The world’s biggest foodmaker said today that its trading operating margin would be 17%, below the 17.5% to 18.5% goal set by Freixe’s predecessor, Mark Schneider.

Sales will rise 4% or more in the medium term, compared with the mid-single-digit growth predicted by Schneider for 2025.

Nestle also announced fresh cost-cutting of ₣2.5 billion (US$2.8 billion) by 2027, even as it plans to increase spending on advertising and marketing to bolster its brands.

The group will separate water brands like Maison Perrier and Acqua Panna as of Jan. 1, 2025 into a standalone business led by Muriel Lienau, head of Nestle waters in Europe.

The mineral waters business, which represents less than 4% of revenue, has struggled of late from contamination issues and supply constraints.

Management will evaluate the strategy of the business, including partnership opportunities.

A 38-year company veteran, Freixe took over in September after the ouster of Schneider, who led Nestle for almost eight years.

Freixe’s first move was to lower the company’s target for organic sales growth this year to around 2%, which would be the lowest annual rate since at least the turn of the century.

Nestle said it expects sales growth to improve in 2025 while the underlying operating profit margin falls.

The CEO is increasing marketing spending in an attempt to restore investor confidence after recent missteps, including a previous cut to the sales goal in July.

Under Schneider, Nestle relied on higher prices to drive sales during the inflationary period coming out of the pandemic, prompting shoppers to trade down to cheaper items. It’s since had trouble luring them back.