Investors in Nestlé have shown cautious optimism in a turnaround as new CEO Philipp Navratil unveiled a structural shake-up and advanced plans to sell the reminder of its ice cream business to Froneri.
The news came alongside improved fourth quarter and full-year results as organic growth for 2025 hit 3.5% – with revenues of CHF 89.5bn (£85.8bn) – thanks to higher volumes and prices. Market share trends also improved significantly and the group’s ‘billionaire brands’ delivered their best performance for more than a decade. Underlying operating profits fell 8.4% to CHF 14.4bn (£13.8bn) on the impact of input cost inflation on margins, a hit from tariffs and higher marketing spend.
Results were better than analysts had feared in the aftermath of the recall of potentially contaminated baby formula. Nestlé forecast organic growth of 3% to 4% for 2026, with the impact of the sales returns related to the baby milk recall to be recognised in this year’s results.
Nestlé said in its results it would reorganise the group to focus on four categories – coffee, petcare, nutrition (which together account for 70% of sales), and food & snacking – and sell the remaining ice cream business in six markets to Froneri, a 50/50 joint venture with French PE firm PAI Partners formed in 2016.
The ice cream businesses still with Nestlé yet to be sold are in Canada, Chile, Peru, China, Malaysia and Thailand and contribute almost CHF 1bn in sales to the group.
Navratil told journalists on a call on Thursday the plan was to integrate the six markets into Froneri by next year.
He said there were no plans to exit the JV with Froneri. “We’re really happy with the performance Froneri is driving and… our strong belief is Froneri is the right owner of those businesses and will drive a better performance than we would do going forward,” Navratil added.
Navratil, the former Nespresso boss who took charge in September after Laurent Freixe was fired over a romantic relationship with a direct subordinate, is hoping to restore investor confidence in Nestlé following years of crisis and underperformance.
Thursday’s update comes after an announcement in October that Nestlé would slash 16,000 jobs over 18 months.
Shares in Zurich ended the day up 4.2% to CHF 81.68. It puts the under-pressure stock almost 11% higher since Navratil joined.
RBC analyst James Jones said Nestlé’s strategy was designed to put it “back on the sort of path we took for granted a few years ago”. “We feel progress is being made, but it is too early to call it a success,” he added.
Warren Ackerman at Barclays said Nestlé was making progress trying to reverse five years of underperformance. “Doubling down on petfood and coffee makes total sense, as does going after big growth platforms such as iced coffee,” he added. But Ackerman cautioned trying to turn around a super tanker in a fast-moving consumer goods space would be “no small feat”.
However, Jefferies analyst David Hayes said the portfolio plans were “little changed” and “undramatic for now”.
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