Nestlé has abruptly dismissed CEO Laurent Freixe, less than a year into his tenure, after an internal probe concluded he failed to disclose a romantic relationship with a subordinate—a clear breach of the company’s code of conduct. This move, while rooted in compliance, triggered sharp investor concern about governance, culture, and strategic continuity.
The practical fallout was immediate: Nestlé shares tumbled by almost 4% in the opening of swiss stock market this morning, as investors grappled with uncertainty about leadership stability and business direction. Later in the afternoon, after a recovery, it was trading around 74,77 CHF, 1% down from the opening.
This is the second CEO ousting in just over a year, following the departure of Mark Schneider in late 2024 amid sluggish sales and strategic underperformance. The recurring leadership disruptions have rattled shareholders already fatigued by three straight years of declining share prices, eroding confidence in Nestlé’s normally steady governance.
The sucessor will be Philipp Navratil, an experient Nestlé executive and current head of Nespresso. Analysts cautious of “emergency promotions” flag concerns about a lack of rigorous CEO search. Yet, they view Navratil’s internal rise as potentially conducive to smoother strategy continuity. His mandate: preserve current restructuring plans while steadying investor reactions.
Strategy and figures
Freixe’s administration saw a series of business moves with mixed results: a cost-cutting drive of about US$ 2.8 billion, the spin-off of Nestlé’s European water business, and a strategic review of its vitamins, minerals, and supplements brands, including possible sales of under-performing assets like Nature’s Bounty. These steps improved focus on core segments such as coffee, pet care, and premium nutrition.
Operational performance under Freixe was a mixed bag. In the first half of 2025, organic sales grew 2.9%, but overall sales slipped 1.8% due to currency effects. Underlying margins eased slightly to 16.5%, with net profits down 10%. Still, the company stuck to its 2025 guidance, pointing to efficiency gains and growth driven by innovation mainly.
Nestlé stands at a strategic inflection: balancing internal transformation with macroeconomic pressures. Investors are closely watching Navratil’s early moves: will he continue pruning underperforming portfolios, or pivot toward bold growth initiatives? In either case, maintaining credibility while steering execution will determine whether the stock slide becomes an opportunity or the beginning of deeper troubles.
