Nestlé is in advanced discussions to sell its remaining ice cream businesses. The move forms part of CEO Philipp Navratil’s broader strategy to streamline operations.
The company confirmed that talks involve ice cream assets in Asia, Canada, and parts of Latin America. Potential buyer Froneri already operates as a joint venture between Nestlé and PAI Partners.
Nestlé currently holds a 50 percent stake in Froneri. The business was valued at approximately 15 billion euros last October. At that time, Goldman Sachs and the Abu Dhabi Investment Authority invested in the venture.
Focus Shifts to Core Growth Segments
Nestlé plans to concentrate on coffee, petcare, nutrition, and food and snacks. Brands such as Maggi and Nescafé remain central to this strategy.
Navratil stated that the company is building a leaner and performance-driven organization. Therefore, management expects continuous improvement through 2026 and beyond.
The fourth-quarter results supported this confidence. Organic sales rose 4 percent in the quarter ending December 31. Analysts had expected 3.4 percent growth.
Price increases contributed 2.8 percent to growth. Meanwhile, real internal growth reached 1.3 percent, exceeding projections.
Infant Formula Recall and Reputation Concerns
Despite operational progress, infant formula recalls have weighed on performance. The recall marked the largest in Nestlé’s recent history.
However, Navratil emphasized swift and transparent action. He expressed confidence that the issue would not create long-term reputational damage.
Although some short-term impact may occur, management anticipates limited spillover across other product categories.
Financial Outlook and Profit Expectations
Nestlé forecasts full-year organic sales growth between 3 and 4 percent in 2026. Additionally, the company expects its underlying trading operating profit margin to rise above 2025’s 16.1 percent.
Real internal growth should exceed last year’s 0.8 percent.
The company also strengthened its balance sheet. Net debt fell to 51.4 billion Swiss francs by December. Previously, it stood at 60 billion Swiss francs in June.
Strong cash flow generation supported this reduction. Furthermore, the board will propose increasing the dividend to 3.10 Swiss francs per share.
Portfolio Review Continues
Nestlé has completed a strategic review of its mainstream vitamin and supplement brands. It now plans to engage potential buyers.
In addition, the company intends to deconsolidate its waters business starting in 2027. Discussions with potential partners began during the first quarter.
Although analysts speculated about selling U.S. frozen foods, Navratil dismissed that possibility. He described the division as profitable and cash-generative.
Navigating Market Challenges
Navratil has faced external pressures since taking office in September. U.S. import tariffs, foreign exchange fluctuations, and weaker consumer purchasing power have created headwinds.
Nevertheless, Nestlé’s recent performance suggests operational resilience. Strategic divestments and tighter focus aim to enhance long-term value.
In conclusion, the proposed ice cream sale signals a decisive transformation. Nestlé is reshaping its portfolio while strengthening financial foundations. The coming months will determine how effectively the strategy drives sustained growth.
