfortunate” for Schneider but noted that investor confidence had been hit in recent years. He also said there had been a number of strategic missteps on Schneider’s part, including his failure to successfully integrate a number of consumer health add-ons.
The appointment of Schneider, who joined from the health-care industry in 2017, was seen as an unusual move for Nestle, which has typically appointed company insiders to the role of CEO.
Bernstein analysts suggested in a note Friday that Schneider’s replacement could have come as a result of disagreements over his operational style.
“The chairman’s focus on the executional capability of the new CEO and his leadership style possibly implies that this is where they found Mark falling short,” they wrote.
“Now we’ve gone back to basics. We’ve gone back to a 30-, 40-year veteran at the company,” Cox noted.
Deutsche Bank said it expected the incoming CEO to be more focused on top line growth as opposed to mergers and acquisitions activity, though it said some modest changes in the portfolio could be expected.
“We expect the skill set of the incoming CEO to be more suited to the needs of Nestle at this time and at the moment we don’t see a big one-off margin reset,” it added.
