Nestlé chooses the initiate to replace the CEO shot the case

Philipp Navratil takes office as chief executive on the Swiss company, after the release of Mark Schneider for underperformance last year and Laurent Freixe on Monday for having omitted to disclose a link with a direct subordinate.

Read more: Nestlé ousts CEO on the office of the office and Tape Nespresso Boss

It is an unprecedented turmoil for a company that has been renowned for its internal planning of the next generation and its corporate culture Staid.

Freixe’s eviction “left us shocked,” said RBC analysts, including James Edwardes Jones. “We considered him a nestle that would restore the reputation of the slightly boring predictability company. To what extent we were false. “

The rapid reshuffle raises the question of why Nestlé immediately appointed a permanent internal CEO, “instead of taking the time to carry out a complete assessment of internal and external candidates,” said Jefferies analysts.

Nestlé’s shares dropped 3.6% early Tuesday before putting part of the drop.

Now, the eyes of investors are in Navratil, a veteran of the company over 20 years old who, at the age of 49. He joined Nestlé in 2001 and spent a large part of his career in Central America, including Mexico, emphasizing the coffee sector.

He then directed the group’s world coffee unit, supervising the Nescaré brand and the license agreement with Starbucks Corp., which analysts consider one of the most promising companies in Nestlé. He became CEO of Nespresso, the manufacturer of coffee machines and single -use capsules in July 2024.

The appointment of Navratil, as well as the change of president of Nestlé next year, is “the real generational step which should probably have occurred 12 months earlier,” said Andreas Von Arx, analyst Baader.

Despite this, the Swiss National and Austrian faces skepticism as to whether it can restart a business whose actions have dropped by more than 40% from their summit in early 2022. The slide, which began under Schneider, had been the work of Freixe to reverse.

But the ex-CEO’s efforts suddenly ended after an investigation revealed that Freixe had violated the Nestlé code of conduct, according to a statement on Monday evening. He will not receive an exit package, said a spokesperson.

The case was first brought to the attention of business officials through an internal system called “speaking”, according to a person familiar with the situation that asked not to appoint. Once the allegations could not be supported via an initial investigation, other concerns were raised via the internal system and an investigation with an external lawyer was launched, said the person.

Commenting on his new role, Navratil said that he “would fully adopt the strategic orientation of the company” – a clear signal that he would continue the Freixe strategy to stimulate advertising spending, to bet on less important and larger products and to get rid of underperformative units.

Read more: Nestlé weighs the sale of vitamin brands after the decline of volumes

He inherits continuous restructuring, including the potential sale of vitamin brands in difficulty, and the search for a potential partner for the Bottle of Nestlé water sector, which Freixe separated into an autonomous unit.

“We are disappointed that the CEO is supervised for the moment to follow the strategy of its predecessor at a time when the market doubts the result,” said JPMorgan analyst Celine Pannuti, in a note.

Some of Nestlé’s challenges exceed its direct control. While Freixe has often noted that 90% of its American products are produced at the national level and are therefore outside the scope of President Donald Trump’s prices, a key exception is the Nespresso Swiss coffee capsules. They are now faced with a 39%levy.

It is a company that Navratil knows well, at least.