Nestlé’s strategic shift and 2025 results – summary
- Nestlé reports 3.5 percent organic growth with rising internal performance
- CEO emphasises four priority businesses driving accelerated long term strategy
- Company prepares to separate remaining ice cream unit including Häagen Dazs
- Cereulide contamination costs expected to significantly impact financials in 2026
- Planned 16,000 job cuts raise uncertainty around future organisational structure
Nestlé’s CEO, Philipp Navratil, announced the company’s full year results this morning, with a clear agenda in mind – focus on the positives.
And, when looking at the numbers alone, there is plenty to celebrate.
The food and beverage giant, known for mega brands including KitKat, Nespresso and Quality Street, saw a 3.5% bump in organic growth, with real internal growth (RIG) up 0.8%.
“I am encouraged by our performance during 2025, which reflects the targeted actions we have taken in a difficult external environment,” said CEO Navratil during the announcement. “Real internal growth (RIG) was positive across all Zones and global businesses.”
The Austrian-Swiss businessman, who took the helm at Nestlé’s after his predecessor’s shock exit, went on to explain that the company had increased its investment in marketing, delivering a underlying trading operating profit (UTOP) margin of 16.1%, and generating CHF 9.2bn (€10.09bn) in free cash flow.
“Improving organic growth, RIG and market share trends in the second half show that our actions are working.”
He continued in this extremely positive tone, which may surprise some, in light of recent events, saying Nestlé is “accelerating” its strategy and focusing its portfolio on four businesses – Coffee, Petcare, Nutrition, Food & Snacks.
These, he says, will receive prioritised resources, and simplify the organisation.
He also broke the news that Nestlé is in advanced negotiations with Froneri, to offload its remaining ice cream business, which includes Häagen-Dazs. Though Nestlé actually owns 50% of Froneri, with private equity firm PAI Partners owning the other 50%.
The move follows a similar decision made by British multinational Unilever.
He concluded with the words, “we are confident that our faster execution of a more focused strategy will deliver sustained improvement through 2026 and beyond,” in an address that was clearly geared towards improving investor confidence.
However, there were several glaring omissions from the announcement.
Cereulide contamination crisis
Navratil failed to make any reference to the ongoing cereulide contamination crisis in the earnings announcement.
However, it was addressed during the subsequent investor call, with Navratil outlining the timeline of events, and reiterating Nestlé’s commitment to consumer safety.
CFO, Anna Manz, then spoke on the financial impact.
Manz explained that the financial impact won’t be seen in the 2025 full year results, as the recalls applied to products produced in 2025. The losses, she says, “will be recognised in 2026″.
The formula crisis saw the Swiss multinational pull batches of infant formula products from shelves across the globe, with analysts putting the estimated overall cost to Nestlé at as much as CHF1.3bn.
16,000 jobs to be cut
There was also no reference made to the fact that 16,000 jobs are to be cut over the next two years.
Investors and employees may well have been expecting further details on this in order to understand how the loss of 7% of the workforce will shape the future of the company.
Though Navratil did say Nestlé is stepping up its efficiencies and strengthening its financial position, a focus that’s “underpinned by a performance culture that rewards excellence and results”.
Will the layoffs therefore be performance led? Or are entire departments to close?
Water division to be sold
News broke last month that Nestlé has officially launched the sale of a stake in its water business.
The Swiss major is seeking first-round bids for the unit, which houses brands including Perrier and San Pellegrino, this month, with the business valued at around €5bn.
Like the cereulide contamination, nothing was mentioned on this during the earnings announcement, but it was addressed during the investor call.
Last, said Navratil, is Waters. “As you know, we are working towards a partnership for that business. The formal process of engaging with potential partners kicked off earlier in Q1 and we expect Waters to be deconsolidated for 2027.”
Nestlé’s outlook
The accelerated focus on four core pillars places Nestlé on a more streamlined path, one designed to sharpen investment priorities and build resilience in categories with long-term global momentum.
Coffee and Petcare, in particular, continue to outperform across FMCG, and Nutrition remains central to Nestlé’s identity even as it faces heightened scrutiny.
A more disciplined portfolio could position the Swiss multinational for stronger, more predictable growth.
But the real question is whether these future-facing bets can counterbalance the challenges still unfolding.
The cereulide contamination crisis has not yet fully played out, and its financial impact – due to hit in 2026 – will test both investor patience and the company’s crisis-management capabilities.
The planned reduction of 16,000 roles adds further uncertainty – a bold restructuring could strengthen competitiveness, but a poorly handled one risks destabilising operations at a critical moment.
Meanwhile, the separation of the remaining ice cream business, and the potential sale of the iconic water division mark the most significant reshaping of Nestlé’s identity in years.
A company long defined by a sprawling portfolio is consciously narrowing its scope. Whether this becomes a masterclass in strategic discipline, or a sign of retrenchment amid mounting pressures, will hinge on the execution Navratil has promised.
For now, Nestlé is projecting confidence – leaner, more focused, and eager to prove that the turbulence of recent months is a prelude to renewed strength.
