Nestle SA, the world’s biggest food company, named Walmart Stores Inc executive Wan Ling Martello as chief financial officer (CFO) to succeed Jim Singh, adding an outsider to a company run by veterans.
Martello, 53, will take charge in April after Singh, 65, retires, Vevey, Switzerland-based Nestle said in a statement yesterday. Martello is currently Walmart’s executive vice president of global e-commerce and emerging markets and previously held posts at Kraft Foods Inc and Borden Foods Corp.
The US citizen of Chinese and Filipino heritage will join a board whose 12 other executives have almost three centuries combined of experience working at Nestle. She will be the second person from outside the Swiss company to take the CFO post in less than a decade. Paul Polman, a former Procter & Gamble Co executive and now head of Unilever, ran Nestle’s finances from 2006 until early 2008.
“For a company of too many ‘insiders’ at senior level positions, this external perspective and experience could prove to be very useful at Nestle,” Andrew Wood, an analyst at Sanford C Bernstein in New York, wrote in a note to investors.
Nestle rose as much as 1.2 per cent to 50 Swiss francs and was up 0.9 per cent as of 12.45 pm in Zurich trading as the Stoxx Europe 600 Index gained 0.2 per cent. With a market value of about 164.4 billion francs ($184 billion), Nestle is Europe’s second-most valuable company after Royal Dutch Shell Plc.
Martello’s experience in emerging markets may help Nestle achieve its goal of expansion in those regions. The company, which agreed to its biggest Chinese acquisition with a bid for candy maker Hsu Fu Chi International Ltd in July, has set a target of getting 45 per cent of revenue from developing countries by 2020, compared with about a third now. Unilever generates about half its revenue from those markets.
Martello speaks Mandarin and Hokkien Chinese and the Filipino language of Tagalog in addition to English. None of Nestle’s executive-board members list Chinese among their language skills in their profiles on the company’s website. She will also be Nestle’s highest ranking female executive.
The new CFO may also improve ties between Nestle and Bentonville, Arkansas-based Walmart, the world’s biggest retailer and one of the Swiss manufacturer’s largest customers, analysts at MF Global, including Andy Smith in London, said in a research note.
“She comes with a celebrated resume and has the required exposure to this business as both a supplier and a customer,” said Thomas Russo, who manages about $4 billion, including Nestle shares, as a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania.
Nestle usually promotes insiders as the average term of employment of Nestle executive board members is 28 years, according to Patrick Hasenboehler, an analyst at Bank Sarasin & Cie in Zurich.
Consumer goods companies are promoting people with emerging market backgrounds as countries such as China and India fuel their sales growth. Rakesh Kapoor became chief executive officer of Reckitt Benckiser Group Plc this month, capping a career at the UK household products manufacturer that started in his native India in 1987.
Nestle is focusing more on the internet as a way to sell products, such as Nespresso coffee, Special-T tea and BabyNes infant formula. The company created a website in Germany called Nestle Marktplatz this month to sell 1,500 products, including Baci Perugina and KitKat Mini chocolates.
Martello, who joined Walmart in 2005 as CFO of its international unit, helped lead the US retailer’s acquisition this year of a minority stake in Yihaodian, a Chinese online supermarket operator. Her replacement hasn’t been named, said Lorenzo Lopez, a Walmart spokesman.
“Martello does not have a superstar CV,” and she may have taken a step back from a more senior position within Walmart, Sanford’s Wood wrote.
Nestle may be trying to avoid a similar situation to that of former CFO Polman, who many investors had hoped would become CEO, Wood said.
“At first glance, Martello is far from the stature of Polman,” Wood wrote. “Somewhat cynically, perhaps Nestle considers that it learned its lesson last time and does not want the same again.”
Nina Backes, a Nestle spokeswoman, declined to comment on Wood’s remarks.
Singh has worked at Nestle for 35 years and has been CFO since 2008. During his tenure in that post, Nestle sold its holdings in eye-care provider Alcon to Novartis AG for $39 billion, freeing up cash for acquisitions, share buybacks and dividend payments.
Once Martello takes her new post, Nestle will have changed half its executive board members since Paul Bulcke became CEO in 2008.