By Alexander Marrow and Oliver Hirt
Nestlé said on Thursday it was in talks to sell its remaining in-house ice cream business as part of new CEO Philipp Navratil’s drive to streamline the sprawling Swiss consumer food giant.
Nestlé had already handed the reins of its European and US ice cream units to Haagen-Dazs owner Froneri, a joint venture it established with European buyout firm PAI Partners in 2016.
It is now in advanced talks to sell ice cream businesses with around Sf1bn ($1.3bn) in annual sales in Canada, Chile, Peru, Malaysia and Thailand to Froneri, including brands KitKat ice cream and Coffee Crisp.
“There are times when we decide that focusing means exiting businesses,” Navratil said, adding that the ice cream business is “strong, but small, and it’s a distraction for us”.
The announcement follows Unilever’s spinoff of rival Magnum Ice Cream last year.
Nestlé said it has no plans to exit the Froneri joint venture, valued at some €15bn in October, including debt, and in which the Swiss group owns a 50% stake.
The maker of Maggi stock cubes and Nescafé coffee plans to focus on its coffee, pet care, nutrition and food and snacks units. It reported better-than-expected fourth-quarter sales growth.
“The company is giving thought to the right things,” said Kai Lehmann, senior research analyst at Nestlé investor Flossbach von Storch.
Navratil, who announced plans to cut 16,000 jobs in October, has been pushing to raise volume growth while battling the negative impacts from US import tariffs and foreign exchange, as well as consumers with less purchasing power.
Nestlé’s strategic review of underperforming vitamin and supplement brands has concluded, and it is engaging potential buyers. It also expects to deconsolidate its waters business from 2027.
Analysts have suggested that US frozen foods could be another division for the chop, but Navratil said that remained part of the portfolio as a profitable, cash-generative asset.
Navratil’s efforts to overhaul the packaged goods producer since taking over in September have been overshadowed by the biggest infant formula recall in Nestlé’s recent history.
The CEO said the company had acted swiftly and transparently to earn the trust of regulators and consumers.
“There might be some impact from the recall, but then I think there is not a long-term reputational issue that we’re facing,” he said.
Nestlé sees 2026 full-year organic sales growth in the range of 3-4%. It forecasts that its annual underlying trading operating profit margin will rise from 16.1% in 2025 and expects real internal growth (RIG) — or sales volume growth — to come in above last year’s 0.8%.
The company’s shares were up 2.8% by 1.12pm (GMT).
Net debt fell to 51.4bn francs at end-December from 60-billion six months earlier, thanks in part to strong cash flow generation. The board will propose a 5 centime increase in the dividend to 3.10 francs per share.
“Strong free cash flow and slashed net debt establish a solid foundation for a reset,” said Vontobel analysts.
Organic sales, which exclude the impact of currency movements and acquisitions, rose 4% in the final three months of the year, above expectations for 3.4% growth.
That was led by price increases of 2.8%, roughly in line with analyst expectations, and RIG of 1.3%, outperforming expectations for a 0.9% increase.