Nutrition focus could spell the end for Nestlé Skin Health unit

By Nikki Cutler contact

- Last updated on GMT

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iStock
Nestlé says it could sell its Skin Health unit as the firm looks to focus on its food, beverage and nutrition products.

The world’s biggest food and nutrition manufacturer firm has revealed it is looking for a new “ownership structure” for its Skin Health business after its the Board of Directors concluded the unit’s opportunities lie “increasingly outside the Group’s strategic focus”.

Nestlé says its ownership option review will be completed by mid-2019.

A spokesperson told NutraIngredients the announcement reconfirms the value potential of Nestlé’s Nutrition, Health and Wellness strategy, adding that its food, beverage and nutritional health products offer the best opportunity for long-term growth.

“There is broad range of options for Nestlé Skin Health; we are now exploring what ownership structure is best for this business and our shareholders,”​ said the spokesperson.

“As part of the review, the Board re-affirmed and emphasized the strategic importance of Nestlé Health Science. This science-driven nutritional health business, which focuses on medical nutrition and consumer health products, forms an integral part of the company's Nutrition, Health and Wellness strategy.”

The move by Nestlé to review its options for Skin Health comes at the same time as the company is reportedly looking to do further deals in the nutrition space – with a reported bid for GSK’s consumer health unit coming in recent days​.

Earlier this year, Nestlé bolstered its nutritional health care portfolio through the acquisition of Atrium Innovations, complementing its own line of nutritional products such BOOST, Nutren, Meritene​ and Peptamen​. Nestlé will continue to allocate significant resources to this growth area.

Mark Schneider, CEO, added: "Nestlé Skin Health has made significant progress under its new leadership team over the past 2 years. The company has developed convincing growth strategies for each of its business units and regained a competitive cost structure. Now is the right time to explore the best ownership structure for Nestlé Skin Health and to consider ways of taking it to the next level."

The skin health unit makes Cetaphil and Proactiv skin care brands, Restylane wrinkle fillers and prescription dermatology treatments. It had sales of 2.7 billion Swiss francs ($2.8 billion) last year. The unit formed in 2014 when Nestlé bought L’Oreal’s stake in their Galderma dermatology venture.

Jefferies analyst Martin Deboo told Reuters the most likely exit options were a leveraged buyout or a sale to L’Oreal, if the French cosmetics firm followed Nestlé in making a strategic U-turn.

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