Nestle S.A. has announced its intention to sell off its ice cream business. The Swiss food conglomerate is streamlining its organizational structure to concentrate on four primary core categories.

The maker of KitKat chocolate bars and Nescafé is working to turn around its operations following the recent appointment of Philipp Navratil as Chief Executive Officer. The company had faced a series of setbacks, underperforming against expectations, and was rocked by two unexpected CEO changes within a year, leading to instability. The group is also aiming to move past a crisis stemming from its infant formula business, which previously triggered an industry-wide product recall.

On Thursday, Nestle revealed plans to sell its remaining ice cream operations to the joint venture Froneri and to spin off its water and premium beverage division—which includes brands like Perrier and S.Pellegrino—by 2027. These actions form part of a broader restructuring initiative, with the company reorganizing around four key business areas: coffee, pet care, nutrition, and food products.

During early trading in Europe, Nestle's stock rose by 3.7%.

The company stated that it will merge its Nutrition and Health Science division into a single business unit, with Anna Mohr, the head of the Health Science department, departing.

Nestle had previously signaled that certain business segments could be sold, having initiated strategic reviews of its vitamin and water businesses even before Philipp Navratil took the top role.

In October of last year, the CEO announced plans to cut 16,000 jobs and indicated that the company would carefully evaluate further opportunities to streamline its operations.

Several consumer goods groups, including rival Unilever, have either spun off business units or announced plans to divest brands. Unilever completed the separation of its ice cream business in December, establishing the standalone Magnum Ice Cream Company. Keurig Dr Pepper acquired JDE Peet's, the parent company of Peet's Coffee, last year and outlined plans to split its coffee and beverage divisions. The British multinational group Reckitt agreed in July 2024 to sell a portfolio of home care brands.

Nestle's strategic restructuring comes as Philipp Navratil consolidates his position within the company. He previously led the Nespresso business before being promoted to the top job, succeeding former CEO Laurent Freixe, who was dismissed due to an undisclosed relationship with a direct subordinate. However, Navratil's tenure began under the shadow of the infant formula issue: contaminated ingredients prompted the Swiss firm, along with peers such as France's Danone, to initiate multiple rounds of global recalls.

In a conference call with reporters, Philipp Navratil stated that the recalls have been fully completed and that the company is operating production facilities around the clock to ensure supply.

What began as a precautionary recall after the detection of vomitoxin in raw materials has escalated into a full-blown crisis, affecting products in more than 60 countries.

Nestle indicated that it expects the infant formula recall incident to impact sales growth this year. The company forecasts organic sales growth of 3% to 4%, with the recall event subtracting 0.2 percentage points, and warned that due to uncertainty around potential additional effects, the final growth rate may land at the lower end of the range.

Nestle reported a 4% year-on-year increase in organic sales for the fourth quarter, driven by a combination of price increases and volume growth, following a 4.3% rise in the third quarter. According to a company-compiled consensus of market expectations, analysts had previously anticipated growth of 3.4%.

Full-year total sales for 2025 reached 89.49 billion Swiss francs ($115.75 billion), compared with 91.35 billion francs the previous year. Analysts had expected 89.69 billion francs.

Net profit declined by 17% to 9.03 billion francs; Nestle's key profitability metric—underlying operating profit—fell by 8.4% to 14.39 billion francs, primarily due to increased investments aimed at driving revenue growth.