Is Nestlé Facing More Turbulence with Another CEO Ousted?

Nestlé has undergone significant upheaval with the recent dismissal of CEO Laurent Freixe due to a breach of the company's Code of Business Conduct involving an affair with a subordinate. His removal marks the second change in leadership within a year, raising concerns about the company's direction and performance in a challenging market. Philipp Navratil, previously seen as a rising star, has been appointed as the new CEO amidst ongoing struggles to recover from a decline in share prices.

Last updated: 02 September 2025 (BST)

Key Takeaways

• Laurent Freixe was ousted as Nestlé CEO after an investigation into a romantic relationship with a subordinate.
• This marks the second CEO change in just over a year, following Mark Schneider's departure.
• Philipp Navratil has been appointed as the new CEO amidst concerns over Nestlé's declining share prices.
• Analysts express doubts about the company's mid-term direction and Navratil’s ability to enact change.
• Nestlé’s shares have dropped nearly 33% over the last five years, underperforming compared to its European peers.

The Context Behind the Changes

Nestlé, a cornerstone of the Swiss economy and a major player in the global food industry, has been facing a challenging landscape since the pandemic. The sudden replacement of Freixe has highlighted the internal turmoil within the company's leadership. Since Freixe took over in 2024, the company has struggled to maintain investor confidence, with share values dropping 17% during his tenure.

The leadership changes at Nestlé aren't just about individual performance; they reflect broader issues within the company's strategy and market position. Freixe’s exit follows a period of significant scrutiny and criticism regarding Nestlé's operational performance, especially in its vitamins and supplements division, which saw disappointing sales earlier this year.

What Led to Freixe's Ouster?

The investigation into Freixe's personal conduct revealed a romantic relationship with a subordinate, which breached the company’s established Code of Business Conduct. This breach contributed to the decision to remove him from his position. Nestlé's commitment to maintaining high ethical standards in its corporate governance has been a key focus, especially in the wake of recent public scrutiny of corporate behaviour across various sectors.

Freixe's appointment was initially seen as a potential turning point for Nestlé, but it failed to deliver the expected results. The company’s ongoing struggles with share price performance and market confidence have made the situation all the more precarious.

Philipp Navratil: The New CEO

Philipp Navratil, previously a prominent executive within Nestlé, is now tasked with steering the company through this turbulent period. His appointment has sparked a mix of optimism and skepticism among analysts and investors. While Navratil is regarded as a capable leader, questions remain about how effectively he can navigate the existing challenges and execute a new strategy without being constrained by Freixe's previous plans.

JP Morgan analysts have expressed concerns that Navratil may find himself limited by the existing turnaround strategy established by Freixe, which has yet to gain traction in the market. Analysts suggest that clarity on Navratil's plans will be crucial for gaining investor confidence.

The Impact on Nestlé’s Share Prices

Nestlé's shares have experienced a significant decline, losing approximately 33% of their value over the past five years. This underperformance is particularly concerning given that many of Nestlé's European peers have fared better in the same period. The abrupt leadership changes have added to investor uncertainty, potentially leading to further pressure on share prices in the short term.

Analysts are closely monitoring how the latest developments will influence investor sentiment. Jon Cox from Kepler Cheuvreux noted that the rapid succession of CEOs is not typical of Nestlé's management style, and he expects the stock to face challenges until a clear direction is established.

Challenges Ahead for Nestlé

As Nestlé continues to grapple with its internal issues, several challenges loom large on the horizon. The ongoing review of its vitamins and supplements business could lead to divestments, fundamentally altering the company's portfolio. Analysts are keen to see how Navratil approaches these challenges and what decisions he will make regarding product lines that have underperformed.

Furthermore, the broader economic environment poses challenges that extend beyond Nestlé's internal dynamics. Inflationary pressures, changes in consumer behaviour post-pandemic, and heightened competition in the food and beverage sector are all factors that the new CEO will need to address promptly.

What Comes Next?

The immediate future for Nestlé hinges on how well Navratil can communicate his vision and strategies for the company. Investors will be looking for signs of stability and direction, particularly after two leadership changes in such a short span of time. The company’s next steps will be critical as it seeks to reassure stakeholders and regain their trust.

In addition, Nestlé's corporate governance will be under scrutiny, particularly regarding how it handles issues of conduct and leadership integrity moving forward. Maintaining ethical standards will be crucial for rebuilding its reputation in the eyes of consumers and investors alike.

Conclusion

The recent leadership changes at Nestlé signal a pivotal moment for the company as it seeks to regain its footing in a challenging market. With Philipp Navratil at the helm, the focus will be on how effectively he can implement change and provide a clear path forward for one of the world's largest food and beverage companies. The next few months will be crucial in determining whether Nestlé can turn the tide and restore investor confidence.

In times of change, companies face both challenges and opportunities. How Nestlé navigates this turbulent period could redefine its future trajectory. Will the new leadership bring the fresh perspective needed to revitalise the brand, or will it further complicate an already complex situation? #Nestlé #LeadershipChange #CorporateGovernance

FAQs

Why was Laurent Freixe dismissed as CEO of Nestlé?

Laurent Freixe was dismissed due to a breach of Nestlé's Code of Business Conduct, specifically involving a romantic relationship with a subordinate, which prompted an internal investigation.

Who has replaced Laurent Freixe as CEO of Nestlé?

Philipp Navratil, previously a rising star within the company, has been appointed as the new CEO following Freixe's dismissal.

How have Nestlé's share prices performed recently?

Nestlé's share prices have declined by almost 33% over the past five years, underperforming compared to its European peers, raising concerns among investors.

What challenges does Philipp Navratil face as the new CEO?

Navratil faces several challenges, including restoring investor confidence, addressing underperforming business units, and navigating the broader economic environment while executing a clear strategy.

What is the significance of corporate governance in this situation?

Corporate governance is crucial as it affects a company's reputation and trustworthiness. Nestlé must maintain high ethical standards to reassure investors and consumers following recent leadership upheavals.