Can Nestlé restore growth and investor trust? Summary
- Nestlé to cut 16,000 jobs under new CEO Philipp Navratil
- Navratil made changes just 45 days after appointment
- Company aims to save €3.2bn by end of 2027 through restructuring
- Sales growth has stalled and market cap dropped from €326.8bn to €223.0bn in four years
- Investors cautiously optimistic as Nestlé prioritises innovation and execution
The food and beverage world was left shaken last week, after it was announced that industry giant Nestlé is to slash 16,000 jobs, in efforts to ”cut costs".
The news was delivered by newly-appointed CEO, Philipp Navratil, just six weeks (45 days) after he took the helm of the Swiss multinational. An ascension which proved to be another seismic shock for the industry, not to mention Nestlé employees themselves, as it followed the sacking of Navratil’s predecessor, Laurent Freixe.
“We didn’t expect to find ourselves here,” said Anna Manz, CFO of Nestlé during a revealing discussion with Barclays’ Warren Ackerman.
Meanwhile, for outsiders, the sensational twists and turns of the manufacturer known for big-name brands such as KitKat, Nespresso and Häagen-Dazs, have made for compelling viewing.
Even more so for Nestlé’s competitors, who are likely rubbing their hands together in glee, as the chaos unfolds.
At the same time, the market-leading manufacturer has been fighting to boost stalled sales growth and slumping share prices.
In short, it’s not the best of times for the world’s biggest CPG.
So, can Nestlé’s new CEO turn things around?
Can Navratil reverse Nestlé’s fortunes?
According to Global Ranking, Nestlé has a market cap of £194.4bn (€223.0bn). What’s more, it was rated number one in the World’s Most Valuable Food Brands 2025.
So it’s safe to say that, despite its recent struggles, the business remains successful.
Having said that, the company’s value have been in decline since its December 2021 high of £285.1bn (€326.8bn).
It’s interesting then that the decision was taken to recruit a new CEO from within, rather than seeking fresh ideas and strategies from outside. What was the thinking behind this?
“Philipp Navratil is a classic ‘operator-strategist’ who’s grown up inside Nestlé’s system for two decades,” says Nandini Roy Choudhury, principal consultant for food and beverage at Future Market Insights. “He cut his teeth in internal audit and then ran country and category P&Ls in Central America and Mexico, which gave him muscle memory for local execution, productivity levers, and pricing discipline.”
He went on to be named SVP & Head of the Coffee SBU, stewarding two of the group’s crown jewels - Nescafé and the Starbucks alliance - where premiumisation, format strategy, and brand partnerships are central.
In July 2024 he became CEO of Nespresso, a capital-intensive “system business”, where innovation cadence, supply resilience, and retail economics have to work together.
“That blend - country P&L, global category strategy, and a systems brand - translates directly to Nestlé’s needs,” says Choudhury. “Faster innovation with fewer SKUs, margin repair via mix and productivity, and tighter end-to-end execution.”
In other words, Nestlé was looking for an innovator, but also a safe pair of hands to steer the ship, and Navratil fit the bill.
In fact, he displayed both of these attributes in his first earnings report as CEO.
The first, of course, being the cutting of 7% of the company’s workforce, and the second being a very vocal commitment to innovation.
“As Nestlé moves forward, we will be rigorous in our approach to resource allocation, prioritising the opportunities and businesses with the highest potential returns,” said Navratil during the company’s Q3 earnings statement on 16 October.
Moreover, Navratil and his team have set a savings target of CHF 3.0bn (€3.2bn) by the end of 2027.
He went on to say Nestlé will be, “bolder in investing at scale and driving innovation to deliver accelerated growth and value creation”.
There was also a clear to message to investors and competitors.
“We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded.”
Nestlé investor opinion
It appears investors and analysts are ready to give Navratil a chance to win them over. As Future Market Insights’ Choudhury says, the prevailing attitude is “show me”.
Though she goes on to say that markets “generally welcome a steady insider after turmoil”, which could be good news for the multinational.
Moreover, financial services firms such as Morningstar, have so far kept their valuation for Nestlé unchanged.
They also see potential for growth if the company delivers on its plans.
“Analysts like the directional clarity - fewer SKUs, faster gatekeeping, more ‘earning your right to price’ through claims, formats, and systems,” explains Choudhury. “They’re looking for hard proof in the next results/Capital Markets touchpoint: range rationalisation counts, cycle-time KPIs (brief-to-shelf), and cost takeout that shows up in unit economics by category/zone.”
Nestlé analysts are laser-focused on:
- Organic Sales Growth (OSG) decomposed into RIG (volume) vs Pricing. With pandemic-era pricing fading, Wall Street needs to see RIG turn positive and stay there. H1-2025 was OSG +2.9%, RIG +0.2%, Pricing +2.7%. Q2 RIG dipped –0.4%, so the inflection narrative is unfinished
- Trading/Underlying Operating Margin (UTOP/TOP). After cost inflation and adverse mix, the test is whether productivity and mix can defend margins as pricing normalises. (Nestlé flagged margin pressure and FX headwinds in H1)
- FX translation (strong CHF). A powerful franc means reported growth/margins understate local performance, so constant-currency print and free cash flow conversion get extra weight
- Capital allocation. Watch capex discipline, buyback pace, and any portfolio actions
Source: Future Market Insights
Nestlé’s future
As Nestlé enters a new chapter under Philipp Navratil’s leadership, the stakes couldn’t be higher.
With bold restructuring, a renewed focus on innovation, and a clear mandate to deliver results, the company is attempting to shake off recent turmoil and reclaim its position at the top of the global food and beverage industry.
Whether Navratil’s insider expertise and strategic vision will be enough to reverse Nestlé’s fortunes remains to be seen, but one thing is certain, the world is watching.
